the nasdaq at a new record. joe: "what'd you miss?" earnings, buty will park cost hurt? joe: the senate will vote tonight on whether to try delma rosneft. kong property stocks are hot. we have the charts you can't meis.. s. the dow and s&p finishing marginally higher. dropis after an unexpected in productivity that had

economist wondering how much of this is cyclical versus structural or. the extraordinary colma of this market continues. -- calm of this market continues. a lot of people see the very excess of measure of fear. it is the fear index. level it has to a not been this low since 2014. i rolled my eyes. a lot of people don't understand what it is telling us. it is a short term fear an index.

it's the cost of buying protection against s&p downside. i wanted to point out some stocks we are watching. take a look at the gap, gap tumbling, really concerned about traffic in july, same-store sales in july drop 4%. , down him a 7% after norwegian cruise lines cut its forecasts. 3%, mylan of also seeing a 3% gain. governmentk look at

bond markets, yields down, nothing to germanic, but continues a trend of stocks up the same day as treasuries up, so when treasuries are up, yields down, 1.54. the pound had been trading in a tight range, off a low one dollar $.30 for the first time in a month, but now 13.3004. a lot of data coming out. how bad the u.k. economy is struggling. expectations of reduced volatility in the euro-dollar pair. this volatility is the lowest in two years, coming before janet yellen will speak. it will stayay

this low intelligence the. speaks. she joe: highest level in two years, signs of easing inflation, that lines up with the oil price and iron ore price. price deflation is bounds in those commodities. they do seem to be crucial drive for this measure in china. scarlet: we do have breaking an, reporting earnings per share of $1.16 by two cents,us topline revenue 2.5 $6 billion, in line with analysts. here, reaffirms

full-year forecast, stock moving higher. up 2% at $51. let's get too deep dive, find charts using function at bottom of screen. we talk about how everyone is moving into emerging market bonds because of yields. emerging markets look attractive. if you look at the year today performance of emerging-market debt etf, doubled from the low in february. that would be the white line, shares outstanding. what i thought was interesting is if you look at five years, the price, the blue line now highs since may 2013. outstanding highest ever , higher than was in 2012-2013, so demand has gone up even

though price has not. joe: people looking for any place. the one-year anniversary of last year's yuan devaluation. it has continued to weaken while the s&p 500 is at record highs. so is the stock market ignoring the delay way she? i would say not exactly. slide. is ignoring the it is connected. there are a few lines here. let me explain. ,he purple line, the yuan sliding for a while. the blue line, s&p 500, record highs. the white line is one month implied volatility and so even though the currency is sliding, volatility has quieted. trackedhas more or less

volatility, but not the yuan itself. there has been a weakening in an orderly manner, not much volatility, so if there is anything to watch, perhaps volatility not the nominal dollar-yuan. scarlet: which has been managed. oliver: i remember someone saying they do not care about getsuro as long as it there slowly. i have a chart that looks at i have been obsessed with the vix since i was down on scarlet's idea today. here is a chart, one of our bloomberg producers, shows the vix and white, now a two-year low. hedge fund investors continue to short the vix. the shorts and blue here, the vix and white. this shows investors are net

short 115,000 contracts on the vix. that is a three-year low, even as the vix itself is at a two-year low. this means investors are betting the s&p will continue to rise. scarlet: they are not convinced by this complacency. matt: they are convinced that complacency will continue. fall.hink the vix will analysiss get more with all of her rented. -- oliver. complacency all the way around. oliver: pretty much the chart of the day here. great story today looking at what is happening with investors , staying short volatility. to put this in perspective, this has not been the trade most recently.

some volatility was indeed a big trade, then we had a year in which the s&p never set new highs, to corrections, and then we are not back at those eyes but it was not a time where you wanted to get short in volatility, so the fact that this is happen right now about a ,onth and a half after brexit hedge funds in particular, these are looking at contracts, these are looking at institutional speculators, so there is a flip side, and this is appointed out. this is institutional investors betting that volatility will remain low. point,s an interesting there is a difference between what is happening on leverage funds, basically interpreted as hedge funds, but a whole other set of investors, and when you look at asset investors and investors they are

remaining long the vix. hedge funds are more tactical, short-term, whatever they think will happen in the summer is ine remaining long the vix a thing there will keep volatility low, your average investor sees concern on the horizon and that's why they're long on the vix. your average investor is hedging. they are trying to protect against downside. davos you have stuff coming in oliver: hedge funds see confident. scarlet: we have this conversation every summer. up again inrams september after labor day. what is different this time around with complacency so high and the vix so low? somer: this might stay to of it. you are talking about complacency and maybe it is for good reason because the market

has not done anything. highs, inched up to new but we have been doing it unlimited for him and smaller swings in the s&p, so remember itn we talk about vix, basically does move directly with the s&p inversely rather 80% of the time, so when you talk about the vix remaining low, the s&p continues to climb. anchor: joe: every day it seems are currently moving at all in the market, no trading range. oliver: not a whole lot of i'm being put into the market. scarlet: 22% below the 10 day average. joe: thanks as always for joining us. scarlet: coming up, walt disney earnings. we will break them down for you next. this is bloomberg. ♪

really clinton visiting a neighborhood dealing with the first u.s. outbreak of seek a. she called on congress to return to washington and pass emergency funding to do with the virus. mrs. clinton toured a health clinic, where 21 non-travel related zika cases have been diagnosed. the cdc says there are more than 1600 reported cases in the u.s. as of july 27. donald trump heads to meet evangelicalth 700 leaders to face questions about making the nation more christian. organizers to bloomberg politics that the meeting will be friendly, but expectations are high. hillary clinton was invited, but she is not scheduled to intend.

538.com projects hillary clinton has a 79.5% chance of winning it was held, 97% if today. strong showings in south carolina and georgia, traditional republican strongholds. migration to europe has dropped sharply this year, the international organization for migration says 263,000 refugees and migrants across the mediterranean to the continent. i am mark crumpton. breaking news on disney earnings. share, toppinga by one cent. revenue line, $14.3 billion topping consensus. that is a gain of 4%. consensus estimate was $14.16 billion. over $13.1just

billion. in terms of different segments, media networks is a big part of it. revenue, 5.91 billion dollars, mrs. consensus estimate, the biggest part of the company when it comes to revenue, parks and resorts, $4.3 billion, also missing consensus. 4.42onsensus was for billion dollars. studio entertainment, big movies , $2.85 billion, better than what was expected, $2.61 billion. plenty of big movies, finding dory. it was a big one for disney. studiould help drive entertainment. consumer enter, $1.15 billion, also missing consensus estimate of $1.12 billion.

disney has the option to buy -- and itwnership in will be buying a minority stake in that company. it will collaborate with espn. leagueve it is major baseball website. joe: digital streaming technology associated with mlb advanced media, the media arm of -- scarlet: i'm try to figure out. you can see shares of disney are 910's of 1% despite this acquisition, minority stake for $1 billion. the miss on several revenue lines when it comes to different segments might be one reason why. think,erall you would well, investors not to concern, down less than 1% perhaps on that slight eps beat. operating income at espn

is higher. it threetalking about times in the statement, mentioning an increase in operating income at espn due to higher affiliate revenue and also to hire advertising -- higher advertising revenue. i think they have four of the top five movies this year. it is such a hits driven business that you wonder if they can keep it up. let's get some perspective. matt: paul sweeney bloomberg intelligence, would you think of the results? >> topline numbers solid. managementings call, speaking to investors, they will want to talk about the media networks business, specifically espn. a year ago this time, this is

when disney shocked investors, talking about the decline in espn's of drivers, which brought the concern. the industry has stabilized a little bit. washed out, but investors very much want to hear about how subscriber numbers at espn and how that is impacting affiliate growth rate. scarlet: disney buying a minority stake for $1 billion, does that blunt some of the concerns? not: it shows disney is afraid to make investments into the digital side of the business. you want to protect your core business, core bundle of cable networks, which have been so profitable for so long, but at the same time, making investments in the digital side

of this is because that is where consumers are spending more time and where the advertising dollars are going, so if you are a traditional media company, you have to play both sides of the fence, which disney as an very well over the years and this is another example of that. disney shares are still down significantly from a year ago, not long before they shocked everyone by the scale of the slow down at the espn business. muted reaction to earnings after hours, have investors accepted these businesses are fine, but not what they used to be? that's right. they reset expectations for the cable network business. it will be a growing business, but not at the level it had been. media investor, viacom, disney, time warner, the question is inking about the unbundling of the big hdtv bundle and cord cunning, what is the slope of the line of the decline?

this time last year people were saying this could be a big stick decline in the pay-tv business, a lot of stocks have stabilized since then, some came back, good subscriber numbers coming out of cable numbers, including charter today, which gives the bulls in the market more ammunition to say, yes, we know the business is changing, but it will probably be more gradual than the bears were concerned about a year ago. about thee talked movie business, the only segment that beat estimates, 2.8 $5 billion in revenue, what does the five line look like for the year? you can't count on hits every quarter. matt: this is a hit business, ultimate hit business, movie business. if it does not make it in the first weekend, you lost all your money, but disney has essentially ensured itself against the volatility of that this is because they spent billions of dollars buying proven franchises, first exar, marble, and now lucasfilms, so

when you take a look at the five-year out forecast of all the movie releases coming out of walt disney, it is stocked full of franchise after franchise after franchise, and anybody has taken the volatility of the movie business, it is disney. don't forget to tune in for our interview of bob iger at 6:15 p.m. that is on bloomberg west. scarlet: looking forward to that one. chart of the best currency carry trade, next. a quick look at shares of yelp, moving higher, beating estimates. the top analyst estimates when it comes to revenue. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" you can find the best and worst performing currencies on the bloomberg. i want to look at the best-performing currency carry trade. let's use the u.s. dollar, shorting valor come along brazilian currency, 35% return, you can change base currencies, 15% return by going long. currency, yielding 33% return, people capitalizing on differential in low rate for u.s., japan, europe, versus brazil. if you were long the brazilian currency, you are doing well. scarlet: if you want leverage, you are probably doing it this way. the kerryake away is

tabyou can click -- carry that you can click on. scarlet: we will talk about with brazil challenges in a few minutes. we talked about chinese producer price deflation easing, but it is just one size of asian economic data starting to improve. i charted chinese producer prices. scarlet: that is not random. random.is not it is one of the data points out of asia-pacific this week. goingr looking charts, up, taiwanese exports, positive year-over-year for the first time in 17 months, all kinds of green shoots in an area where we have seen a decline. that is a good sign. this is the second of the most common charts you always see. joe: you see charts the go up.

you see charts the go down, and now this charts are showing up again. matt: japanese investors and what kind of yield they get when you remove hedging costs. up bloombergiant news put this into a chart. i thought it was fascinating. what kind of yields do you get when you remove hedging costs? is verynese that negative. has now 10 year yield gone negative when you subtract cost of hedging. in light blue, france, but italy willing to go with a risk, can get a full point and change minus hedging costs. joe: investors will put all yields to zero everywhere. matt: that is juicy yield when it is 1%. scarlet: coming up, lawmakers take a break from real olympics are over a vote of whether to

send the president this is bloomberg. ♪ to trial.

hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. [ hip♪ olympics 2016, let ] me get you on my level. ♪ ♪ so you never miss a moment, ♪ ♪ miss a minute, miss a medal. ♪ why settle when you can have it all? ♪ ♪ soccer to wrestling. track and field to basketball. ♪ ♪ fencing to cycling. diving to balance beam. ♪ ♪ all you have to say is, ♪ "show me," and boom it's on the screen. ♪ ♪ from the bottom of the mat, ♪

♪ to the couch where you at? ♪ ♪ "show me the latest medal count?" ♪ ♪ xfinity's where it's at. ♪ welcome to it all. comcast nbcuniversal is proud to bring you coverage of the rio olympic games. mark: first word news, latest multi-stay poll of likely voters is out, hillary clinton leading 42% intrump 52% to pennsylvania, and ohio 49%, 45%, a slight edge in florida. 30 poll was conducted july two august 7, are of likely voters and cannot be compared with earlier surveys of registered voters. mr. trump is being outspent by both of third-party candidates. steinparty candidate joe has been more than trump on tv ads.

$15,000nson spent exceeds trump spending. hillary clinton spending more than all three combined. search crews have recovered the black box of the sunken found 15,000 feet below the surface of the atlantic ocean. the freighter went down during a hurricane in october 2015. mission had been on hold because rescue efforts needed for that effort were not available. all 33 crew members died after the vessel lost propulsion and sank. a federal judge has upheld a 14 year prison term on corruption charges. inwas originally sentenced 2011 for trying to exchange an appointment to president obama's old u.s. senate seat for campaign cash. an appeals court struck down five of his 18 convictions and ordered him to be resentenced.

the united nations is calling for a cease-fire in syria. it needs to provide aid. the 90 wants a full-fledged 48 hourre or a weekly humanitarian pause and minimum. the group wants to provide food and medicine to millions who lack of electricity or water. countless civilians are dead or injured. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. get a recap.s s&p and nasdaq reach new records, and that is reflected in the last rotisserie patient, trading in the dow, 22% below the 10 day average. let's move onto to after-hours news at walt disney moving down after its profit and revenue

beat estimates, a big win for the company. versus $1.61. studiorom the entertainment business, the other businesses, media networks, parks and resorts, consumer and interactive, did not fulfill the analyst estimates. the the next big vote on brazilian president's future is being decided right now on whether to put her on trial. the vote tally will help determine if there is any unease president's coalition. let's bring in a brazil expert from washington, a visiting fellow at the peterson as the two for international economics and former imf economist, thank you for joining us. would you looking for next in the ongoing political saga of brazil? >> this mode today will tell us

a margin theide president has in the impeachment proceedings or how little a this is bended president has, so there is a wide expectation that this vote will actually come out at more than two thirds in favor of sending and that will be already i think a very strong signal as to what might happen during the actual trial due to take place in late august, early september. well heredeep is the when you are trying to get to the bottom of all this political, corruption accusations, it's not going to go away as we see from the proms the current resident is running into. is everybody tainted? andhat is a good question,

the question no one has an answer to yet. the well can be very deep, we don't know where the bottom is. currently, there are plea-bargain arrangements and things of that sort still going on. a major construction cover her -- company is in the middle of covering their position after a plea-bargain agreement. out information has leaked out of this plea-bargain deposition that implicates other politicians, so actually what were looking at still is a situation of extremely high political uncertainty even after the impeachment process is resolved. have beennvestors looking ahead, looking far ahead since january into february of this year, and the economic data is bottoming out, but has not shown it is moving north. see to investors need to push brazilian assets higher,

bonds, currency, stocks? on the political front, forget that. there will not be any clearer signals on the political front. i think where the action will be is what exactly the government is going to be able to pass in terms of reforms once the impeachment process is over, so there is a very big expectation that soon after the impeachment process is over that some of the reforms that have been played out by the current team, the current economic team, will start to be voted and put to a vote in congress, and then we will test the mettle of the president and see whether these diluted or proceed as expected. if they proceed as expected, then that is more than justifying recent market opportunism. if they get diluted however, we have to see the extent to which they get diluted to see whether that optimism is justified or not. want to go inside my

bloomberg terminal and look at the brazil misery index, a classic way of judging the economy, adding the unemployment rate with the inflation rate, surging in 2015 to over 18. it has improved a little bit, but everything is still pretty , high, high inflation unemployment. without progress on the political side, can there be more economic improvement and these numbers improve or do we really need to see more clarity? >> we do need to see more clarity on politics, but on the misery index itself, inflation is falling because the recession, this long running recession, the worst ever that brazil has ever had, has continued, as you guys were saying before. we have not seen any signs that the recession is not coming out, not yet at least, so, you know, that is actually having very

significant effects on inflation. it is helping to bring inflation down. since inflation is one of the parts of the misery index as it comes down, it improves a little bit the sense of well-being in the population. unemployment however is a big question, because unemployment as we know normally reacts with a lag to whatever the economy is doing. right now, the economy itself is falling, it is not in freefall, but it is falling, so the expectation is that employment will likely continue to rise and there is no clear end inside here yet. you can't really say when unemployment is going to reach a high and stable and become still and you know that very much dependent on the type of growth that brazil is going to be able to generate, which itself is dependent on the political situation. scarlet: if the impeachment is expected,as widely

how would the interim president as the confirm president differ than as the interim president? see very muchwill the same approach that we have seen so far. he has then putting himself in a position where you know he is dealing with the current situation as if he were already the president, so i don't think we will see much of a change in terms of how he sees things come the kinds of proposals he is putting ford, the way he is dealing with congress. i think all of these things already what we will see after impeachment, i don't see any change. scarlet: does his reform agenda lose emergency because he is now confirmed president? i don't think so. i think his reform agenda continues to have the same sense of urgency. i think the question that will arise are others. brazil is going to have municipal of elections this year, so in october we will have start ton in 2017, we

have the political cycle for 2018. there are questions regarding that mayf the cap net or may not run for office in 2018. these are actually the kinds of things that could hamper a little bit the reform agenda, not coming from the president himself, but from those who surround him, so this is where the big questions live. thank you very much. up, the federal reserve will hike rates next , his insightall and thoughts on productivity, next. this is bloomberg. ♪

now for the bloomberg

businessweek come of big business stories in the news. walt disney reported third-quarter profit beat estimates thanks largely to strong performances from films . profit at the film division helping to counter slower growth in tv and a drop in earnings from consumer products. disney is buying a minority mtech for $1 billion. beat estimates, sales surge, including allergy medicine. revenue rose 8%. competitors attempts to break into the market have fallen short. the judge in the massachusetts case involving sumner redstone has set a trial date. the judge said the trial over the ouster of the ceo will run for five days.

at issue, whether sumner redstone wrongly ousted him from a trust that controls by comp. that is your bloomberg business flash. scarlet: "what'd you miss?" productivity unexpectedly fell. while productivity has been week, tricky problem since productivity growth is a key factor behind rising living standards and wage growth, so how would this data factor into the fed's decision as hiring remains robust as well. we spoke to the global head of market economics. of the day, we can't pay ourselves more than we earn, so productivity is low, increase.ndards will investments are lower proportion of gdp than it used to be, firms are much more cautious about hiring people. .econdly, some changes

20 years ago, the guys who retired were replaced by younger people with higher standards of education. par for par.is there is not an upgrade in the educational standard. i think there is a lot of regulation that is making the world grow more slowly, and maybe it is making people less adaptable. like you ares viewing it through a positive lens. now the third quarter and a row, how many of these sort of numbers can we get before people think this rebound in gdp expectations -- are bound to get a rebound in gdp and the third quarter, because so much of the softness in q2 was due to a rundown in inventory. that will not happen again. we will see a bounce back. fact is that the fed keeps

talking about that may be the equilibrium level of interest rates that we are heading to his lower than they felt before, and they keep revising down and down and down there terminal value for interest rates. i think that will happen again in september, because we used to say were going to 4%, but it does not look possible. mention corporations and companies being hesitant right now. to productivity, one impact his labor and wages. this chart is looking at wages versus productivity. perfect chart, quarter over quarter, month over month. the white line is hourly earnings changes, where the blue line is productivity. we are getting a departure here, so what you making of wages declining despite productivity going lower? >> this is putting pressure on

corporate profits. they are paying people more, why? for the u.s. labor market, it is tight here they are not able to raise prices? is prettyin the world low. the dollar is strong. so pricing power is constrained by global conditions, and wages are being pushed up by domestic conditions. the conflict between those two means that there is a squeeze on profits. at squeeze on profits may have and probably again in q3, but basically this sort of chart that you were showing is really what you get at the and of the cycle or late in the cycle, profit start to get squeeze because it is difficult to raise productivity one employment is so low. why is that? the guys hiring at the margin, the guys who have not been hired in the last eight years, they with fantastict

skill sets, so relatively low productivity workers. inrlet: we are still early the cycle when it comes to normalizing interest rate spend then bernanke -- ben bernanke said there has been a shift at the fed, their perspective, policy sounding agnostic and disinclined to offer guidance. fed watchers will see less benefit and parsing statements and speeches and more from paying close attention to the and coming data, so how does this disappointing productivity data shift the debate within the fmoc. q2 data will be seen as transitory. , their estimate, the tracking estimate of gdp and q3 as almost 4%, so it's going to be a lot better. the fed will say some of the productivity weakness in q2 will

bounce back. to be honest, i think they will a more attention to the payrolls than to anything else. there is a big question now, how strong are the payrolls, two great months one after the other, will we get a third? matt: i know you guys change your call for rate hikes. where do you stand now? >> the payroll support our view rate rises are coming to it i think the market is complacent and the election will stop the fed. i don't think that is a consideration. scarlet: you're sticking with september? >> september. up, hong kongg property surging 40% from the low in january, but too far too fast? we will discuss. this is bloomberg. ♪

scarlet: i am scarlet fu. "what'd you miss?" hong kong real estate shares climbing. that has investors ringing alarm bells. appraise the situation. scarlet: please appraise it for us. >> if i wanted to be a billionaire, i should've gotten the property. matt: get in now. ,he best time to plant a tree 20 years ago. the second best time? right now.

>> aside from advice from matt in hong kong, as you know, extremely expensive to buy any piece of property and hong kong, but if you had bought it , the asian financial crisis began, property prices plunged by 50%. then, we have reached those same levels 20 years on, and property prices have gone up 37% since january, amazing. amazing. thelet: this goes back to same idea we have seen in canada, london, california, a lot of mainland money pushing prices higher. that's right.

a lot of mainlanders moving to hong kong, not to mention buying property here because that is where they want to park their money. if you look at the property stocks themselves, new world, i know you know of a lot of these companies, they were half of the top 10 best performers in the hang seng index so far this year, so it has been all about property. you haven't asked me the most important question. matt: is the fed responsible? yes, thank you why are prices going up so high? not only is there a lot of demand with foreign investment, but also since the hong kong dollar is pegged to the u.s. dollar, they keep their interest policy the same as the u.s. low, that is fueling the mortgage boom in hong kong. it does not look like that will let up any time soon, except for recent data it right here in the u.s., which looks like maybe we may see a rate hike. talk about anye

country, well how does the market lineup with fundamentals? there in february people were talking about the property market not doing well, how is the underlying economy of hong kong doing? is it a question of as as a prices running apart from fundamentals? >> a little bit, kind of mix, hong kong gdp contracted, retail in june,line, down 9% so fundamentally that seems like there should not be this run up in property prices, which is why you have some people saying this is the peak. this is not a good time to buy if you want to be a billionaire. be thes as if this may peak and we may see property prices fresh again, not to the level of 1997. it could fall. scarlet: a correction. joe: great stuff. on can watch betty liu

"daybreak asia." scarlet: what you need to know to gear up for tomorrow's trading day, next. this is bloomberg. ♪

japan producer price index tonight, wholesale inflation, a con was looking for a drop of 4% year on year for july. joe: i will be looking at job a.m.,gs tomorrow at 10:00 5.5 million last month, expected to pick up. great report to dive into. i will be looking over his

shoulder at those. at 4:00 p.m., shake shack earnings, sales expected to rise 30%. that could change all the numbers.

♪ >> good evening. we were going to bring you tonight's program, new polls, battleground states, donald trump attempts to avoid personal attacks. the republican nominee scrambled our plans and created another firestorm. watch for yourself what donald trump said this afternoon at a rally. wants to essentially