, we had some very good second quarter 2017. bydeutsche bank stands income. they want to redeploy capital in the unit. more from this was an interview with him. mr. younger heads to washington. calls fore juncker both countries to get rid of all tariffs. when gm and ford automakers report higher info costs and president trump wedding at 20% tax on eu imports. david: i'm david westin along steel.very excited alix general motors beat earnings. there was right in line on revenue, but it also took down the full-year forecast. it was apparently coverage of two things you will love, number one is commodities prices with steel and aluminum coming in.

that's tied back to tariffs and they are also getting hurt by fx in latin america. argentina and brazil. they record equity income from china. let's hope that holds up with going in on chinese trade and record on the financial business. fiat chrysler cutting their full-year outlook for revenue as well. that stock is limited down in the lawn by over 4.5%. he do reaffirm their target for the full-year for adjusted net, it's the revenue that was cut down. david: we can't talk about fiat chrysler without talking about the man who turned around that company largely and came in to reformat, to reform the company fundamentally and then there was an agent'sthat hit position in chrysler at a time when everybody thought that

company would not succeed. ironically, it ended up being the saving grace for fiat, it ended up chrysler was making the money more than fiat was. alix: it raised the question of what's coming in next. the new ceo will be taking the helm for the first time. and we have the jeep is going to be an important strategy going forward but it's also dealing with geopolitical risk. how will you be able to deal with that as tariffs continue to bubble up? david: this is the day harley given over automobiles. risks whetherical it's commodities prices or steel and aluminum with trade problems of europe potentially as with china, it's a big issue. , upser earnings just out is just down adjusted earnings per share in the second quarter is $1.94. they've actually taken up their free cash flow you for the year. ubs coming out with a slight beat and their stock is actually

down 1.28%. alix: it's not enough for missing that midpoint estimate. i also want to check in here with coca-cola, they came out as well. it's good to get consumer .taples in they are beating estimates and the operating revenue came in really strong and beating estimates. organic revenue up 5%, really helped by the water and sports drinks and beverages -- sugary beverages are not as hot. the sports drinking water section wound up being very good for this company. he did see a 3% currency headwind based on the current rate with an impact on the hedge position as well. the coca-cola ceo said organic growth is the issue and his main goal is to make sure he could grow it organically. now it's time for the bloomberg first take joined by marty schenker. and by joe weisenthal.

we have a new presidential suite out. every time i see a weak saying i want to stop trade talks, think what are they thinking? tradet $817 billion in last year, no weakness. this is setting up this meeting between president trump and the president of the eu, jean-claude juncker later today. don't forget that! exclamation point. i don't expect any agreements, this meeting and i think there is no press availability scheduled, but watch for that spray before they sit down next to talk. marty: that for donald trump might actually set the tone. david: jean-claude juncker is an interesting character for donald trump to deal with. he gave an interview in germany

that that we want to avoid a trade war, but if they go after us, we will retaliate immediately. he talks tough. marty: he is a tough cookie. and he is the guy in europe on trade and tariffs. he has the complete backing of the eu, and he is not going to sit back and be in any way abused by this president. alix: the backdrop, yesterday, risk on. money coming out of small caps and going into small caps into emerging markets. joe: yesterday was a major reversal of what one might call the trump train. inve seen lots of investing small caps deemed to be less exposed to trade emerging markets getting creamed. yesterday was a major reversal. it could be a position thing it was a very stressed idea and everyone was into that. because of them to do not with trade at all in the fact that china has been engaging in stimulus, that could be boosting the emerging markets.

one of the most interesting questions for medium-term traders is whether yesterday was the start of some sort of reversal of that trend. what it tells us about trade, it's probably too soon to tell. alix: reversal of trend brings us to deutsche bank. we had an exclusive interview with the ceo after their quarter. here's what he had to say. >> we went through a transformation in the second quarter, you see the one of the other adjustments we have done. andid it in one quarter that would build up the capital and would bring it back to the business and with the processes we have in the client franchise we have come i'm very confident that we will see growing revenues in the business going forward. down 17% and these the wants to read apply capital. -- read deploy capital. want to see that the company has itself well

organized internally. not just the u.s. side, but the stress test in the company is all right financially, there's just a perception that is disorganized and internally the controls are great. -- are not great. people just want to feel like it's being will run for the moment. to talke also need about regulars. deutsche bank had issues with the fed and the fdic as well as over in europe. marty: just a month ago, we were breaking stories left and right about the disarray that deutsche bank was in, layoffs and a lack of a strategy. if your we have the new ceo basically expressing confidence going forward. regulators will take great he'd and how they read or that capital. --id: general murderers general motors, seven minutes ago they broke their earnings and they beat on

earnings-per-share and revenues slightly. is down in the stock premarket trading and that's because they took down their guidance for the year on free cash flow and on earnings-per-share. that's because of commodities costs, steel and aluminum particular. is noteir point of view directly because of tariffs because they resourced 90% of their steel and aluminum from the united states, but those prices have gone up. marty: this follows whirlpool and others who expressed concern over supply chain issues and the cost of raw materials. earningsrd guidance on is more significant than the reality of today. i think going forward these talks today in washington are going to inform a lot of other companies what to think about the future. alix: i was talking off the record with an oil investor young for pipelines, if can't -- they would rather wait

and delay the pipeline build out to get the steel aluminum from the u.s. rather than deal with tariffs or they have to pay up at all that winds up hurting margins or slowing the growth. there's going to be less short-term. joe: someone has of for it somewhere, there's no free lunch right now read i was fascinating reading through the whirlpool conference call transcript. the ceo is talking about how it's inexplicable. beyond the tariffs they say they can't even explain why the cost of steel and other raw materials in the u.s. are so expensive right now. it's obvious this is going to be a major theme for anyone that builds anything right now. pipelines or cars or washing machines and dishwashers or whatever it is. they are all really feeling the pinch. want to raise prices, they say they are raising prices, but is not obvious that there's tons

of pricing power for these consumer facing companies. cheating -- i'm going to be speaking with what happened at g.m. on the second quarter. are now inative we earnings season so we are starting to hear from ceos real concern about the effects of the tariff disputes on their future earnings. the president is getting real pressure on the our side from republicans on the hill. trump justdonald gave a response to those republicans on the hill. he is asking for patients, he ce, he's-- patien going straight ahead. it doesn't matter if republicans support him or not. alix: marty schenker and joe weisenthal, thank you very much. onant to take a quick check the markets. equities trending lower, s&p futures off by three points.

you have general motors off by three, fiat off by 7% and ford off by 2%. u.s.,rve's letter in the and crude down by .1%. we had a risk on day yesterday, will roll over today? we bring you more of our exclusive interview with deutsche bank's ceo. this is bloomberg. ♪

david: deutsche bank rewarded earnings earlier today, showing continued decline in revenue and income with the fixed income business hit particularly hard. it was down 17%.

isistian sewing says he committed to that business. mr. sewing: it's a business within the corporate investment bank, we had a very good quarter 2017 in particular in the credit rating. yes, we went through transformation in the second quarter. you see the one of the other adjustments we have done. we did it in one quarter. now we build up the capital and we bring back to the business and with the processes and the client franchise we have come i'm very confident we will see growing revenues and that business going forward. >> you say you remain confident about maintaining your position is the fourth largest house globally in fixed trading by revenues. what gives you that confidence? mr. sewing: the client feedback we get. i've seen more than 150 clients , they wantd honestly

to have an alternative to the u.s. banks. they see us as the european bank offering the full range of corporate investment banking services. this gives me the confidence. secondly, the expertise and products we have been that also, if you look into the underlying business into the developments which i've seen over the last month, plus the capital position may have come i'm confident we can grow. >> what about the private commercial bank? i assume this one is close to your heart. why do we see revenues here dropping 10% even with selloff not included? mr. sewing: if you take out the one offs from last year compared to this one, we have flat developments and that in interest-rate environment which we have here in europe again in an environment where in the second quarter we completed the largest merger of banks in germany since the european central bank is in place in 2014, that is actually a good result. we have shown resiliency despite

the focus on the merger. in the we are growing lending business, we are growing the assets under management and that speaks for that which is my ultimate goal. business of the bank was more , which isenues sustainable and profitable and when growth from the private and commercial bank in that direction i can see with growing lending and growing assets. >> let's talk about the rates environment. we seem to have a pretty clear path for mario draghi and the ecb. are you we can see rates increase in how important is this year business -- to your business? mr. sewing: we are focused on the next 18 months. we have set ourselves clear goals for the next 18 months for 2018 and 2019. we are saying we want to have a return on equity of 4% at the end of 2019 and that does not

depend on the rates increase. plan what we can actually influence, that's cost and capital and that's what we're doing. it would be nice to have a rate increase, however, is not in my hands and this is not an underlying driver for the next 18 months. it's always hard to react rate increases and therefore this is not part of the plan over the 18 months. alix: that was deutsche bank chairman and ceo christian sewing. joining us from freiburg is matt miller. no pressure on that interview, nice job. there were questions as to deutsche bank is going to stay in london or have to move because of brexit. did we get any read on that? matt: absolutely. a lot of you have been speculating about whether deutsche bank would give the material presence in new york are not as well. he told me they will stay in both places and he says as love is concerned, he still considers

it the european finance capital and thinks it will continue to be such after brexit. , he says hee u.s. wants to remain at least number four in global trading and sales of fixed income currencies and commodities. in order to do that, you absolutely have to have a serious presence in new york. they are reducing head cuts clearly, there's been a bit of a brain drain that we have been reporting on, they will keep a presence in new york and continue to serve clients. alix: they still want to be number four, down 17% didn't help. matt miller. if you are an investor you want to be in the u.s. or europe. track on theuation blueline is european bank stocks and the white line is the s&p bank stocks read valuations are slipping for the european peers. , nuveen chief equity

analyst. is the value coming from banks? doll: my answers you can on them both. i think from a longer-term perspective we have to understand how much work the u.s. banks of done on their balance sheets and cost structure and i think they are ahead of european banks on that score. and that's why they are bit more expensive. neither are expensive relative to the market. own the both. david: how much is the valuation for european banks just because of the ecb? mr. doll: no question about it. that's a big issue. secondarily the issue is have they really cleaned up? rodriguez banks were forced recapitalized -- forced to recapitalize? they did it.lad european banks never really did that as a result, they have that cleanup in front of them. move on to the

u.s., in terms of other european assets, you have to buy europe. is that still going to be the call? mr. doll: my view is that was overdone by a bit. european growth is i think fraying at the edges. alix: is the global growth story rolling over, or just in europe? mr. doll: it's fraying a lot of places. goodness thethat u.s. is a strong engine which is keep in the world moving. states, wehe united have a lot of earnings. general motors, coca-cola, quite a few. what are we seeing from earnings? they are up a lot, but look at the red with general motors, ubs and google let down. how much of this is anticipation of trade problems? mr. doll: a lot of it is the case. we have to put in a cosmic now. we have this fantastic economy an amazing earnings, but the other end we have the te

pressure coming from trade and that tug-of-war. unless you beat by more than expected, it's really tough for your stock to make headway and that's this trade-off. david: this is the puzzle i have, earnings are coming in quite strong as opposed to possible fears about trade. most people you talk to say we don't biggest going to get that bad on trade. what is that based on? thus far it's been one direction it has not been good. it's a hope and a prayer. market hate uncertainty and we have a lot of uncertainty. we don't know how it's going to get resolve and it probably gets worse before it gets better. just watch the president's tweets every night. alix: everything to 2019, i remember the caterpillar high water mark that's what it conversation for most companies. this is by far my favorite chart of earnings seasons. the orange bars of the

investments for 2019 and the biggest ones are energy, materials, industrial some technology. versus the price change for those indices not living up to what their earnings should be. do earnings us and to start coming down? for next year, you are right. for the reasons you said as well as cost reasons. it's probably premature to talk about because the numbers are so strong. alix: that's not pricing yet. mr. doll: i'll think so. gm, when they knew they were going to have problems with info costs with the stock down 4%. david: is the market property --

properly valuing equities it's come down. the remainder of the cycle, it will keep coming down. he saw the peak in january. that was the peak for pes. night of this race between advancing earnings and pressure on pes and earnings are modestly winning the war so far, that's going to be a dance we place a lien of the cycle. alix: is this the defensive call? mr. doll: just be cognizant of prices. we have this nice run to 2800 yet again, for the fourth time we run to 2800 and age time we have found a reason to move back. i don't think we are plunging ofough, towards the high-end the trading range, i get a little more cautious. david: fiat has gone through a with the ceome stepping down. and then passing away.

they are down like 10% right now in milan. that has him challenges and they have some of the geopolitical issues you just talked about. buy?at point is fiat an mr. doll: there are more issues to come. that list is a little on alongside us in renting a shot here. -- [no audio]any alix: do you feel like we are going to be trading on the macro or idiosyncratic? was the correlation going to wind up being? mr. doll: both. alix: how you hedge on that? anddoll: company by company

price by market price. is a tougher environment. we had six years of multiple expansion a good earnings. i bought a stock in the earnings to get up, or p took it up in a lot of cases earnings mpe took it up. i have pe headwinds for the reasons that we all just mentioned. the macro issues. i don't want to come across as bearish, got a lot going down big with his massive earnings improvement by a hard time seeing 2900 and 3000 anytime real soon. david: what about individual stockpicking? sergio marchionne left behind a very strong balance sheet. he cleaned up a lot of the debt when she really inherited so to some extent, this is actually a strong company in terms of balance sheet. david: that's good news --mr. doll: that's good news will get us to the end of the recession and i know that's going to get us through here in the end of the business cycle in a big way. of the consumer

cycle and coca-cola had better earnings for ubs missed on the full-year midpoint estimates. the consumer going to be strong enough to make of any macro headwinds for the staples and discretionary? mr. doll: it will from a topline perspective, more of us are working, some people are starting to make a little more money and the savings rates come down to the accomplice to spend the money. consumer is pretty helping the think we have seen that in the consumer discretionary stocks here today doing so well. alix: bob doll the sticking with us. david, you continue to watch fiat. david: it's a fascinating story, they have a reduction. much more coming up right here on bloomberg. ♪

alix: this is "bloomberg daybreak," i'm alix steel. today we're getting earnings the don't feel so good of market like with gm, fiat, and ford.

equities down by .2% in the dax down by .5%. deutsche bank has his income currencies trading off by 17%. a wait-and-see for the ecb tomorrow, euro-dollar trading at one dollar 16 ends. eurosterling, theresa may is heading up a brazen negotiation. that does not necessarily pose well for the negotiations and the 210 spread continues to get flatter. out, andcoming adjusted loss per share of $.23. not as bad as with previously estimated. that stock up by over 2% in premarket. they also are looking at production coming in about 247,000 barrels a day. do you wind up buying back stock or helping shareholders or do you wind up using more for

exploration? exxon has been doing the letter and not been rewarded for it. any sort of linebackers going to be interesting. david: boeing beat earnings estimates. they also took of the revenue forecast for the rest of the year. this is largely on the strength of civilian airliners and they had a lot of strong deliveries in the second quarter. the cash flow without at the same time we are watching going closely on the tariff and trade aree because they particularly vulnerable that boeing have good earnings out for the second quarter. , secondneral dynamics quarter revenue was almost 2% above estimates coming in at $9.19 billion and the backlogs at $66 billion. it feels like continuing strong result from the defense guys. although the stocks are not really trading in premarket yet. david: when the government spends a lot on defense, it helps.

alix: when they say to germany, get to 2% for nafta, that helps. the focus will be on the us letting trade war the president tweeting earlier every time i see a weak politician asking to stop trade talks for the use of tariffs to counter unfair tariffs i wonder what can they be thinking? we just going to continue and letter farmers and country get ripped off? $817 billion on trade, last year, no weakness. that's specific talking about soybeans in china. 20 is not from washington is kevin cirilli, and what is mr. juncker walking into today? president trump doubling down his affection for tariffs despite republicans urging him to reconsider. yesterday the usga releasing some farm subsidies to help alleviate some of the concerns from phenomenal republican state ahead of the midterm elections. hearr. juncker is going to

about his disdain for the $150 billion trade surplus and the eu was with united states. these are really focusing on the 15 million jobs on both sides of the atlantic as well as the more than $20 billion and retaliatory taxes that the eu is readying. how u.s. see companies, not just lawmakers the companies are reacting to all of this area gm and ford have earnings released today, will they know the uncertainty coming from trade? no joint press conference going to get more from president trump later this afternoon. david: kevin cirilli, thank you. we welcome now ambassador karlov , served as united states trey burton of as well as secretary of housing under development. it's good to have you here. ambassador hills: good did join you. what does president trump

want and what does jean-claude juncker want? hills: president trump said he was focused on bilateral deficit and he put tariffs on some key sectors. wantsk president juncker to keep markets open and i hope that they create some kind of a format for moving forward to open markets, because you don't win my closing markets. in fact, we already suffered from the uncertainty. david: the president has opened the door to that, saying we should eliminate all tariffs. most people think that's not quite realistic. is there realistic process we could come up with lower tariffs and can the eu do that just with united dates without including other countries on multilateral deals? ambassador hills: no, the wto requires you to give national treatment, nondiscrimination in

the global trade. unless you have a free-trade agreements. that covers a lot of issues. i had hoped that we would of stayed in the transpacific partnership and created a template for moving forward trade with other trading partners, but we didn't. but we can't do selective i'm going to eliminate tariffs for one country they keep them up for another. david: what does that mean realistically we can hope for? as a practical matter, germany exports a lot of cars, france does not, so that you within its own realm has some conflicts. we wouldr hills: suffer from the tariffs. there is a single u.s. car manufacturer and that doesn't need important parts to make a competitive product. not a single one. he put tariffs on, you raise the price, our product becomes less competitive. my hope for this meeting is that

they sit down and quietly worked forward on how to we open up trade between europe and the united states? it would be wonderful of the president would smile and stop talking about auto tariffs, and start talking about market opening. there's a process you have to go through the you know so well done in washington. what is the timeline from the united states part of you, assuming they don't come to an agreement today, what's the time one-on-one auto tariffs might actually be imposed? ambassador hills: that's a friends -- that depends on the president. read his last week. i can tell you one steel and aluminum tariffs that we have outsidetimes more jobs of steel aluminum then we gained in steel and aluminum. device toe not a good enhance your economy. , so are a terrible device

let's open up the market, create opportunities for auto companies and soybean sellers, already, soybeans have taken a hit for abovext year, estimated $3 billion. david: matter ambassador, thank you for spending time with us, ambassador karlov hills joining us from washington. doll is still with us. no one went to tariffs actually cut in to the benefits of the tax cuts? from the makers in the gated them altogether. mr. doll: you just pointed out in autos, it slowly will tip away. a tariff is a tax and when you tax something, you get less of it. nobody wins. their relative winners and relative losers, mobile's vision is if you and i get a fight and you get one black eye and i get o, you are relative wehner,

but we are both were soft. great,arnings are tariffs, we're also going to talk about it spacex is set to watch the falcon nine rocket is going up along with its next satellite. you looking at the launch site at vandenberg air force base in california and there's about 10 satellites that will be launched momentarily and you are looking all the assetsg you need to check before you go into space. blossom,s is matthew we are two minus three minutes here, what is the significance of this? is early stage of the latest generation of this falcon nine rocket that you can they are really trying to demonstrate the reliability of the system, because they want

to be able to use its take astronauts into space, and human spatial will be on that silly really demonstrate that this new version at least is reliable and importantly that they can do another successful landing of that booster stage back onto a drone ship in the ocean so they can start to reuse this, because this rocket is called the block five and where is the previous version can only be reused a couple of times, the plan with a block five is that you can reuse up to 10 times with minimal repair work and that you could potentially have about 100 uses out of a single rocket over its life. it's really important in terms of improving the viability of cost-effective space travel. alix: they are about five seconds away from the launch. let's take a look at the lift off from spacex. >> liftoff, falcon nine.

alix: you are looking at the spacex launch of the falcon nine rocket, it's going to launch 10 satellites from the vandenberg air force base in california. cloudy, but you got the idea. and the cool part is we wind up seeing an attempt to land the falcon nine first stage following the space separation. that it launches exciting to watch. it puts us in the larger context of the iridium project and where this is. they were trying to prove this is reliable. is not the first of the

satellites to be launched, they have 10 on this vehicle. matthew: this is the seventh of an eight series project with iridium. they are putting 10 satellites up the space with this particular launch, that will be taking them to having 65 satellites in the system often low orbit and they will be one more launched ago which will take the final 10 satellites up there. that will be 75 up in space of which 66 are essentially the operational satellites and they have nine floating spare satellites up in orbit just in case something goes wrong with that consolation of satellites. this is essentially an upgrade to the existing iridium network. the iridium satellite network is the only network that has complete global coverage and provides a mixture of voice and

low bandwidth data services and the next upgrade they are going through is nearly completed basically boosts the kind of and capacity of the network makes sure that iridium is keeping up with the requirements of their main customers, which is across aviation and maritime in particular. --david: we are watching inside the vehicle itself, the , butation, it's too foggy again to go back, the last of the original iridium was launched in this 97. a lot has changed, for example, cell phones and mobile. matthew: it has. i guess things will continue to change. i think satellite communication has always kind of been relatively niche part of the overall communications landscape. we've certainly over the last couple of years had people like

facebook wanted to take internet connectivity to the kind of hard-to-reach parts of the world likeafrica and so things this iridium network can kind of help to fill the gap, there's a lot of projects going on looking the kind of take that into every corner of the world and this is kind of an important part of that. platformst-effective the spacex program are key to continuing that evolution. alix: amazing pictures. david: it's amazing we can get pictures. the quality. alix: the falcon nine first stage engines have cut often have separated as you pointed coal gasou have nitrogen thrusters are firing to reorient what's left. bob, you want to go into space? mr. doll: summer vacation up there would not be a bad idea. we'll see things are different perspective.

we take all this communication stuff increasingly for granted and it sounds like this is just going to improve, it's really about quality as we just keep upgrading the quality of medication via satellites. i also find interesting it is being led in some part from the private waste great iq on musk and richard branson, jeff bezos. it's not necessarily only through government, it's really a private place. very exciting. it is still the next frontier, and we been saying never decades it seems, but these guys get a kick out of making an impact in space. take me to the business, iridium, it's a publicly traded company and their people like blackrock who own a fairy amount of it. -- a fair amount of it. mr. doll: it's pretty profitable.

i think what you find the verylite companies is it's into cash flow generation. billion program. it's a huge amount of capital they are having to deploy that ultimately wanted that there, you are looking for a decade or more of returns on that investment with relatively low incremental cost to keep it there. you get kind of a lobby business model, but the cash flow is good. it's becoming more and more competitive. you see that across the landscape, satellite companies are forming their own niche is, but the market is getting a bit more crowded and we have certainly seen recently some attempts of consolidation to really improve the mid-to long-term prospects for the sector. even the simpson looking to

the things they've got for terrestrial mobile use as well. david: we are waiting for the stage one booster to reenter the atmosphere. it in just land that down to what will be reusable. that's pretty extraordinaire for those who remember the early days of the space program. alix: completely important for reusing it going forward. it's more cost efficient and you do more with it. recap, the spacex launching 10 satellites from the vandenberg air force base in california that has successfully done so we are now waiting for the falcon nine is reenter the first stage of the atmosphere. david: matthew. this elon musk make money off of this deal with iridium? or is this really a loss leader? company,it's a private

my sense would be that the scale of money going into these projects is that is a successful venture and its growing momentum, that really take it they need this block five relaunch program to be successful. falcone are waiting for nine to land through the wind and sea conditions for the drillship of the worst ever seen, so it should be adjusting. looking at that landing. the focal we can see the whole thing. beding gear seems to deployed. we were first stage on the drone ship. >> coming up on eight minutes in the flight. we get second stage engines shut down about 15 minutes, following which we enter a 43 minute coast. do you want to go into

space? david: it's not a bucket list, but it's great to watch. are guiding ourselves in the final orbit and then we will shut down the engine. david: the report was the first stage booster successfully went on the drone ship, i believe it's what he said but mission control said we didn't get to see it. because of the fog and the conditions as you said have been particularly bad for them. alix: we are looking at the trajectory right now. >> we've heard the call. >> confirms good. david: it says they have injected the satellite and the parliamentary orbit. >> second blaze is right where we want to be in it also appears -- david: on target orbit

injection. >> the first stages on the drone ship with there weren't any lights. alix: you continue to watch this on live go. as pictures and video after spacex launched 10 iridium next satellites from the vandenberg air force base. the falcon nine first stage of your safely on friendship in the pacific ocean and it was mentioned that earlier. falcon nine first stage of hearing it safely on the drone ship in the pacific ocean, pivotal for making space worth economics. david: what is next for spacex and commercial space travel? matthew: they got a busy for the falcon nine and 2018, some of those commercial and some of that is resupply of international station. this is a think the third time the views the block five and

back in may, they basically disassembled that particular essentially prove they would need to do some of them going forward. it will probably be doing a lot of detailed work on how that booster rocket has survived a launch and reentry given the conditions, is great they were able to land it successfully. they will feed that back into the program and keep doing more launches and working both of the commercial sector and with nasa to demonstrate improved this is a completely reliable platform and that they can take it forward to that kind of idea of exley having people sitting on the top of that rocket in what they call the dragon capsule. its where he wants to take is to get as quickly as possible to the point where they can consider this for taking astronauts into space. david: the successful launch of 10 iridium satellites into orbit by spacex. thank you for being with us.

xham, thank you for joining us. and bob doll, we cover the whole world and more. for more on spacex, pick up bloomberg businessweek, the space issue. are sticking with the first topic is cost of space. richard branson wants to take you off as i wanted out of this $.25, but just for a mere million. and then ryan air strikes out amid walkouts by european staff and airlines make some pretty heavy cuts. analyst wall street thinks it's in the asset disruption business. i couldn't get her to tell me how many cups were in for leaders. david: i was in the study last night and it thought i was talking to it. joining us as jason kelly to talk about wall street.

richard branson speaking to david rubenstein on the "peer-to-peer," program. jason: i'm interested to hear we >> we spent 40 years working on our space program and it's been tough and space is tough. it is rocket science. think we are on the verge of finally fulfilling that dream. before the end of the year, i in a virginitting like expatiate going to space. rubenstein is david speaking in "peer-to-peer," with richard branson. at the 95 tonight. jason: i liked by the end of the euro will be sitting in space.

it's $250,000 with the market of people who want to goa sarcastic. i get he wants to go into space, but $250,000 for like half the height of what the satellites are? what do you see the kind of cash? david: the people we're talking about, to $50,000 -- jason: we talked about the space race a story as between countries, this is the space race between a bunch of dudes who probably are competing in a different way from a commercial perspective. i've had a chance to read in to this new issue of business week there is some great stuff about where this is really going and drug research that's happening in space, some actual real commercial use. it's, but it does -- it is above the earth.

ryanair. they been having a lot of trouble with their pilot -- the pilot union. jason: i was vested with is because playing this out we always look at what people are reading on the bloomberg. ryanair is really disrupting air travel across europe, talking about 600 flights i believe having been canceled, they are bringing down the number of aircraft that they're going to have in the air next year. this is just a good old-fashioned labor-management dispute and we will see where it turns out. seven real implication at a time when the european economy, people think it's coming back. let's talk about other venture for a really rich ceo. amazon, stanford bernstein just said amazon is well-positioned to stick up the asset management industry, they could do really well even though they're generally not exploring it in any way whatsoever. they could be.

jason: i was at this voice summit in new jersey with bloomberg radio and we were talking about all this voice activation technology. it's amazing how much more reliant people have become and will become all the david, do your point earlier, there are still these little questions about privacy and whether this technology -- david: do i really want alexa advising me for my money? amazon has a lot of people, be that, what they know about investing money? don't know probably much. it's really more of an access visit -- issue rather than advising. is the ability to get to it in the same way that alexa and the echo have a lot of skills that you take, whether it's a recipe or first aid or things like that. have nothing the benefit of any of those things. maybe i ask questions too fast. i'm having a hard time doing it. david: it gives you music?

alix: that is true. -- bake to a musical the other day. jason kelly, thank you for joining us. dell futures as of the futures little negative in part from earnings are getting out, general motors off by sixfold percentage points and has beating estimates, that stock moving higher in coca-cola pretty much flat. it's truly about the auto industry getting hit today. david: check stevens will be talking us about that 6% decline in stock price and second quarter results in the forecast for the rest of the year. light from new york, this is bloomberg. ♪ this isn't just any moving day.

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investment bank, we had a good second quarter 2017. alix: george bank -- deutsche by ficc.ding mr. juncker heads to washington. gm and ford under tariff attack. forecast withfit supply chains at risk and president trump threatening a 20% tax on eu imports. >> welcome. talking about automobiles. what you were talking about, how are they going to deal with this trade issue. alix: really interested in that. having a direct effect on the market, dow jones off by triple digits. part of that is gm.

class, the curve continues to flatten here in the u.s.. david: time for the morning brief. we will get new home sales data for the month of june. u.s. treasury auctions continue at 11:30 with the sale of 2-year note's. and after the bell facebook has been -- will be recording second-quarter earnings. alix: updates of outside the business world. has made at trump late-night proposal on trade before meeting with the european union officials calling on the tariffs.u.n. to drop the president meets with the european commission president jean-claude juncker. president trump is

congratulating next goes president-elect and warned him about trade at the same time. successful rig of nafta must be done quickly. in laos, rescue crews are searching for hundreds of people missing and floods caused by a collapsed dam. they begin evacuating before the disaster. 6000 people have been left homeless. global news 24 hours a day and on tictoc on twitter powered by 2700 journalists in 120 countries. alix: thank you. an update on the space travel today. the worst actually for a falcon nine relenting from spacex the token nine booster did land, following the spacex launch of satellites from california that

separated in space and landed under very difficult whether conditions. it has been successful. david: general motors announced second-quarter earnings and hour or so ago, showing record returns from china and its financing business but took its guidance for the rest of the year down. chuck stephens. great to have you here. let's start with second quarter earnings. you did well. earnings per share. what happened in china? how much of that was because of a marketplace? how much was because of your cost controls and internal management? look at the overall results and you said it, solid results at the enterprise level with $3.2 billion in profit and eight .7% margins led by gmf and gm china.

we also face some fairly significant headwinds in the some of macro driven that manifested themselves in north america and south america. in north america it was , southed escalation america was a devaluation in the brazilian and argentinian currencies, both macro factors. as we think about the quarter overall, strong results, more challenging market environment, and our execution remains strong. the new truck launch is on schedule. we are shipping to dealers, selling the first trucks to customers next month. our crossover lineup has been doing well from a market perspective. our luxury share of the cadillac continues to grow. our next continues to improve. we are encouraged. these macro factors are something that way down q2 and

their view on the rest of the calendar year. david: exactly. let's talk about your view on the rest of the calendar year. down because of the macro factors. is that steel and aluminum principally? aren't those driven by the tariffs that have been put in? to say isam going they are driven by market forces. when you look at our revision to guidance for the year, big picture we are seeing a billion dollars of unmitigated headwinds for the balance for the year. some came in q2. we expected to continue. half of that come our commodity that, are-- half of commodity increases. it goes across a number of commodities.

as well as oil-based commodities, copper, diesel prices. largely driven by market forces and being much greater than we expected as we ended the year. that it wasew prudent to recalibrate expectations for earnings this year. david: general motors has been with the government with concerns of 232 actions against auto imports from europe , which is front and center but the president today. how is general motors expressing that idea besides filings? are you being listened to in the white house? >> if you look at the impairment today there is a lot of , a lot of ongoing engagement on trade across a number of dimensions, china or the eu or nafta. we are long-standing view that we support free trade. we have been actively engaged on many dimensions with the

government, as these potential policies are being formulated, and will continue to be engaged. ultimately what we want is a strong and vibrant u.s. and global industry. we think it is in the best interest of all parties to reach an agreement that continues to facilitate that. that drives jobs and growth. that is how we are engaging with the government. a lot of moving pieces right now, as you can imagine. we will continue to stay engaged. david: you mentioned china and nafta, as well as europe. viewu look at the point of of the chief financial officer china, northtors, america or europe? >> i'm not going to get into the specifics. it is too early. there is too much uncertainty around this. i would go back to my initial view. we support free and balanced

trade. we support the ability to manage our business on a global basis. typically our strategy, build where you sell. our footprint would mitigate these exposures but it is early days. we want to continue to be engaged so we end up with an outcome that supports a strong industry and strong fundamentals on a go forward basis. david: one of the things that has happened is the lift investment from softbank. take us through how that is showing up in your income statement? how does that affect profitability? >> the investment in softbank, that was an important investment it demonstrates the importance of a third-party investor. initial investment is $900 million. when we reached the critical milestone of being able to deploy commercially there'll be

another $3.5 billion investment from softbank. from engineering into commercialization on a go forward basis the 900 million softbank put in was -- we contributed 1.1 billion. crews actually has two point $2 billion of funding. -- $2.2 billion of funding. we view that as a landmark transaction that demonstrates where we are as a service and the opportunity that presents. we are excited when we think about that. david: when you announce that deal saying you would go to commercial, are you still on that time track? >> we have not changed our view on our objectives to deploy in a rideshare network in 2019. david: there have been some other transitions per you will transition out of your position

after many years. it has been a privilege and pleasure to work with you. thank you for your time. chuck stephens from detroit. chrysler, outt with earnings as well. disappointing sales in china taking a toll on their second-quarter results. after the tragic death this morning of sergio marchionne, monitoring the conference call. >> the first five minutes was a somber tone. they talked about sergio marchionne. they were reading out letters and notes from analysts and journalists that had written in an expressed their concern. they did take a moment of silence as well on the call. this has set the tone to be more of a somber tone, remembering

sergio marchionne. we start to get into the capital markets update for we talked about those numbers and the struggle in china. has said theonne second quarter was going to be difficult. didid say did that -- that prove to be the case. they ended in a net cash position and improved with second-quarter profits. cherokee regained but otherwise a struggle in china. that has been a focus for them. i will keep listening for the numbers but i will reiterate the first five

taylor riggs. we have heard warnings from ceos , tears could affect our business but for carmakers it could be more immediate. the savings they got to tax reform, versus the orange bars which take a look at the hit of steel and aluminum tariffs. wiping out any gains they got from tax cut. joining us now, franklin templeton multi-asset solutions. great to see you. tariffswith these erased a growth benefit from tax cut's? s? tax cut >> that statistic highlights it. in your interview with chuck, the steel and aluminum tariffs are impacting business. it is probably the business being most affected. in his responses, there are other pressures. started with a tailwind because of tax guts but we also had strong global gdp growth. that synchronous averment we were seeing around the world drove up the other pressures he is siding -- citing.

we go is probably the biggest story. we know today in most industries earnings are coming in fabulously. maybe the bigger story is how well companies have managed operating profits. that is something you don't have to go to far, when profits for under pressure. everyone was calling it the profit recession. clearly we have moved past that and profits are sustaining an attractive level of earnings. the level of confidence is what we are hearing, going forward with confidence can companies have? alix: client prices go up. we hope that is associated with demand increase which will offset it. is that happening? an increase in demand that would make up for increased cost? >> in certain areas we are.

the auto industry is extremely competitive. there are challenges in that business as we're seeing with the chrysler. real challenges in that business. the path we are seeing in the global economy is less robust than 3-6 months ago that we have important significant pockets growth in the u.s. economy. alix: we saw a brisk on rotation in the markets somewhat. two-yearaw a solid demand auction despite the fact there was $1 billion more supply coming online. how do you explain that? what's we're seeing a little bit of everything -- >> we are seeing a little bit of everything. clearly the emerging markets

moore under pressure. there are pockets where investors should be looking because there is more resilience than i think the initial reaction, which caused some selling off there. with fixed income, we have taken some profits out of equities that have performed well. we think 2-5 years space within givenries is interesting the potential for more volatility and uncertainty in terms of where we are going fundamentally. david: where'd you go for duration? investment grade, are you high on investment grade? been light on investment grade corporate. that is among the longest duration fixed income out there. it has also underperformed substantially. relative to high-yield, relative , alower rated high-yield divergence of performance.

with the move higher in rates will yesterday to see the 10 year move up again. that widening spread that has occurred because of the substantial supply, we think there is some opportunity. we are being short in our approach to duration in that asset class, but we think you can look for pockets of opportunity in ig. alix: staying on the two-year, do you see a steeper curve question mark what i don't think we have a ton of conviction either way on where we are in terms of going forward. we don't think it in würzburg we think the 10 year has a chance of challenging the highs that we saw 10 weeks ago. alix: is any of that dependent on a fed that doesn't hike this year and next year? >> it is going to be increasingly determined by what impact we see with trade

tariffs. david: where are you on inflation? is that symmetric or asymmetric? >> inflation is -- more symmetric. inflation momentum, if that were to spike it becomes asymmetric. markets wrist -- markets risk assets will have a difficult time. coming up more of our exclusive interview with christian sewing, deutsche bank bloomberg. is ♪

>> this is bloomberg daybreak. sales that beat estimates. the company reported a cost

overrun as it delivers to the u.s. air force. boeing to generate $4.2 billion in free cash flow, twice what analysts expected. united parcel service has run into problems, it's crucial domestic package business is costing more. profit and sales came in better than expected. coca-cola is getting a boost from its healthier drinks. salesosted second-quarter that beat estimates. the company has increased cost cutting efforts. david: thank you. deutsche bank reported earnings showing continued decline in revenue and income with fixed income hit hard. down 17%. interview, how

rates could affect plans to revise deutsche bank. >> this focuses now on the next 18 months. we have set ourselves clear goals for 2018 and 2019. we want to have a return on equity of 4% at the end of 2019. that does not depend on a rates increase. we have to plan what we can actually interest us. of course it would be nice for a rate increase. that is not in my hands. driver not an underlying for the next 18 months. this is not part of the plan over the next 18 months. >> you came in at a perfect time if you look at it from a rates perspective. ed and weo have trough

are ready to decline. ,> i expect the rate increase it is hard to say for me. i think it is necessary to have that in europe but it is hard to predict the timing. alix: an exclusive interview with matt miller, 38 basis .oints is what we yield now rate increases pivotal for banks as well for the debt market. if you come in the bloomberg, this is the performance versus u.s. financial bonds, the same with the equity market with the bond market. the underperformance of the financial market, in light of the ecb meeting tomorrow. perks -- eds is add perks. if you like select bonds, in the u.s. or europe?

>> we prefer them in the u.s. from the time when rates bottomed in the u.s. and the path we are on, ahead of where the eurozone is. some of the headwinds that are market has faced or whether it, some of that back up, when the -- when you level on the uncertainty on corporate tradeentals, where tariffs are taking us, i think it could be more impactful as far as the european economy then the u.s. we are preferential to the higher yields as well in the u.s. and better fundamental outlook. alix: some say the outperformance of the market has been a supply issue, as there is not as much supply. do you feel like it is the case

or is it not a lot of default, let's take on some more risk. >> they take their cue from economic fundamentals. we continue to have access to capital. issuance is down year to date. the last several years has been phenomenal. i think that has driven a lot of performance. today, we are lower rated high-yield bonds. .alue is starting to shift back investors have the opportunity to move into higher credit quality in the corporate bond market and see some better yields. david: they have access to capital and they use it. theyou concerned about

degree of leverage? people chase for it. >> we are concerned about that. when we are talking about high-yield bonds or leverage, there has been supply, we are being very selective. we are focused on in the unique company. alix: what about over in europe as you have the ecb pulling back on corporate bond buying. you have issuances stymieing that as well. is there an opportunity? >> there could be in the short run. it is something we haven't been tremendously focused on. i could see that playing out as well. perks, stick with us.

we struggled -- we should talk about fiat chrysler. a lot of what he is sing about china, being one of the big jeep, they need to the outlook looks cloudy. david: he was assigned the job of taking jeep forward and making a dominant. he would know that better than anyone else. we will speak with david of georgia, the former ceo live from new york. this is bloomberg. ♪

alix: this is bloomberg daybreak. i'm alix steel. mark and earnings helping the s&p and dow rollover. down.tures typically it is the other

conversation. that is helping the indices. today it is the opposite story. classes com, com , com. eurosterling flat on the day despite the fact theresa may is in charge of brexit. she has enough jobs on her plate. after three days of intense steepening, crude flat on the day. part of the earnings story, you have fiat down off by the. the negative. president the day trump is going to meet with the jean-claude juncker. the interesting thing is not so much what happened in the second

quarter, it is what is going forward. alix: and they have real numbers. you don't just have saying -- you don't just have jamie dimon saying trade is bad. david: down a billion dollars in cash flow because of the effects from commodities. we will keep watching. emma is here with first word news. >> jean-claude juncker will try to head off a trade war. he was to pursue the president not to use tariffs. he says he doubts the eu will go along with that. spacex launched satellites for 80 long time customer. the rocket lifted off from the central california coast. this is the 14th mission of the

year for the company run by elon musk. in pakistan national elections have turned deadly. the that will determine the course of a nation central to anti-terror efforts and china's global infrastructure ambitions. that likely means negotiations will form a coalition government. global news on air and on tictoc on twitter powered by 2700 journalists and analysts in 120 countries. this is bloomberg. alld: last year it was about tax cut's. this year it is all about trade. the prospect of retaliation could take some of the benefits with concerns about the effects on farmers, something the president tweeted about this morning saying china is targeting our farmers who they know i love and respect, to

allow them to take advantage of the united states. they are being vicious and will be there failed attempt to we were being nice until now. bloomberg senator , the former ceo of reebok and dollar general very great to have you back with us. >> good morning. david: you were one of the staunchest supporters of tax cut spread are you concerned all of this trade tension, trade talk tariffs could take tax some of those benefits for ceos like you used to be? what/year as you called out on your show we worked on energy taxes this year. we got a dodd-frank bill. this year he wanted to work on infrastructure, immigration and trade. i am not a big fan of using

tariffs to get people to the table. we have south korea now who has come back from the table. a differentnt has style. nato is doubling their commitment. we are close to a deal on nafta. i'm concerned tariffs pick winners and losers. rest assured one thing for a president trump has one mission, to create a more level langfield for the united states. >> there is a proposal being put in aid. for $12 billion some of your fellow public and senators came out strongly against that. he said my thoughts are the thoughts of farmers that want trade, not a. it is just that simple. do you agree with that? stateust did a tour of my with the secretary of agriculture area they are being targeted by china specifically.

the message i heard overwhelmingly in my state is they are interested in more experts -- exports. the fact that right now these farmers are committed to the long-term getting the access right now, so many examples where other countries get access to our market, and we don't have access to there is. we are moving into that stage where we need to move into specific conversations with other countries about the access. david: are we making progress. you were a pragmatist. it simply you had to change her mind or he does there come a point where -- as a ceo you had to change your mind. our president is a pragmatist as well. he has to maturity he is willing to go a different direction. that is what business is.

upwashington it is not set that way. it is frustrating for president trump. the president said he wanted to let nafta. we have a much more level playing field. i believe right now we are in the phase with china and other countries where we can move into specific conversations about where we don't get equal access. david: that is twice were you have said we are close on nafta. some insight into the discussions that would give you confidence? there is talk of an end of august deadline. >> vimeo lowly senator. i am not in the free trade agreement. every time i talk to the president, he talks about it.

we are close to a deal. i think we are dealing in good faith. i think our partners are dealing in good faith. canada in aco and solid trade agreement. the president knows that. alix: george it is interesting. particularly atlanta. it has somebody headquarters like home depot. if those ceos call you up and say look, how are my supposed to plan my business over the next 18 months when the tariffs trade wars are in such jeopardy? what do you tell them? >> this is the number one problem we had in the obama administration. when we were overregulated that tied up $2 trillion in capital. one thing you have to have as a ceo is certainty looking forward to forecast your plan. we have seen in the earnings

reports increases, dramatic increases. now we are hearing uncertainty about that and that is disturbing as a ceo. people are now looking at exports in a different light under this president. now we see an opportunity to grow exports. if we are going to continue to grow like we are doing. we have to grow our exports long-term. ared: on the question, we seeing softening. if you were a ceo today when you pull back a little bit until you know what is going on with trade? >> it is about tariffs. tariffs create winners and losers. if you are in steel you are investing every dime you can borrow and raise. if you are in the auto industry you might have a different look. there's a lot of capital looking to be employed. a lot of great projects.

we need certainty in terms of trade and access issue. i think the president knows that. this is an uncertain time. we have dealt with this for 40 years. poverty whilebal our poverty rate has not moved one iota. this president is trying to get through this toy point where we do have it lacks says and a level playing field. toit is always a privilege have you with us. that is david purdue from georgia. here, weader earnings come out today as auto earnings are taking a hit. next year the uncertainty, if you bring in this chart, earnings expectation versus the price change of those sectors. still with me, franklin templeton, if the earnings are

for those exposed to trade. at what he seemed to reflect that. how do you deal with sectors right now why should mark -- right now? on that and position portfolios that way. one thing we have seen in our portfolios after underperformance earlier in the year when the story was about global synchronous growth, something like electric utilities underperformed. sentiment was bad. they have had a nice recovery from that level. tremendous dividend yield. similarly in high yields, one of the areas that we have found some opportunity is in health care, hospitals in particular. tenet health care is isolated from the conversation we are having impacting markets today. we can look at costs a are's.

trade and tariffs, winners and losers. taking that active management approach is something that makes sense is forward market element. thank you for being here. going to talk to catherine baker of the university of chicago for the third part of our health care series. today we focus on insurance. this is bloomberg. ♪

>> this is bloomberg daybreak. coming up on bloomberg markets, the ups ceo will talk about his earnings report.

to your bloomberg business flash, shares of alternative energy company bloom will begin trading today. they raised to an or million dollars in its ipo. the market value of $1.6 billion. by -- pany is backed captures trying to young viewers that have fled mtv and nickelodeon. awesomeness is owned by comcast, verizon and hers. -- hearst. the trump administration has resolved an issue that threatens to undermine obamacare and wrist raising premiums. the ruble allow the resumption of billions of dollars in payments to health insurance. they had been halted by a judge ruling. we will continue on that

theme of health care. health care is biggest names are out with results this week. we heard from anthem and close .ut the week with merck we are looking at the biggest issues in health care, focusing on instruments. -- insurance. navigatere having to complicated plans. joining us now, catherine baker. here with us in new york is jeff smith through. give us the lay of the land when it comes to insurance. how many people rely on medicare and medicaid. >> the vast majority of private insurance have insurance through

their employers. there is a small but growing nongroup market through health insurance exchanges or individual plans they find through brokers. over age 65, or on medicaid for the disabled door some people who are both over -- for the poor or disabled over aged 65, and in one of those categories, health care dollars are people on medicare. >> the growth of that health insurance exchange is almost all attributable to obamacare or the aca. most of that is because of subsidies. the people buying insurance are

doing so because they get government dollars to help them by the insurance. most would not be able to afford it. david: is the trump administration eliminating that? >> some go directly to individuals. congress would have to act to change those. there are some implicit subsidies taking away the highest risk enrollees ensuring the insurers the government lowers the premium people have to pay because it is taking the risk away. those risk adjustment payments are what is the subject of a lot of core debate these days. alix: taking in that mac review of where we are in health care, what does that mean if you are a health care company? >> for consumers, those who are eligible for premium tax credits for subsidies, health insurance is relatively affordable. the eight-10,000,004 not

eligible for subsidies they are finding obamacare plans unaffordable and that is opening up alternative plans, alternate plans, short-term medical plans, other types of solutions. alix: talk about those opportunities. >> you're going to see with health care.com, we help consumers shop. we help them find alternative lance. you are seeing new companies commented that space. how to help consumers. we are living in a gig economy. what is so wrong about the insurance, new companies are creating those solutions. david: one of the things jeff is doing is trying to sort this. why is it so complicated?

the different types of plants across the country, why isn't there more uniformity? healthng innovative insurance plans is just isn't worth as having innovative just asare -- is important as having innovative health care. we need creative ways to design health insurance plans that foster high-value health care and stem the use of expensive care. you're going to get insurance is that have different copayment structures, different sub versus -- different services covered. drivewhat is when to rices down and innovation and delivery. having a more rich insurance market to choose from, having someone help fund the product that is right for you, letting

you choose the insurance giving you the highest bang for your health improvements would help the system function better. avid: you are talking from consumer point of view. the employer cost is increasing causing employers to take different steps. what might those be? >> employers are looking at creating more rewards for consumers. different types of things to bring down the overall systemic cost of health care. you are seeing bipartisan effort of congress a few years ago to qualified -- in that allow small employer is more creativity and flexibility creating unique plans, mix-and-match plans for their dismissive or use. you are seeing a lot of it and chaos is -- you are seeing a lot of movement. movement and chaos didn't fit

anyone well. you are going to see more new companies creating these flexible alternatives. alix: thank you both. health care.com cofounder, thank you. david: fiat chrysler reported earnings this morning but the death of sergio marchionne has cost -- cast a long shadow over the business. the new chief executive addresses past -- his passing. talking to surge you almost a daily basis, this morning news is heartbreaking. it will be heart for many other people. there is no doubt he was a special community man. he is going to be sorely missed. the passing is the big

story for them but moving beyond that, what did we learn about afterdismissal? >> honoring sergio and taking a moment of silence, they did say the second quarter was going to be tough. that was the case they said. some of the positives were net cash positions, relative to the first quarter. wrangler in cherokee are starting to regain leadership in brazil. headlines, saying china does continue to be there -- continue toge be their biggest challenge this year. top in particular needs speed up their position in china. asia-pacific region only makes up the percent of sales. china still a focus. spending.ower

that is down from eight to eight and a half billion dollars. they are confirming their to getar plan, referring some net income. thank you so much. hot.re watching the that company did a room or after the bell expecting to post record revenue despite turmoil from the cambridge analytical scandal. yourng us is michael pack -- joining us is michael. hasn't outperform rating. what are you watching for? there is goingk to be major surprises worried facebook is a business. it presents alternatives. if you want to reach consumers that is the place you have to

go. if you want to connect with your family or friends that is where you want to go. enough about talk is instagram, growing like crazy. dollars forbillion this thing. it is growing so fast. it is a multiple of the size of snapchat. it is used far more frequently. i don't see this slowing anytime soon. what do you expect next question mark >> better targeted advertising. because it started out as pictures that turned into posts, instagram is a video and photo platform. i think you're going to see more rich video ads commoditized better. alix: the stock closed around a

record. what is going to be the next catalyst? >> slow and steady. what is the catalyst for amazon. they are blocking and tackling what we expect them to do. each stock has appreciated amazingly. facebook does the same thing. for the business there is no alternative. if you are looking for growth these are as certain things you can find. i am not a fan of netflix on valuation facebook is going to keep growing. google is going to keep growing. there is a reason those stocks are grouped together. they are unique in their niche. they have held off all competition. google plus is not going to replace facebook.

i don't think that is going to happen for several more years. david: great to catch up with you. alix: those earnings coming up after the closing bell. what a morning. earnings are amazing. equities moving higher. david: and we launched a satellite. alix: that happened as well. bloomberg dake america. dollar couldy the go higher this year. and equity markets based on earnings, dow jones futures. this is bloomberg. ♪

jon: from new york city from our viewers worldwide, i am jonathan ferro. this is the countdown to the open. ♪

jon: coming up, president trump a meeting for dropping all ariffs and subsidies. fixed incomebank trading recording the weakest second quarter since the financial crisis. downes a touch of softer, just over two point on the s&p 500. euro-dollar stays around 117. a touch of weakness against the u.s. dollar. 10-year yield coming just a basis points to 2.94. the u.s. president with tough boards for the eu ahead of today's talks. pres. trump: they sound nice but they are rough. they are all coming in to see me tomorrow. i said, youcoming,