on the sideline of a summit of southeast asian foreign ministers. russia's foreign ministry says north korea was one of the topics discussed during the call. tensions have risen between pyongyang and the international community following the north's recent test firings of two intercontinental ballistic missiles. republican tom tillerson democrat chris coons will to protectegislation the special counsel position. the bill allows any special counsel for the department of justice to challenge their removal in court with a review by a judge panel within 14 days. it would apply retroactively to may 17, the day robert mueller was appointed. turkey's top diplomat is promising to root out militants plotting against china. the turkish prime minister spoke alongside his chinese counterpart and said his country

would treat threats to china's security as threats to itself. relations between the two countries have been strained in recent years my turkey -- by turkey's support to groups fighting syria's president sharla said. representative for barcelona's soccer star myanmar -- this clears his way for his signing germain.s st. it shatters the record paid for pogba's midfielder paul last year. 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. ♪ julia: live from bloomberg world

headquarters in new york, i am julia chatterley. scarlet: i am scarlet fu. joe weisenthal: i am joe weisenthal. we are 30 minutes away from the close of trading. julia: energy shares are weighing. joe: the question is what did you miss? scarlet: tomorrow's jobs report with a familiar -- the question is, why are businesses having trouble filling positions? gary cohn could be within arms reach of the federal reserve. why a former wall street banker might be exactly what this economy needs. gopro reports second-quarter earnings after the bell. cautious analysts are looking for very honest product pipeline. five months ago, renowned short seller carson block said the partisan divide mdc was so wide a debt default might be unavailable. so wide ain bc was

debt default would be unavoidable. with us now from san francisco to explain is carson block, cio -- cioeln cofounder of and cofounder of muddy waters. how does your concern compare with today? carson block: actually i am more concerned than i was in march. if you told me in march when i wrote that piece that we would be here at the beginning of august and we wouldn't have yet raised the debt ceiling, i would have at least expected there would be a lot of conversation in congress about this and in d.c., and am most the opposite is true. we hear treasury secretary steven mnuchin try to eat the case for raising the debt ceiling, but it is being drowned out -- trying to make the case for raising the debt ceiling, but it is being drowned out by all these other happenings in d.c. right now.

it is probably worse than i could have expected. is your main concern, carson, that compared to other stuff with health care, taxes, the russian investigation -- that nobody is putting a priority on this that it deserves? additionalt is an concern. the original concerned that i had is on the republican side of the house you have 29 members of the house freedom caucus, which if they hold true to historical form, they would not vote to raise the debt ceiling, which means you would need the democrats to help out the republicans in the house to pass it. now the problem i saw then is the democrats probably wouldn't be willing to help the republicans until it got really -- until it got down to the wire, and right now i come kind of wonder whether -- i, kind , one wonder whether it will get further than that. you see this dynamic between the

republicans inhe congress -- now there is more, maybe you could even call it a little more warfare between the two. i think it will be hard for the white house to corral the republicans in the white house and get the boats needed to pass the debt ceiling raise. scarlet: let me jump in here for a moment because we have market movement following a headline from the wall street journal that robert mueller, the special -- he is not a prosecutor, but the special investigator is set to impanel a grand jury in his russia probe, of course looking into possible ties between the trump campaign and russia. again, this is according to "the wall street journal," and we're looking at a market reaction with the s&p 500 took a leg lower. steep drop. special counsel -- that is what i'm at's to say about robert mueller's title. the dow -- that is what i meant

to say about robert mueller's title. the dow is also lower. 10-year yield also coming to shenzhen look -- session lows as well. joe: not huge moves. we are looking at an s&p down .3% -- not massive, but it does appear there was a tick down on this "wall street journal" headline. scarlet: continue to monitor. julia: we have seen this reaction before as far as the russian investigation is concerned. the headlines matter to investors, if only briefly. carson, go back to what you were talking about and the concerns with the freedom caucus. we did hear from mark meadows yesterday, the chairman of the party, saying the community a clean bill with no strings attached will have to be passed. seller, you are used to understanding the logic, the game theory here. do you think in the end pragmatism comes into play because no one on either side of the idol wants to be blamed for causing or creating a default --

of the aisle wants to be blamed for causing or creating a default environment? carson: it is unclear to me what post wouldm caucus' be. ion when obama was president, the freedom caucus did seem like it was willing to risk default on u.s. debt. you might think -- i don't have any insight here -- you might look at it and think some members of the freedom caucus are, maybe, almost nihilistic. it really depends on them. if you don't have enough members of the freedom caucus, along with the rest of the republicans, i don't know at what point the democrats are going to feel they should extend the hand, because if you look at it from the democrats perspective, yes, a default on u.s. debt, or failure to make payments to government employees, retirees -- which these payments are, i understand, about 7% of the economy -- that would be awful. but if you look at it from the

spective theyr might say -- look, the republican message -- we have been arguing against this message for years. we have been losing. to be the best argument we could make is let the republicans national let this failure land in their lap, and have people understand the consequences of that. now, that would be pretty severe, but politically, i don't think the democrats would have to live with this nearly as much as the republicans would, so that is something we really have to keep in mind. joe: carson, it strikes me that one key difference between this situation and say, 2011, or some of the other recent debt ceiling fights -- there was a clear game theory. there was obama who wanted a clean hike. there were republicans who controlled tigress and ultimately had to give the go-ahead, and they wanted some sort of concession -- controlled congress and ultimately had to

give the go-ahead because they wanted some sort of concession. you have publicans potentially fighting amongst themselves -- perhaps it leads to further confusion about how this is going to play out. there: yeah, i think really is a lot of potential for confusion here, and going back the beginningd in -- really, we don't have enough conversation taking place at this point in time. i think the potential for confusion after the august recess in the house is tremendous, so it is something that, i think, we all should be genuinely concerned about -- is that there really hasn't been enough preparation, i think, on either side of the aisle for how to handle this if we are going to come down to the wire again. julia: here, you have got a great deal of experience looking at, on the micro level at least, dysfunctional organizations. when you look at this u.s. administration, do you see it, at the far larger level, a more macro level, a dysfunctional

organization, and where do you see that coming from? is it about president donald trump, or more about the infrastructure more broadly? carson: well, one of the things that i think is becoming clear -- and right before my segment started, you guys reviewed a headline that i actually hadn't heard yet, but that you have in the senate they are preparing legislation to protect the special counsel. that obviously has republican sponsorship. you had a tweet, i think this morning, from congress trump blaming for sanctions imposed on russia, and deteriorating relationship with russia, and of course the senate shooting back that no, you have to blame vladimir putin. what you are seeing now is a dysfunctional relationship -- or the beginnings of a dysfunctional relationship between the republicans in congress and the president, and i think that is a real problem

as we head into the debt ceiling here. julia: do you think investors are mispricing the risk here just broadly? carson: yeah. yeah, look, when i -- i am not , butstorian on the vix when i look at it being at all-time lows, and i see all the political, geopolitical risks in the system, see that valuations seem stretched, and we also have these economic risks at home, i really -- it is just incongruent to me how the vix is this low, and sure there are these estimations about the robo-bids, that this really shows there is a tremendous level of complacency. i get it. i am a short seller. i am going to tend to think that everybody is too complacent or generally underestimating risk too much, but yeah, i really feel that this is -- there is

such a disconnect between reality and implied volatility and measure volatility. it is bizarre, and i think we are in for at least a little bit of a shock at some point. scarlet: all right, our thanks to carson block, muddy water chief investment officer and cofounder. there is a little bit of volatility right now as we look at 10-year yield at session lows. the s&p 500 also turning lower as well. the dow giving up its gains, and the bloomberg dollar index taking a big leg lower following a headline from "wall street journal" that special counsel robert mueller has impaneled a washington grand jury in his russia probe. so, this is a sign that the investigation in the election meddling between a trump campaign and russia is ramping up. we will discuss this next. from new york, this is bloomberg. ♪

scarlet:scarlet: all right, just recapping the breaking news earlier, according to "wall street journal, special counsel robert mueller hasn't penalty grand jury in washington. you want to get more on what this means and we are joined by bloomberg's executive editor of global, legal, and executive enforcement. one a special counsel in panels a grand jury, how does that further the investigation? have anhe fbi to inquiry, there are certain things they can do, but they need a grand jury to issue subpoenas for a lot of it, so that is what this is confirming. the need to gather information, and they have at least an penalty grand jury to issue a request for that information. julia: and the report suggests this has been working in recent weeks, so it has already been working together. how long, tickly, with this

grand jury be working before we get results, because as you suggested this is information gathering still? winnie: we don't know how early this is -- all we know is there has -- we do not know if there has been testimony. "wall street journal" says this matter.e flynn he was out as national security adviser early in the administration. since then, a much wider array of activities are being looked at by mueller. joe: when people hear grand jury, they think someone wants to bring an indictment, but the way you are characterizing it is that it cannot be the conclusion on this. winnie: that would be the ultimate successful conclusion of lawmakers get to where they are going, but we don't know the range of what is being looked at or how wide it is. inis adjusting that it is the eastern district of virginia, where washington conducts a lot of its work. typically we find things out of new york and out of the eastern district of virginia. julia: can we say anything in terms of the timing here, the

stage at which they are getting to him the investigation, or is this normal? that is the clarification we need here because the market has taken a little jolt on this. winnie: it is hard to know, because we do not know what we don't know. don'ts more circuit you impanel a grand jury if you think there is nothing to be investigated. that is the take away from it. scarlet: there could be something there. winnie: clearly, it prosecutors see something of concern in their taken the next step. scarlet: grand jury matters is supposed to be secret. winnie: it is not quite like that, to tell you the truth. people get confused. if you appear before a grand jury to testify about something, again, if this is about michael flynn, which is it is -- which it is said to be, anyone who is called to testify is free to talk about what they testified about. the people involved in the proceedings are not supposed to talk because it protects a person later in case there is a trial. julia: we don't know if testimonies are being taken at this stage.

where in the process this does come -- at the early stage, and you decide if there is whether or not coming to prosecute? winnie: we will to spend more time trying to run this down. all we know is indeed there is a grand journey. that tells us things are heating up, they need more, and they need to help to get it done. scarlet: they have entered a new stage of information gathering. a lot of gray area. bloomberg's winnie o'kelley, thank you. minute, we discuss recent economic data and we look ahead to jobs numbers, in particular why increasing trucking prices might affect us all. from new york, this is bloomberg. ♪

scarlet: "what'd you miss?" it is a good west for u.s. eco-data hounds. of course we have the big jobs report tomorrow. morning to review what we already know -- tomorrow morning. to review what we know and what

is ahead, let's bring in andrew from san francisco. joe: andrew, thank you for joining us. love having -- you always bring us an economic data point that you have uncovered that no one -- having you on. you always bring us an economic data point that you have uncovered that no one knows sees. andrew: everything seems fine. payrolls are good, the are good. we are at a nice, study state of, you know, seventh-any growth when things are starting to downshift a little bit. we started to see some weakness out there. construction, not quite as strong, retail not quite as strong. that is difficult for where i would say, we have kind of the. we are against the backdrop of everything is ok, still expanding at a decent, moderate rate. there is one curveball -- inflation. we have had mild inflation.

the cause of mild inflation, mild interest rate, everything is great, but the question is what if inflation picks up? that is where look at trucking rates, and that is where i see the curveball. trucking rates have over the past four months been surging, up almost 15%. if we take a step back, 70% of all goods in this country are shipped by truck. any kind of deflation or inflation in trucking has a profound direct and indirect, but immediate effect on inflation. everything goes up in price. it is a cost that gets passed along. at the same time -- joe: so we have a chart here that we just show the last two years of trucking prices, and we can see them having gathered steam really this year. if we were to extend this chart a ways back, what kind of relationship does this have to more-traditional, big-picture inflation measures? andrew: it has an impact. you see it more on a month-to-month basis. you're talking about spot rate prices that are pure supply and

demand. there is definitely a relationship. that 15% doesn't mean we will see 15% inflation, but we could see over the next couple of months, and uptick. if we want to play the fed watching game, is december a possible rate hike, yes or no, but if the fed were watching the economy and truly figured -- triggered by data, they might hesitate, but if we see a little rush in inflation, that might be the cover they need. i would expect to see a little inflation starting to kick in, maybe with the september data. i don't think it is going to last. i think the trucking supply demand pressures that are out there are transient, but that doesn't matter. if we are going into a place in september where inflation starts to prickling a little bit out, the market gets a little nervous -- what you do with your bonds, and i think by january it settles down again. scarlet: andrew, i want to get your take on the surprisingly we the julyweek read on

pmi. is this a sign the economy is faltering? it is the biggest side of the economy, 90% of it. andrew: as i said, we have gone full circle. the trump effect has gone away. trump is a pt barnum, a huckster salesman. what he sold was excitement. and you look at consumer sentiment from the university of michigan, you will see it peaked in january. as we got more deep into the trump administration, it started to level off until it started to roll over. if you look at these soft surveys that are more emotional than facts -- the soft versus hard data -- what you will see is as we got through the first quarter, especially what we saw with obamacare not been repealed, the height started to dissipate, and there was a question with what carson was saying earlier -- building on the dysfunctionality. we have classic gridlock in washington. consumers and household saw that.

companies did not necessarily buy into the trump hype, but there is a volatility in the euphoria. if you look at the growth, it has have over the past six months. it has been on a downslope. the excitement has gone away. people are looking at the pocketbook and saying my income is not growing as fast as it was a few months ago. i now have to work within that context of less money going forward. julia: andrew, i am going to pick up on your euphoria term -- some people say there is too much euphoria in the asset prices. you have a great chart of jobless claims, tracking that with the s&p 500. just talk us through what your data is telling us there, and we will show the chart. there we go. andrew: i love, love, love jobless claims for a couple of reasons. one, it is reality -- somebody had to go in and say i have no job. it is not a model type of number. it is real, and it is high frequency -- a weekly way to check in on the pulse of business. the other reason i like it is a

lot of the flow and add are in restaurant workers, temp workers -- folks that are basically marginal workers. if times are great, they will pile in. if times are bad, they will be cut first. when we look at jobless claims, that is a real finger on the pulse of the economy, as it is and it is prissy -- as it is perceived by businesses. what happens historically, when jobless claims are no longer dropping relative to the prior year -- in other words, we stopped cutting jobless claims and we have, basically, an equilibrium, that has always -- always, always, always been a six to nine-month leading indicator for recessions. equity markets are responding to certain signals, like a qe, but at heart, what you start to see what jobless crimes, it is the main to which the markets revert after these turbocharging effects. joe: andrew, we have to leave it there -- i have always loved

that stock relationship. thanks for joining us, andrew zatlin, founder of sao tome research coming in from san francisco. scarlet: the market is closed. the dow little changed. ♪ -- this is bloomberg. ♪ ♪

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s&p moves slightly lower on the report that the special counsel robert mueller has impaneled a grand jury. stocks little changed a day ahead of the jobs report. i am julia chatterley. julia: i am scott -- scarlet: i am scarlet fu. joe: i'm joe weisenthal. we welcome you to our closing bell coverage, 4:00 to 5:00 eastern. scarlet: the dow jones industrial average close higher, just barely in positive territory, but it would count as a record high if we hold onto these gains. the s&p 500 extended declines but has come back a little bit in the last couple minutes or so. joe: worth emphasizing, all very slight. .3% foroint it was down the day. scarlet: this follows headlines from "the wall street journal"

that special counsel robert mueller impaneled a grand jury in washington to investigate russia's interference in the 2016 election. people took that to indicate that his investigation is going is intensity. in terms of individual movers, we are monitoring tesla shares, up 6.5%, as investors shrugged off the cash burn at the electric carmaker. they like what they heard about the model three. tesla is another big mover, off by 24%. more job cuts, and missed the cut to the dividend from after slashing earnings for the second time this year. take two interactive at a record the after reports that grand theft auto videogame weapons and cars did and avon down after

announcing a ceo change. joe: rates down across the board in the u.s. dip in u.s. rates following the mueller headlines. not talking massive -- 2.22%. more of a strong move in the u k, perceived as dovish when it comes to the economic outlook. point,year deal that one 1.5%. julia: that is precisely where i'm going to start, the one-year chart of sterling versus the dollar. .oftness in the sterling today of course, they did lower the growth forecast as well. retreating the sterling from the 11-month high. and analysts coming out today and saying that perhaps maybe the softness we have seen in the u.s. dollar is about to close. show you a really long chart on that one.

end of the cycle, perhaps. the bear market tending to last a decade. it is an intersection of the moving average that a tech analysts pointed out, a possible sign of weakness. at some point we are going to show you that chart. oh, it is me. i'm supposed to be showing you this chart. i'm so naughty. scarlet: you've done it now. julia: i've done it now. sorry, guys. hooray! i'm sorry. central bank in europe to raise rates since 2008 -- marking that point as well. joe: finally come on the commodities front, we have the nymex crude oil falling by a below $49 a1%, down barrel on west texas intermediate. gold slipping just a little bit. platinum one of the big gainers -- half precious metal, have industrial metal -- gaming 1.3%.

those are today's market minutes. scarlet: looks like we got results from gopro. adjusted loss per share of nine cents. the consensus estimate was $.25. from that perspective, it is a narrower loss than anticipated. joe: interesting, too, it comes a day after fitbit ranking badger -- a day after fitbit beat expectations. scarlet: here's my theory -- it is summertime and people are out and they suddenly decide they need these tools, whether camera toit, a gopro film themselves -- julia: four analysts are really bearish. scarlet: good perspective. costs are rising for technology companies -- amazon, apple,

facebook, reporting rising expenses in the latest earnings. is it a change in strategy or perhaps a hunt for the next big business? stress here is that they companies -- sure, are spending more in expenses, but they -- the profits are rising as well. >> these are highly profitable company's, and their dollar profits are still growing. the issue is, they are spending more, the businesses are joined in a way that is putting pressure on the profit margins. each new dollar in sales is becoming less incrementally profitable. julia: i mean, i know we don't care about financials where amazon is concerned, but this is incredible -- out of every one dollar in cash coming into amazon, left with one sent after accounting for all expenses. jaw-dropping. shira: it is, and it was surprising to me, too. amazon, they have capital spending for things like

warehouses. they count for them under two different accounting methods good one is what we are used to seeing in cash flow statements. they also acquire property and equipment under the capital leases. i've tended to ignore those. but if you count the amazon cash flow statement, they left 1% for free cash flow margins. joe: so the question is when do investors care. when you think of all of these companies as gigantic startups can they don't have to care for a while. startups have never been published -- punish for lack of profits. it always seems like every quarter there is some concerns come and the stock selloff for about two hours. and then they just dropped it back up. is there any sign that could change? shira: i think it depends. amazon is the company where investors do seem to care about the spending. you saw the selloff last week.

google did the same thing. they're having to share more and more of their revenue with partners like safari, the web browser, where people are doing more web searches. those costs also freak investors out, probably for two hours or so last week. this is an ongoing issue, and the cycle waxes and wanes in terms of investor concern. scarlet: you are referring to the revenue they share with partners, traffic acquisition costs. that is something facebook has to contend with as well, whether it is video ads or original content they are producing. shira: facebook is doing this business model change that people are aware of, but it is going to affect margins, where basically, right now facebook content is free. my baby photos or your cousin's vacation pictures. the more facebook becomes like television, the more it has to show that money. julia: i was going to ask you about netflix and the $20 billion they have promised to spend. actually, scarlet is guiding me

towards apple, and for timing purposes i want to ask about that as well. the difference with apple is they are so cautious, so secret about where the money is actually being spent. shira: nobody knows when apple is really spending their money on. the operating margin this quarter is the lowest it has been in nine years, which is pretty stunning. their spending is going up. a lot of it is for research and development, probably on things like the driverless car platform they have been working on. when they are asked, apple discloses nothing about what they are spending their money on. julia: get back to the question that joe already asked, when do these things matter? doing the math here, recognizing that it is just one cent less, is that one more broadly known? do you think people would have a problem? i know you said there was a selloff last week. minor compared to the rally we have seen. if that were more widely known,

do you think that would matter? spendingthink amazon's is not a secret. it is disclosed by amazon pretty prominently. it is just that the top line is growing so fast that all of these countries, again apart from apple, and that is what matters when you are chasing yield. are these copies growing fast? they all are. technology that flight column -- numbered that flight technology columnist. ps ahead to adjusted e of expectations of $.95, roughly billion. $6.68 organic revenue down 0.9 percent. we see this stock not moving in after hours. scarlet: one or two companies moving quite a bit in after hours, yelp and grubhub.

isp up 19% because grubhub 24, more than what yelp paid for the food delivery company when it was purchased in 2015. the commies agreeing to a five-year partnership -- the companies agreed to a five-your partnership. grubhub down 5.6%. in terms of the outlook, the outlook for third-quarter revenue, midpoint of that range, around the same as the analysts were anticipating. the stock skyrocketing on the sale of eat24 two grubhub. julia: we were talking about gopro, whether it was summer activities or -- look at gopro's movement here, after hours. up more than 15%. $.25 the dollar, versus

expected. in terms of revenue, $296 million vs. 200 62 $9 million expected. beat on the top line and bottom line, and investors really liking this news. that stock up over 15%. plenty more to come. from new york, this is bloomberg. ♪

mark: i am mark crumpton. time for "first word" news. republican senators to in border security bill that would strengthen law enforcement at the u.s.-mexico border. senate majority whip john cornyn of texas says the bill haslam three-pronged approach -- strengthening the borders, strengthening current immigration law, and helping local law enforcement. it stillornyn:

requires the department of homeland security and law enforcement to consult with officials at each step of the way. the folks who live in these communities know them best and must be part of the successful border-security effort. legislation would also crackdown on so-called sanctuary cities. today attorney general jeff sessions moved to punish 4 of denyity's by moving to resources if they do not detain people living in the u.s. illegally. the department of veterans affairs is taking new steps to use technology to improve access to health care for veterans across the nation. president trump announced the initiatives at the white house. they include using video technology and diagnostic tools to conduct medical exams and giving vets the ability to use mobile devices to schedule, reschedule, or cancel appointment's with a va doctor. china says it wants to maintain a good relationship with the united states when it comes to intellectual property.

still, the prospect of an investigation by the trump administration has raised the risk of tit-for-tat retaliation by beijing. u.s. officials are gearing up for a probe into whether china violates the electoral property laws. venezuelan president nicolas maduro is dismissing the latest u.s. sanctions, saying they won't stop him. on monday, the trump administration added him to a growing list of high-ranking venezuelan officials targeted by financial sanctions. isuro is trying -- maduro trying to rewrite the constitution and overwrite any branch of the venezuelan government. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. joe: want to bring you breaking earnings out from viacom. the media company reporting q3 e

ps of $1.17, nicely ahead of estimates of $1.05. network revenue slightly ahead of estimates -- $2.56 billion. media networks adjusted , $870 million.e you see the stock reacting nicely in after-hours trading, but this is a stock that has been battered pretty hard the last few years. this was close to a $90 stock earlier in 2014. expectations have come quite a bit down over the years but getting a bump in after-hours trading. scarlet: similar story with gopro, because gopro reporting in at a loss for the quarter, but it was never than analysts -- narrower than analysts anticipated. this is because the ceo is eliminating jobs, abandoning an entertainment division, cutting costs, and stemming losses.

the stock is up by 12%. if you look at over the longer term, at one point it was $87 a share. it is now a fraction of that, $9.24. this is after the 12% jump. julia: we brought you breaking news that special counsel robert mueller has impaneled a grand jury in washington, according to "the wall street journal." with us is a senior editor of international government and ethics in washington, and jonathan julie, professor at lawge washington -- professor at george washington university. what can we do use, if anything, about the rate of progression of the investigation and what stage we are at? >> by any measure it is early in the investigation. in paneling a grand jury suggests he has evidence that could lead to an indictment. we have no idea whatsoever the target with the subject of that possible indictment. it could be anything from

low-level hackers to people who core issueial to the of how the russians metals in the election. if atld be a surprise some point he had not impaneled a grand jury. but no question the timing is news. jonathan, one of the big questions in d.c. right now is what will president trump fire robert mueller or try to somehow get him removed? does this news change anything? what would theoretically happen with this grand jury were mueller to be removed from his position? would be aell, that remarkably foolish step for the president to take. it would prolong the scandal, deep in it, and could well trigger impeachment proceedings. moreover, it could force congress to simply reinstate the independent counsel act to remove this entirely from the

department of justice. having said all that, it is hard to see or predict how the president will react. in many ways, the investigation's trajectory is taking it in a place that president trump said he did not want to go, and that is his financial dealings. pickedis week, mueller up a former prosecutor by the andres, who is a specialist in financial fraud matters. he is a partner in a major firm. the other curious thing is that there is a grand jury that has been working in alexandria, virginia. this was a grand jury that was impaneled to deal with the allegations against general flynn. that grand jury recently sent out subpoenas on financial matters. so he is creating a second grand jury. it is certainly more convenient to him, but the question is, why does he want these 2 grand

jury's proceeding in tandem just 10 miles apart? why, jonathan? jonathan: well, i think part of it is the grand jury is expanding. he is expecting to a lot of work in the grand jury. they cannot only issue subpoenas, they can bring in witnesses. that is the most effective tool for prosecutors. it can really put pressure on a witness. trigger a wire by saying something false or misleading, and suddenly you have real leverage over the witness of a possible criminal charge. the only thing i can guess is that the investigation is getting broader, and he wants the convenience of having 2 grand jury's moving in tandem. i would expect the washington, d.c., grand jury to be the center of gravity from this point on because of their proximity. julia: just want to make the point, scarlet and joe, to your point, joe, the call made by the white house chief of staff to

robert mueller telling him that his job is safe. that was the report this morning could for now at least, robert mueller is safe. scarlet: is there anything that the white house or congress canada do or might do that would influence how this -- can do or might do that would influence how this proceeds? marty: it is completely separate from within the confines of the justice department. as we know, the attorney general has recused himself. robbers and seen is the guy who ultimately could fire mueller, and his death ron rosenstein -- ron rosenstein is the guy who could ultimately could fire mueller and is said he will not do it unless you see something wrong. congress is not unaware of the potential. i agree with the professor, it would be a profoundly disturbing thing to do to have donald trump , and probably mistaken for him to at this point, try to derail the investigation.

we do have a new chief of staff who may play a role in his reaction to this. scarlet: we will certainly wait to see how the white house react to this, and when it comes, we will bring it to you. jonathanenker and turley joining us by phone, thank you so much. if you have a terminal, nature you check out tv . this is a way to watch us online, interact with us directly. here is julia speaking with carson block about the debt ceiling, what markets are ignoring, and there are highlights on the right-hand side. we have our data check here so you can pull up the intraday chart of the 10-year yield. you can see the 10-year yield -- joe: best way to watch tv, bringing up charts of the 10-year yield on tv. julia: watch the exciting interview. scarlet: from new york, this is bloomberg. ♪

scarlet: i am scarlet fu. what'd you miss? the most important of the hard data comes out tomorrow at 8:30 a.m. the bloomberg economic surprise index is in yellow. line, data of late has been coming in weaker than expected. it does not indicate a growth slowdown, but it does mean that economists have been more positive than what the data has shown. if you look at the top line, that is the blue line -- soft data, survey data. it has been performing better than the white line, which is the hard data. the take away here, joe and julie outcome is that hard to data has never seen the boom that soft data has seen. i find that interesting, given the different disappointing reads in services.

tomorrow we get hard data and jobs. julia: cfd software data holds up. up irrespective of that. the blue line is the performance of the s&p 500. we know that chart pretty well. what we don't necessarily always look at is what the market-cap intensity in the united states means relative to the rest of the world's market cap. if you come to the right hand side, you can see that it is declining. it is declining relative to the rest of the world. so we have a number of elements -- the decline in the dollar, the reduction in the number of assets out there with retails -- all of it suggest that it is time, if you haven't already, to rebalance your portfolio. joe: good reminder -- as good as we are doing, the rest of the world is doing good right now. julia: absolutely. joe: earlier in the show we were

talking to carson block, concerned about the debt ceiling, and thinks maybe people aren't concerned enough. this chart supports that. bloomberg -- i looked on the bloomberg terminal, which tracks every time someone says "debt ceiling" to a story going back 2009. here we are right now. this is getting basically no attention. this is a tiny lift off, but compared to 2013, 2012, 2011, people were talking about it for a lot longer leading up to the event. a few weeks ago and there is a lot of other stuff -- russia, health care, taxes. this is a story not on many people's radar. ulia: my fee on the investors' radar but not on the journalists' radar. scarlet: i wish we could track russia. rowley, chief for

u.s.. new york, this is bloomberg. ♪

mark: i am mark crumpton. time for "first word" news. "the wall street journal" reports that special counsel robert mueller has impaneled grand jury in washington to investigate russia's interference in the 2016 elections. under authority, prosecutors can subpoena documents, but witnesses under oath, and seek indictments if there is evidence of a crime. "the journal" reports that the grand jury began work weeks ago and is a sign that the probe is intensifying and likely to continue for months will stop democraticia's governor is reportedly switching sides. " the new york times" cites the

resources who say that -- three sources who say that he is expected to announce tonight he will join the republican party. he was elected as a democrat last year despite president trump winning the state by 42 points. the president promised a very big announcement tonight when he travels to west virginia. a group of colleges that includes harvard wants to make higher education more affordable. the schools have asked congress to exempt them from federal antitrust laws that would make it easier to communicate more openly with each other about tuition rates and financial aid packages. starts, hassan rouhani his second term as president this week. the optimism of his landslide victory in may has been eclipsed by a standoff with the u.s. government. the trump administration has added sanctions on iran, and it may take aim at iran's compliance with the landmark nuclear agreement. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries.

i am mark crumpton. this is bloomberg. scarlet: let's get a recap of earnings. the movers with yelp getting a huge lift, up 19%. six .25%, after saying it would buy eat24 from yelp. that is more than double the price tag yelp shelled out for the food-delivery company in 2015. yelp came out with results and it's full-year revenue outlook is in line with what analysts expected, but it authorized a $200 million stock buyback program. joe: shares of weight doing phenomenally well after hours. that stock of over 22%. -- up over 22%. it has an outlook for the full year of $1.57 to $1.67. q2 subscribers up 20%.

that stock had been rallying most of the year. a lot of momentum. julia: i thought i was going to be the winner with after-hours moving, and i'm actually the loser! .nd i'm still up 11% gopro losses narrowing -- i'm giving you the big numbers to make it exciting. the expectation is $.25, so much better improvement in terms of the eps estimates. revenues also beating expectations. there is guidance from the revenue line and earnings-per-share, a of narrower loss for the third quarter. that cost-cutting drive seemingly driving earnings for the company. let's get perspective. julia, i think you did have the winner. these are exciting numbers from gopro. julia: hooray! >> they had product delays,

recalls, and then they are finally showing some fiscal discipline. lost by 82%, and enormous amount of it they had a bunch of layoffs but they were able to downsize while keeping the exact same product grow back. julia: talk about the split in revenues as well. a huge chunk of their revenue is outside the united states. selina: this quarter more than 50% of the revenues outside the u.s. they said they have really been focusing their marketing on fewer countries, but really targeting them much better by localizing their services. asia is a big market, as well as europe. the majority of the revenue comes from camera sales. joe: i think it is interesting that gopro is surging and fitbit surging today. these are 2 companies that have gotten destroyed. big picture, i was looking at a chart on my terminal -- since early 2015, 1 of them was down

87%, one of them down 88%. you can see how they have flatlined. wheremostly a story of things have gotten so unrelentingly negative on these counties that it did not take much to get a pop? selina: there is a couple of things going on. these are one-to pony companies -- one-trick pony companies and the old adage of hardware, it is hard. these are 2 companies that are really trying to narrow their vision and execute on what they have. joe: hardware is hard -- i like that one. byrlet: gopro shares up almost 11%. thank you so much. julia: and the winner. scarlet: and julia is the winner. this year has been marked by solid payroll gains and falling unemployment. the latest numbers for to like come out at 8:30 -- for july,

not 8:30 a.m. new york time. here with us is michael feroli of jpmorgan. what is going to be the distinction of the july jobs months? previous michael: we think it will be similar to previous months. we are looking for about 200,000. what we have seen during the month is this things like jobless claims, and the momentum we are seeing continue. scarlet: if you look at private payrolls versus the public sector, what kind of shift can we detect that? michael: with a lot of volatility in the public sector, they get hired back on in september. inould fade what you see government and focus on private numbers, because it won't have that volatility. joe: you talk about how it will be another more of the same month. one of the defining aspects of

this job market is the disappointing pace of wage acceleration. we have a chart that shows no matter how you slice it, whether it is average hourly earnings, it is growing, but not at the pace a lot of economists would have expected. what could change? is there a point where we could get to a certain level of labor market tightness where we see - kick up?ake up - michael: i would like to say we see that tomorrow but that is not our forecast. it takes years of a tight labor market to get fast wage gains. for tomorrow, i wouldn't hope on it. also, we have got to keep in mind that the average hourly earnings can be very volatile month to month though the market seems super focused right now, and will take economists place as much weight as the markets are placing on it now. scarlet: now that joe has brought it up, a chart we are familiar with, i wonder -- anecdotally, we hear about the

skills shortage and the mismatch between employers and what potential employees can offer. why isn't that slowing down job growth or forcing wage pressures to rise? we are not seeing either. michael: myself and other economists have been surprised at how we have seen this sustained it we expected this to come down. sustainable job growth right now is 75,000. presumably, and we don't think it happens tomorrow or soon, but if we are going to get to that percent of the unemployment rate in which is what the fed wants if we make sure inflation is stable, we should expect overtime to see job gains slow. it has been a pleasant surprise that we have had the pace of job gains we have, but i would think that over time that starts to slow. julia: it is an important date of one, but only one data point. we have five more of them for the rest of the year.

what does it take, actually, to make the fed at this point though, you know what, despite the fact that we want to hike one more time and make this announcement on the balance sheet, what does it take for them to go, that is actually not what we can do here? michael: i would say that the alan sheikh, given the rhetoric we hear, that would be autopilot , unless there is a disaster between now and the september meeting. think of the market -- there is a view that it is all about inflation, but as the boston fed ,resident reminded us yesterday the on implement rate also matters. -- the unemployment rate also matters. if inflation stays around 1.5%, they could still go even with relatively soft inflation. joe: one of the frustrating things about life right now is that every conversation inevitably comes back to politics, no matter what, including this one. [laughter] joe: i'm curious, we have president trump on twitter

complaining, saying that the economy is really great, he doesn't get enough credit. --ically, is there anything and trying to think about how to phrase it -- is there anything in the economy right now, or the market, or anything, then you can say this is a function for good or bad of something we have seen out of this white house? michael: i think most economists say we tend to overemphasize how the president fx -- particularly the business cycle frequency and the performance of the economy. certainly the policies can impact of the economy over many years, but i don't think in terms of the momentum, quarter to quarter, month-to-month, not a lot has changed in the last six to seven months -- even if they are enacted, it would take time. most economists, myself included, say that whichever president is in place -- scarlet: he certainly can't say he has not impacted animal spirits. businesses feel more optimistic.

that certainly has an impact on the economy, doesn't it? michael: well, for second-quarter growth average 1.9% -- first-quarter growth averaged 1.9%. in terms of hard data can we have not seen followthrough good some of the surveys seven coming down to earth -- has been coming down to earth. i think it is an open case. julia: bloomberg to that survey, and they said they felt confident about the future, but they were not crediting it to president trump. they were not crediting his administration. tough to tie the survey data into that. scarlet: there was a big change -- julia: i completely get it. now i've forgotten what i was going to ask you. talk to me about whether or not you are factoring in the prospect of any policy in 2017 from this government, whether it is deregulation, some kind of tax cuts, even if it is not tax reform. how are you factoring it in? michael: short answer is no.

we have been even since the election skeptical that a lot would get done. ultimately, if we get a big fiscal stimulus, you would have to have in the senate a lot of the fiscal hawks change their stripes. we did not see that happening. i think for next year we have a little bit of stimulus in the form of lower personal income taxes. but that is about it. but i think for this year we are coming up on the august recess, and it is going to take time, if we get anything done. scarlet: not part of the 2017 forecast. michael feroli, chief u.s. economist at jpmorgan, thank you so much. coming up, president trump's top economic advisor gary cohn has emerged as a frontrunner to succeed janet yellen. he might be a different kind of animal at the head of the central bank. from new york, this is bloomberg. ♪

scarlet: what'd you miss? goldman sachs bankers have been at the intersection of wall street and washington for a long time, and now gary cohn, president trump's top economic adviser is in arms reach of perhaps the holy grail, chairman of the federal reserve. is also getting the top spot is the subject of the top story in the new issue of "bloomberg is this week -- "bloomberg businessweek." someone put the question to president trump, who says that cohn is one of the people under consideration. someone asked me whether this was gary cohn's goal all along, to be fed chair. >> like to gary's master plan? scarlet: maybe. >> there are not that many

bigger plums then chairman of the federal reserve. on thisiters an eye piece, we were talking about all the positions that veterans of goldman sachs have gotten. basically every powerful economical in the country in the world -- think about mario steve mnuchin. but there is never been a goldman banker atop the federal reserve, and it sure looks like .ary cohn is in the mix no one knows if you'll get it. no one knows if you necessarily wants it. joe: strikes me that we think lately that fed chairs have to be academic economists -- janet, ben bernanke foremost among them. but it has not been always that way. there and lawyers atop the -- there have been lawyers atop the fed. the fact that he doesn't have an academic background is not necessarily a problem. volcker, no phd.

snob lawno stop l-- that you have to be a doctor. more than that, being an academic, gary's whole personality and career is built on being a very aggressive trader. speaking with his own friends from goldman sachs, he would be a bulldog leading a bunch of eggheads. like theal reserve, economist was just here who spoke so elegantly and calmly, the federal reserve ways their words carefully and decisions carefully. they take days and months and years to come up with consensus. it is slow, cooperative, rigorous -- it involves a lot of reading. personality is very much a guy, as we wrote in a profile five years ago -- he plants his thigh close to

their face on a desk. the thing that is nice about gary is how he tells you he is going to kill you before he kills you. d. is not a quiet ner julia: what could be a bonus here, his understanding of the markets and what things move markets in particular, too. are we suggesting that he cannot calibrate and be more careful and cautious about the language that he uses? are because people suggesting he is brash doesn't necessarily mean he can bea something different if he wants to head the federal reserve. max: i think that is a good question, and the answer is a bit of a two-edged sword. on the one hand, it is a great thing, because you want people who know what they are talking about. one of his friends said in a piece -- i think it was the former chief technology officer of goldman sachs -- said to us,

he will make up for his lack of economic expertise with tenacity and loyalty. to thes tenaciously oil market and to players like goldman sachs, that would be seen as a negative. the federal reserve chairman needs to weigh everything equally. julia: may be too dovish. scarlet: perhaps, perhaps. you mentioned that the fed is collaborative and contemplative will stop how collaborative is the fed chief's job? certainly bernanke and janet yellen worked to form consensus. but was alan greenspan that collaborative? there were no opposing votes when he was chairman. max: so cool that you bring that up, because my colleague, a wonderful federal reserve journalist, brought that very issue up herself. it is not like greenspan was mr. consensus. but i just want to point out that the chairmanship -- you are really the first among equals. be the most might

prominent, but you definitely -- in the past year we have seen consensus throughout. consensus is important. joe: you never hear anything bad about gary. there is so much bad stuff said in the press and the leaks and everyone backstabbing each other. crew doese breitbart not like gary cohn, but for the most part you don't see that stuff about him. that ifould say if there is one moment gary would like to have back, it is not a moment like scaramucci where he was caught cursing loudly in front of a journalist. i think that moment would be when he was one of the two people along with steven mnuchin, another goldman sachs executive, who is going to unveil this big tex plan. it felt like a monumental moment. health care is difficult, but tax reform seems like it could happen. gary and stephen came forward with this tax plan, and it was this one-page -- not much there.

people were disappointed that hefte was not more there. gary has not been caught in any major scandal. things are going relatively smoothly. julia: i've never seen steve mnuchin look more uncomfortable on television. thanks to "bloomberg businessweek" reporter max abelson. you can read the story in the latest issue of "bloomberg businessweek," on newsstands now. great article. tomorrow on bloomberg television, 9:50 a.m. new york time, we will get his take on the fed, the jobs report. coming up, square's lending business is booming, but the ceo says he's not trying to compete --our exclusive interview with jack dorsey next. this is bloomberg. ♪

julia: what'd you miss? square's lending business is booming. the company, led by twitter cofounder jack dorsey, posted strong earnings in the second quarter. emily chang sat down with him at headquarters in san francisco, where he asked -- where she asked what was the biggest driver of growth in square. >> our core business. we are continuing to build a business that scales. we are reaching small businesses, independent contractors. we realized recently that we are not really competing with financial institutions and banks and additional lenders. our average loan size is $6,000. we're competing with people going to their friends and family and asking for a loan. that is a massive market. we continue to innovate within

that space, but it is just like -- it has got great fundamentals to it. and it's something that continues to be attractive to all of our sellers. emily: let's talk about the decision behind the physical car you are offering. do you want to offer more actual bank services? jack: four years we have taken on a partnership minds of with banks. we are not out to replace banks. but what we have been really good at is making what they currently offer today accessible to more people. we started with sellers, and we industryou know, an that would only enable 40% of people to get something through credit cards, we took the number to 99%. we think there is a lot of room still to do that in the cellar spaces like square capital and loan. but also on the individual site as well. when you consider us -- i would consider us a simple, easy way for anyone to be able to start

immediately and participate in the economy, whether that be on the seller site or individuals life. when we are seeing with square cash is we are reaching the underserved and under banked. it is a very young audience as well. that makes us really proud. but it is consistent with what we have always been. julia: square ceo jack dorsey right there with our emily chang. for the full interview, watch " bloomberg technology" at 5:00 p.m. eastern. joe: coming up, when you need to know for the trading day. this is bloomberg. ♪

scarlet: one word, jobs tomorrow at 8:30 a.m. joe: berkshire hathaway reporting after the velvet new assemblyela's is inaugurated. scarlet: that does it for "what'd you miss?>" joe: have a great evening. this is bloomberg. ♪

alisa: i'm alisa parenti in washington, and you are watching "bloomberg technology." the wall street journal is reporting special counsel robert mueller has enlisted a grand jury in washington to

investigate russia's interference in the 2016 election. that is a sign the probe is intensifying. prosecutorsthority, can subpoena documents, put witnesses under oath, if there is evidence of a crime. governor jim justice is reportedly switching sides. sources familiar with the plan say he is expected to announce tonight he is joining the republican party. trump had promised a big announcement in west virginia. leaked transcripts of phone calls president trump made to world leaders underscore some early difficulties navigating foreign affairs. revelations include trump imploring president pena nieto to stop saying publicly that mexico won't pay for the border wall. arizona senator john mccain says u.s. commanders in chief are responsible for the military's