"what'd you miss?" matt: i am matt miller. ♪ scarlet: oil rebounding to $40 a barrel, stocks going higher. media earnings take center stage. 20th century fox out in minutes. joe: credit showing signs of weakness. is that a signal of concern for other asset classes? matt: hillary clinton will be u.s.ext u.s. president if consumer confidence continues to rise, according to our guest. scarlet: we begin with market minutes. the dow ended its seven-day losing streak, s&p 500 also climbing. s&p rebounding from its biggest lost in four weeks. we are trying to weigh different things like the latest jobs data and corporate earnings. joe: pretty solid day.

nothing to germanic word dramatic. who contributes the most, who takes the most away. the top five index points contributors, four were financials, aig, j.p. morgan, citi paul giving big contributions. p functionk at the ima on bloomberg, energy stocks did the best. joe: on the government bond , there continues to be selling the last several days. you can look at the australian a sharp jumpd, ace sharp jum

up. that's keeping with the broader story from g7 developed countries. g7 bond yields at their highest level in five weeks. this is still incredibly low, the average yields across various government bonds. there has been an uptrend. japan is reaching the limit of how much a can buy, people concerned about the same phenomenon happening elsewhere. this is something to keep an eye on, the increase in yields. scarlet: is this a fundamental repricing? a look at currencies and the dollar, specifically the bloomberg dollar index, recovering from a five-week low. you can see the low reached in june. that is thanks to u.s. labor market strength signs. adp for instance. againstar strengthened

13 of 15 major currencies. commodities, the story has been oil getting clobbered, but today it had a nice rally, up nearly 4% to over $41 a barrel for wti crude. earnings from tesla motors. scarlet is looking through those right now. scarlet: it is a loss for the second quarter, $1.06 per share, wider than what analysts were share, and, $.60 a bigger than last year or the first quarter. in terms of second quarter 14,402, higher than ,hat tesla had preannounced 14,370. ofwant to know what kind outlook tesla has when it comes to deliveries in the second half. adjustedd quarter gross margin is 20.8%.

tesla has targeted a specific number, and people are wondering whether they can achieve that. oliver: the model three is a real point of contention. was: charlie anderson saying he is excited about the fact they got 300 50,000 preorders at $1000 each for a car nobody has seen a production version of. up question is can they ramp production quickly enough to hit that goal. a lot of people guess they won't be able to do it on time since they have never hit goals on time. do eventuallyhey hit them. i am scrolling through the statement right now. teslaoking to see what expects as far as production and demand. track tothey are on support deliveries of 50,000 vehicles during the second half. that is something a lot of people are wondering.

production efficiency is improving rapidly and they say they are increasing weekly production rates further. they plan to execute a steady production of 2200 vehicles a week, and plan to increase to 2400 vehicles in quarter four. scarlet: 21st century fox reporting first-quarter adjusted earnings of 45 cents, the consensus estimate was $.37, so looks to be a beat. the revenue was $6.65 billion, shy of what an list were looking for, $6.68 billion. returning cash to shareholders, reporting ais six cents boost to the dividend and looking to buy back. it is a $3 billion incremental buyback authorization. in terms of film entertainment

revenue, two point oh $4 billion billion dollars, and less were expecting $2.02 billion. can we get back to cars for a second? i found the "but" in the outlook, non-cap operating expenses should increase sequentially in q3 and q4, and increase by 30% from extra costs for the engineering design and testing related to the model three. say anything about changing the date, but do say 2.25expect to still invest billion dollars in capital expenditures and all of 2016 in support of the accelerated production plan for -- by the

way, we are showing roadster video. that is a car i got excited about when it first came out. the quantum leap from that car to the model s was incredible. joe: worth noting that the stock is bouncing around the not moving very much. the key point being is the earnings aspect of this, a big miss, is the least relevant. scarlet: 1.56 pain dollars for adjusted revenue in the second quarter, consensus was for $1.63 billion, a sequential decline from the first quarter. interesting stat, new retail locations opening up every four days for the rest of q3 and q4, which they say will be an acceleration. investors may be liking that growth. matt: a lot of consumers wonder where can i go and find a tesla and test drive one.

you can go to the westchester, the mall. you should make an appointment. joe, you should make an appointment as well. try it out. joe: we are here with all of her oliver renick. we had that big move down yesterday, now we're back to nothing. there's not a lot going on in the broader market. oil, thisking about correlation coming back a little bit. and we talk about stocks oil, it is a little bit of a minefield when we talk about correlations, so i thought this would be a good topic to get into today. what happened with stocks and oil. this is your two-year chart.

under a certain , stocks have5 moved with it. oil is up today, stocks are up today, but when you look over the longer-term, the to do have a pretty strong correlation, a positive correlation since 2009 because you can think about risk in general, macro moves that push the two together, so as we get to lower oil prices and everyone starts fretting about the correlation with stocks, it's important to think about what may be some of the larger factors driving those. scarlet: in terms of sectors, health care has been a leader thanks to biotech. the nasdaq has held up better than the s&p and dow. it's bio techs. oliver: this is an interesting story. we have had the strong rally in biotech. good chart.

joe weisenthal chart. oliver: when we look at the right side, a big draw down from , two hundred $25 million moved last friday. it's hard to figure out whether that was a largenvestor who got out or whether there is something going on in the under currents. analyst love biotech. it is the darling of the sell side. oliver: sometimes it is an easy sell. that is have a market flat and hard to find stocks outperforming, we know this has been a tough first half of the becomehe sectors attractive. with health care over, that does move secretary as well. -- does move cyclically as well.

use how do in best or's that data -- how do investors use that data? is it just one signal out of many that they used to time it? oliver: very important question. you see that big draw down. -- to thinktell you about flows and price action is a bit of a fallacy. aboutt some time talking this with adam parker of morgan stanley. how do we see these outflows in the u.s. stock market and yet prices go higher? it's not about the direction people are putting money in or out, it is about the willingness to transact on a buy or sell. ifhaps flows are negative, there is more demand one way or the other, you can still have prices moving up. you have to see where the eagerness is on higher versus

,eller, so even the magnitude it is about the conviction with which you do it. it is interesting to think about someone there wanting to get out. matt: someone thought it was too hot to handle. oliver renick, thank you very much. scarlet: how fragile has the credit market become? a quick check on shares of , square21st century fox boosting full-year revenue, fox reporting a $3 billion stock buyback, and tesla says it is on track for 50,000 deliveries in the second half and free cash flow was a negative, $144 million. this is bloomberg. ♪

the first word news. armed police being deployed in london to reassure people worried about terrorism. in april, david cameron extraced funding for 1000 armed police. the first of them began patrolling today. several donald trump supporters and political allies are planning an intervention with the republican presidential nominee of according to reports in multiple media outlets. rnc national chairman, rudy areiani, and newt gingrich among those planning to speak with donald trump about a reset to his campaign. trump's campaign chair says the candidate is in control and that nger areof growing a overblown.

women are donating to hillary clinton's campaign at unprecedented levels according to an analysis published today in usa today. 60% of identified contributions through the end of june to clinton's campaign and outside groups supporting her are from women. 31% of donations to donald trump came from women, the largest gap in recent history. there is a report that the obama administration secretly airlifted $400 million in cash to iran. the airlift coincided with iran's release of four americans last january. the white house had this response. >> this $400 million is actually money the iranians had paid into a u.s. account in 1979 as part of a transaction to procure military equipment. equipment as it

relates to this 400 million dollars was not provided to the 1979 because the shaw of iran was overthrown. also weighed in saying "we do not and will not pay ransom." global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. joe: "what'd you miss?" signs of weakness in the credit markets. whiler next says that the mantra is credit leads the way, that message is often ignored and headed in the wrong direction. thank you for joining us. caution bothessed on the corporate side and the sovereign bond side. that yields are sharply ticking up in japan.

we saw australia last night. what is going on? >> we have been doing this chase for yield for years now. two things are happening, japan is talking about doing real stimulus, issuing debt, so that would create new supply. time, we are starting to hit saturation with corporate bonds with issuance after issuance after issuance. they are not trading well. scarlet: microsoft this week sold $20 billion in bonds. and there is a great function on the bloomberg called nia go. new issue analytics. that is a government kurd. you can plot the comparables. joe: microsoft, if you look at

that chart, the carver is still lower than most competitors. problem doinge a a near $20 billion offering related to the linked in purchase. do you see that as a sign that we might etf the end of this time when these companies can just -- >> once the bonds become issued, they trade. like microsoft in the 10 year space, you would like to see a aces points of rally over the next couple of days, indicating that there is really enough demand. you're starting to see one or two basis points, ubs did a big , so you are not seeing this followed three, which is assigned that it is getting into just it. digested.

matt: countries can get money free year. do expect any countries to do real sales here to a for desperately needed infrastructure? >> japan seems to be the one that is most likely to go down that path, additional stimulus, forty-year debt. they could issue forty-year debt inexpensively. since ben bernanke in 2009, calling for fiscal stimulus. we certainly never got it on a global basis. i think that would be the first step. i think that would push back on yield curves globally. always leavest and signs of weakness in credit, what are the equity bulls saying? >> we have seen investment grade from 70 basis

points to 77 basis points, a small move, but in the wrong direction. you have the energy sector, anything in the energy sector is drifting wider as oil prices going down. given that were near the all-time highs, keep an eye on the spread and then decide. it the perception that central banks are tapped out or done with their own bond buying that is filtering through to the corporate side? >> the issuance was going down, you're not seeing big sovereign debt issuance, at the same time, qe is taking supply out. the ecb specifically targeted corporate bonds. and a lot of these cases,

everyone loads up a balance sheets in anticipation of this, then theretighter, is not as much money on the sidelines as people think. as the supply keeps coming, you start to get losses, which then triggers real concern and where you could get a bigger and quicker pullback. matt: we have had a recovery in energy. functionok at the dis on the bloomberg over five years, it has come down substantially from the beginning of the year. what does that mean? >> that's healthy. bb, theo the bbb, larger cap companies, because that is what is driving the market on a day-to-day basis. any company still left in that bbb if it gets downgraded, that causes selling pressure. is interesting from a private equity side, a distress side, to

talk about week companies. matt: thank you for joining us. up, japan'sing worst bond rout since 2013 is feeding anxiety. the charts you can't miss, next. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" japan's worst bond rout since 2013. up,es down it means yields so this reflects the four day selloff through yesterday, yields rising the fastest in the section of the bond market where they are negative. tot chart shows a flashback

2003 when jgb yields tripled in three months. triggered by models banks were using. that is where we are today. joe: when you start with a negative yield, you can't really triple further negative. aboutwe have been talking jgb's and the selloff is illustrated well when you put it binds.o -- bunds. that they have, up and surpassed at some point the bunds.

i have just which dover to price, excuse me. they came up and surpassed the yield. joe: this chart, you will see a lot of the reason that people are anxious and think the boj is nearing the possible limits of what it can buy. that is the white line, boj government debt holdings as of the last reading. that is why they are talking bonds,ssuing forty-year literally reaching the end of the market. is 60 day price volatility going back to 2009, volatility is at its highest level in several years. scarlet: the boj owns almost a third of outstanding debt. is the widow maker trade going to end? coming up, the question between

consumer confidence and the presidential election. we will discuss. this is bloomberg. ♪

mark: let's get to first word news. election day is more than 90 days away, but hillary clinton is already making plans for the white house. forcampaign filed paperwork the clinton-kaine transition fund, taking one of the first formal steps to plan for a presidency. it follows weekend meetings. the trump campaign says it raised $80 million in july a long the republican national committee. raised 60 $4 million from digital and direct mail contributions, and $16 million from fundraising events.

mr. trump donated $2 million of his and money to his campaign. hillary clinton raised to million dollars last month. memberama, a kkk convicted of a church bombing more than 50 years ago will remain behind bars. his request for parole was denied. the decision was met with applause at a hearing. last surviving kkk member convicted of murder in that bombing. the olympic torch has arrived in rio. it was a rocky journey as hundreds of protesters opposed to the games tried to interrupt the trip. scuffle's between police and demonstrators erupted when a protester tried to block the avenue where the olympic torch was going to pass. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. scarlet: thank you so much.

let's get a recap of today's action, the dow ending a seven-day losing streak, s&p 500 recovery,ude oil's biggest gain in three weeks, lifting energy stocks and major indexes, but we should note this narrow move in the s&p 500 extends a narrow trading range we have seen for most of july. joe: energy was the biggest , 1.7%.within the s&p financials gaining nearly 1%. scarlet: earnings bonanza after square, 21st century fox, and tesla all reporting in the last 30 minutes or so. buyback, $3 its billion buyback, and tesla says it is on track for 50,000 deliveries in the second half. a major shift in u.s.

economic confidence has taken place. that could be the main data point that determines who wins this year's election. atwater studies how changes in confidence impact our decisions. thank you for joining us. consumers seem more confident on the whole, but what we are seeing is a shift in almost two americas, this inequality rears its head and it almost seems as if the more confident, more elite people are with the democrats, and the bombed out and maybe less privileged people are with the republicans. >> that is what the latest figures from gallup confirm, two thirds of immigrants are optimistic about the economy, and 70% of republicans are not. it is a two-tier situation in confidence. it used to be among the

financial elite and main street, now it appears to be bifurcating dramatically between political parties. matt: is that because the republicans are an angry or group of people in the survey? or have they missed out on the recovery we have seen since 2009? >> if you look at the makeup of asse who are reporting republican, they are suffering from chronic under confidence. the recovery for white, middle-aged males has been debilitating. cure of definitely a america for whom this has been a recovery in name only. you subjected yourself to eight nights of the convention. you saw a very dark, negative

, dark was the new black at the republican convention, and at the end of the democratic convention, hillary clinton in the white pantsuit. andcontrast in messages mood between the two conventions could not have been clearer. the mood andn sentiment of their basis, the democrats feeling better about the economy, while republicans are still fairly depressed. does that mean they double down as the negativity election campaign goes on? >> the democrats were not euphoric. scarlet: it felt like it. >> absolutely. what you are starting to see is the enthusiasm is extending into the republican establishment. one of the things that is so interesting right now is that in the last two weeks, we have seen a rocket ship boost in consumer confidence. figure tracks that

incredibly well, and so you have that is nowst completely disrupting the donald trump campaign. i think it is safe to say that if confidence continues to rise in the next couple of days, his likelihood as the republican candidate on the ballot is gone. joe: you talk about the the verge and's between how the two different parties feel right now, but that is not the only divergence happening. a divergence in how consumers see the economy right now versus how they see the future. betweenre is a gap current and future expectations, those have always been harbingers of a possible recession, not always, but sometimes. what explains that gap? the two were disconnected. >> as mood falls, which it has all this year through to the

dallas shootings, you had this negativity about the future despite lower gas prices, despite low jobless claims. the consumer was just feeling increasingly depressed. that has bottomed and now shifted, and so you typically those two lines become too extreme at the top and bottom, too optimistic about the future in peaks of confidence, and to negative at the lows. up byt: it is also back other things in the market. for instance, u.s. bond yields, so it is backed up by other things. it's not on its own floating out there. >> at the same time confidence , the telecoms,

utilities, bonds, everything that was perceived as a safety trade was also reaching peak price. ,t has been interesting consumer confidence seems to be leading the market here. the past two weeks, we have seen this big shift in confidence yet to be expressed by the markets. matt: i wonder how much the bifurcation of america really explains all this. noticed especially those who are currently running the country talk about the jobless claims being so low and gdp growth coming back, but it is like looking at the entire country as one real estate market. isn't it better to look at it in regional pockets? at ityou do look regionally, the kos are doing better than the heartland. it becomes tempting for the abundance to create these black and white, binary views, and they are not.

the data agrees with you that you have to look on a more segmented bases, republican, democrat, wealthy, non-wealthy. matt: if you do look at it regionally, are the democrats -- obviously they're doing better on the coast with new york and california, and in the middle of the country not faring well, but the swing states will be most important, so what happens if you break it down and look at ohio. >> or pennsylvania. this idea that the heartland in the u.s. is not coasts.s well as the it seems to have gotten a lot of attention because of donald trump's popularity in certain parts of the country. let's say donald trump were to win, people sing someone who represents them in the white anye flip without underlying economic trend. you see it if you look at

data by political party and presidency. if my candidate becomes president, i'm happier than the person whose candidate lost. joe: always fascinating stuff. up, now thatng tesla and 21st century fox have reported earnings, we look ahead to tomorrow. linkedin set to report its numbers, so he look at microsoft's plan for the company, next. this is bloomberg. ♪

slightlya motors higher after reporting second-quarter earnings despite the loss.

i want to bring in cory johnson for more insight. stocks is flat after hours because it is kind of a push. tesla said the number of cars could change a little bit. we saw what we have seen in the past, sales of the cars creating a big loss for the company. 14,000 delivery number is less than the previous quarter and the court of before that, so we see a slowdown in the demand. it is the fewest number of model as deliveries they have had in 18 months. -- for the quarter, i should say. the free cash flow number looked a lot better. $144 million.

the previous quarter was $67 million. they got free cash flow down by not paying all the bills. that is fine. the payables and jumped. they only give you an amended balance sheet. 1.7 billionped to dollars, the bills they have not paid, so that may explain why free cash flow is better. matt: i have a lot more questions. i will tune in for bloomberg west. i want to get over to scarlet for these numbers don't lie. scarlet: one of the biggest deals in the tech sector, microsoft purchasing linkedin. let's look at what microsoft is getting for that in our numbers don't lie. the highest earnings multiple of any takeover this year, more

than $5 billion, valuing linked ebida.e than 84 times eve it is paying about $60 per registered member. .e're talking a premium of 40% revenue at linkedin is set to grow at the slowest rate in the company's public history. that bar is set high for microsoft to justify this deal. while many people use the site, fewer than 25% of those sign into the service on any given month. this is based on the theory that people will start using the platforms if they are combined. microsoft sold bonds in the third-largest debt issuance of

the year. microsoft has enough cash to buy linkedin four times over, but by nds it iso capitalizing on the appetite for u.s. debt. more insight on user growth when it reports on thursday. joe: for more on linkedin and the microsoft deal, let's bring in sarah frier from san francisco. ,inked in earnings out tomorrow soon becoming part of microsoft, but what are we looking for? >> we are looking for justification of the deal. mentioned those numbers, salesforce is willing to pay more for linkedin than microsoft was. microsoft things they will be inle to integrate linked connection information to tell people who they will be meeting

with and who they know. it will be part of the court on a service. they think that is very valuable, but linkedin, they just haven't been growing as fast as expected. in february when they announced earnings, the stock dropped 40%. to see tomorrow if there are any differences in how people view their growth prospects, especially as part of microsoft. with the link to microsoft office or microsoft outlook a, you would naturally use the service more often. >> and linkedin would add more people to their connections, right? microsoft has access to about one billion business users, and once they have linkedin accounts , that will increase service by a lot. joe: you mentioned salesforce was willing to pay more for linkedin.

has there been any part of the shareholders who are angered by that? >> i think there hasn't been a lot of discussion about it, but i think they're deftly will be questions about it on the investor call with linkedin. stopped listening to the overtures from salesforce once they had settled on the microsoft deal. concerned about how it worked out for him because he wanted to buy them. one thing linkedin is know for is its china operations. it is the only social network with access to the china market. how granular does the company on itsering details growth and prospects in china? >> they always talk about their user base in china. it has been growing substantially. growing marketst

for linkedin, so certainly something important to them and they are operating it very separately from how they operate linkedin globally. set of team a partnerships that allow them to do it in a very china way, complying with the censorship they need to do over there. matt: thank you for joining us. scarlet, back to you. , china'scoming up market for ipos, the hottest it has ever been. we explain why, next. this is bloomberg. ♪

scarlet: i am scarlet fu.

"what'd you miss?" china's market for ipo's is the hottest it has ever been. betty liu joins us now to explain why. it has to do with government intervention. >> it does. not outright intervention. reading the tea leaves on what the regulators want. you are right on those numbers. the average ipo size is below 100 million dollars, so these are relatively small ipos. what the government is trying to do is stabilize the market, the chinese markets have not been the best as of late. ,y limiting the size of the ipo that limits the number of shares issued, which means there is less supply in the market and

less of an ability for markets to get out of whack with a whole flood of new shares to take it down, so that is where the regulators come in. the chinese market has been one of the worst performing markets, right? however, the ipos have been a standout. our ipo market is so dry here. i know you have a bloomberg chart. joe: i have that. matt: it is an amazing chart. of june -- e >> you have scarlet and i book ending you to correct your chinese. 600% shares are up compared to the shenzhen

composite. >> that's incredible. that just goes to show you how much of these ipos have gone up. things possibly may change because in the second half of are 800 companies that have filed for an ipo. several of them are $1 billion and more, some more ipos with bigger values. joe: what strikes me is how easy it looks. you don't have to get in on the first day, second day, or third day. it looks like you can get in any time because there is this big shortage. >> it is kind of ironic because the regulators are trying to stop the speculation and stop malfeasance they have seen in the market, and this looks like it straight up. remember these are also highly risky shares.

matt: they are not penny stocks, right? they are not all line. >> they are not all massive companies. a lot of them are very small to medium-size companies. the ones that have been considered bigger or more regulated, they have gone to hong kong to ipo. joe: thank you betty. matt: coming up, don't miss this. i jumped out of a plane yesterday. yes, and i recorded a special message for all of our "what'd you miss?" fans out there. stick around. this is bloomberg. ♪

scarlet: don't miss this. the boa rate decision tomorrow. right now, 100% odds of a rate cut tomorrow. got to like those obscured jobless claims tomorrow at 8:30 a.m. i always check them every thursday. i am looking at u.s. factory orders and durable goods tomorrow at 10:00 a.m., always good to get some real legit, solid numbers, not just feelings about how the u.s. economy is. don't miss this. yesterday i threw myself out of an airplane. 13,500 feet was where we started this were 12,000 feet at

point. a special shout out. "what'd you miss?" real risk aversion at 12,000

john: with all due respect to donald trump's campaign that everything in his campaign is hunky-dory, there is someone you might want to call. >> reince priebus is unhappy now. >> furious with trump. >> quote apoplectic. >> apoplectic. >> quote apoplectic. >> apoplectic. >>, well, a couple of things bother me. ♪ now, happy apocalypse sports fans. three