the 2018 elections compared to the 2016 election. -- he just reporters in the white house briefing in efforts for future foreign and outside interference in future elections. >> our democracy it self is in the cross hairs. free and fair elections are the cornerstone of our democracy and it has become clear they are the to -- of adversaries seek to sow discord. >> even as we speak, open the spanning fbience field offices across the country. make no mistake. the scope of the threat is broad and deep. collect the national security adviser said president trump is leading unprecedented action to punish russia for efforts to

disrupt american elections. prosecutors in the trial of paul manafort are asking the judge for greater leeway in present evidence of manafort's personal managers. the judge scolded prosecutors yesterday for relying on photos of the fence of drugs and clothes and noted that it is not a crime to be wealthy. today, prosecutors made their arguments to the judge, saying that their evidence is directly relevant to the case. the trump administration wants to roll back obama era rules on auto fuel economy standards. it recommends freezing federal charges that 37 miles per gallon starting in 2020. risebama era rules call to 50 miles per gallon by the year 2025. the trump administration also wants to unwind california's authority to limit tailpipe emissions in the state. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg.

♪ >> live, i am julie hyman. scarlet: i am scarlet fu. >> tech is leading the gains nasdaq rising for its third straight day while exporters of -- way on the dow. joe: the question is what did you miss? >> apple becomes the first u.s. company to reach the $1 trillion mark, beating out tech competitors, amazon, microsoft, and alphabet. tapping the brakes on the fuel economy. trump administration unveils plans put in place. a cloud of sexual misconduct

hangs over cvs. our report may have a second story on the media company that is set to report quarterly results after the bell today. iphone maker the has just become the first u.s. company with a market cap over $1 trillion. apple crossed the threshold this morning when the stock crossed just over $207 per share. joining us with more in san francisco is mark. you -- i think there is an exact number needed to get above. i have to admit a little skepticism on over $1 trillion. what it does encapsulate is the importance and really how revolutionary this company has in not just here in the u.s., but around the world. >> yes. you are absolutely right that

this is a historical markerbut . >> yes. more than anything. it is easy to forget now that seven years ago, people were saying, will apple really be able to survive in a post steve jobs world? this was a person known as perhaps the greatest inventor of our time. certainly over the last 100 or 200 years. the mac,e, the ipad, they are synonymous with modern technology. how many people do you see on the street of new york and san francisco -- it has become everything to some any people. that $1 trillion marker represents really more than anything. >> i'm glad you bring up steve jobs. thecook is no towing a supply chainas genius. he is not necessarily the visionary at the company. when steve jobs was in charge, he came up with the next they hit. a supply chain genius. what is the process for apple to come up with a next big hit as it barrels toward in next milestone? >> a great question. tim cook is the face of apple. he runs the ship at the high-end.

he is the global representative for the company and he put into place all of these supply chain groomers really the way apple comes to develop products as they have a new product of open process, they call it sort of a handbook, bloomberg way but for apple. executives,team of jeff williams taking on leadership, whether for the apple watch, iphones, and the hed of marketing for apple, is just not the guy who comes up with advertisements. he manages new products. what features they have and what they do. he runs the software ship that apple, very core to the company. johnny puts his stamp of influence on the overall look and feel sort of in a way that steve jobs did when he was creating the iphone, ipad, and

the imac. collectively with tim cook at the head of the ship, the center of the wheel, that is how they get things done these days. >> the same day that apple reported earnings that helped send the stock to a benchmark level, we got the news that -- had passed apple in the volume of smart phone sales are there different categories with her spec to things like average selling price and so forth. do you perceive there to be any weakening or frailty in the apple ecosystem? the ecosystem, no. i think it is getting stronger than ever. i think it has become airtight at this point. how many people do you really know have an iphone that switch a way to android or other google phones or samsung? you go through the system and appleto it here at what

has done his turn the iphone gradually into a hub where they can tell you a bunch of it to shuttle stop on top of it. let's say you upgrade your iphone every two or three years but every two or three weeks, you arecan tell you a bunch of o ryan app and downloading a new service and using these things every two or three minutes. so they really got you with the iphone and you will buy other products around it. glasses,nted reality whatever comes next. they are banking on people updating these phones every two or three years. they now have the descriptive -- subscription program or upgrade program that i do not think people are talking about enough. it will really be a key ryan apr long-term. >> it is well and good for those of us who are trapped in the ecosystem, one could argue. what about new customers? especially in places like china. has apple been at getting those customers? do we have a way to measure that?

>> a good question. measuring away from android, the premier global operative system for smart owns and all sorts of other things and we have seen ipad sales sliding a bit in recent quarters. i saw her rent is mac numbers would say this quarter. that is not getting a lot of attention. 3.7 2 million units in the third number ofhe lowest mac sales since 2010. that is a year before tim cook became ceo. numberthe iphone at the time ws happened was the iphone 4. that was so many years ago. the mac used to be a key driver of getting people into the ecosystem. i think the air pods and the apple watch are the secret formulas to getting more people in the ecosystem. they are cool products, wireless, everyone is talking about them now, and though they do not sell tens of millions, you need an iphone to work at them. maybe those are drivers. >> yes. that is the key. said we areay you trapped in the ecosystem. one area of growth is my kids

and your kids will get iphones. >> right. is it sort of a family thing where if the parents are already apple users, then -- dissident register sit -- dissent question mark i've always upgraded my iphone but as long as i can get gmail, work mail, and my spot if i'm songs on the android, i do not feel locked in. i do not feel he can would be that hard. >> your family also has iphones. >> but i could call them -- i just don't feel like i am trapped. >> i think you are deluding yourself to >> i might be. that is fair. >> coming up, fuel-efficient least -- efficiency standards are set to grantor hauled a halt in 2020. reacting to the 20 -- the trump administration's latest rollbacks. this is bloomberg. ♪

>> more rollbacks of obama era regulations. efficiency standards and easing requirements at 2020 levels. taking through the rules of what comes next and auto companies, we are joined by ryan who covers autoregulation in washington, and the u.s. autos regular in detroit. this proposal has been released. you now have a 60 day time of public, before anything goes into effect. there is room for negotiation. do you think the white house will get the rollbacks it is proposing or will it be water down a bit? >> i think a lot of people expect some things to change. the proposalnt of is that it would strip away a lot of the so-called flexibilities, technical elements of regulations that help carmakers comply with

steady increases in efficiency requirements with very unsteady product cadences. the industry will probably push very hard to entertain some of those. there will be negotiations here. the currentus are trajectories of regulations and relief would these regulations, if they going to place, would they be for u.s. automaker is? they are significant. fuel economy requirements for especially the more profitable popular category, get significantly more difficult after 2020. it definitely creates a huge cost savings for automakers, which is why a lot of them were asking for the relief. it also puts them on a bit of a will track with a can make heavier and less fuel-efficient vehicles for north america to

make money in the u.s. while they still have to develop electric cars and smaller vehicles for china and other markets. heavier cars.oned how much of the game of improving fuel efficiency is just making the cars later verses more efficient energy issues systems? you see the automakers really attacking it from both ways are we are seeing a lot in the powertrain where we are seeing more vehicles with smaller turbochargers, and units like that to try and get more power out of less fuel, but at the same time, a lot of it, you saw ford spend a lot of to come up with aluminum f1 50 to try and get much more efficient. it has other benefits but mostly just puts less strain on the engine by having a lighter.". >> i do not want to lose sight of the goal of the regulations, which is not just fuel efficiency, but lower emissions. is not part of all of this?

so do we have any kinds of estimates as to what kind of difference that will be in admissions, what kind of climate affect this could have depending on which way goes? >> one key part of the administration's proposal that came out today was that they found that, under the newer, flatlining thes, standards after 2020 would have, in their eyes, a negligible impact on the climate. part of the rationale is a lot of gains have already been made. deathandards first of took effect in 2012 and are rising steadily. once you get vehicles to a higher mile or gallon limit, the actual amount of fuel you are saving when you go to 35 miles per gallon is a lot less than what you save going from 15-20 miles per gallon. >> though to be fair, this is also an administration the

questions man-made climate change at all. that is just full disclosure. >> exactly. >> let me come to you because when it comes to california and its authority to set more stringent -- stringent rules, how do california's rules and what standard compared to standards outside of the u.s.? say, in china, where there'll -- there are putting a lot more on cleaner air and lowering greenhouse gas emissions, or europe, where they are a lot more firm on this then perhaps the trump administration is? requirement to have zero emissions is a small percentage but it is a growing percentage over time of what they called zero emission vehicles, mostly electric cars with a few exceptions. that is much more in line with what we seeing in china and europe especially eager cities in western europe. it has been a struggle for the auto industry. they still tend to lose money on

electric vehicles but can see that is where the market is going and there is a very real concern about getting blinded by suv's, pickups, and not being ready and not having the costs down to compete globally. china is already twice as big a market as the u.s. gm sells more vehicles in china than they do in the united states. so it is very important that they be able to compete there. when the home market does not require the tech algae, maybe you're just not that interested in investing $1 billion or $2 billion to be globally competitive. >> all right. thank you. jamie is based in detroit to our u.s. autos editor and our regulation reporter joining us in washington. her -- they have are grouped all of their losses since they were targeted on tuesday can this is the stock of

the hour and i wanted to focus on the income factor because i interviewed the short cop -- the short seller on tuesday when he first came out with a short thesis. among other things, he talked about the company misrepresenting utilization rates and china. i will back up. it is based in china and trades here in the united dates. the company rents out data center space to other companies. he wasit is based in china and s here in the saying we were misrepresenting utilization rates, among other allegations, he also said some of the deals the company had done had insiders on both sides had inflated the value of it. the stock of the company has been rebounded in the last couple of days and recouped almost all of the losses, though not quite all of them, and the company coming out and saying the allegations are false and the conclusions are incorrect and premises reflect a misunderstanding of the operation, it has been defended

by various endless -- analysts who are positive on the company. so it has been interesting to see the rebound we have seen. someone also did a deal with the so it has been interesting to see the rebound we have seen. of that company came out today and defended the company as well. joe: it always feels a public short announcements, you can of that company came out today and defended the company as well. get top down, but it really takes a while and they do not necessarily last until the data really comes out and backs of the thesis or until people discover something. not totally surprised they are partially bouncing back until there is more evidence one way or another. >> that is an interesting thing about this. it is one of the companies making investments. holder, some of the defenders have come out and ,,id, this is a mobile company

thickens day in the back or industry. >> potentially, yes. , thickens day in the back or industry. >> potentially, yes. when you have that back are coming off as a question, if the stock is, thickens day in the back or industry. >> potentially, yes. when you have that back are coming off as a question, if the stock is going down, will the increased their investment? that also potentially limits the short thesis. i just

>> what did you miss? a muted ipo. started trading on the nasdaq today, while shares are up 20% from the ipo price, they mostly stayed within -- >> it is not so muted anymore p rich shares are down above the market. and it ate, they are trading at 2017, 19 was the top end. reportergo to a tech in san francisco. tell about the trading pattern day.s first >> chile has a point. they are up and pushed through the market range. as we get closer to the close but it probably comes from the pricing itself. they still -- sold their stock for $15 per share. well above what they put out there for investors. i spoke to the ceo this morning. he said because of the broader tech selloff, i wasn't quite buying it. i pushed him a little bit and he had more to say. take a listen. >> the whole thing was about educating investors in terms of the model.

quick reaction is always, these great-looking and great sounding speakers, so they are hardware company. we had to spend a lot of time to help investors understand we are a totally different type of company that builds products that last a long time and people will come back and buy more of those. pushingu here, he is that this is not just the hardware but the software. that is the key. companys look at the and have questions or will this be another gopro or another fit bit, which we have seen fall more than 65% since each company listed. company and havejoe: i own one and i hae honest. i do not know why because it just seems like a speaker. >> l of mine. joe: what does the company say what is the overall strategy for why this will be durable? >> joe, what you are describing is what they would say is the first for their business. what is the overall strategy for why this willthe product is.

you own it and bring it into your house. what they are pushing now in terms of a growth story is the idea that the rise and streaming music and the increase voice activated speakers will push people to listen to things more than just on their phones. the normal television or movie watching into the home, and you have a seamless platform. that is where they are saying growth is coming from. at theow, if you look market share, it only has round 2% of the wireless speaker market here they will argue there are higher end than what is out there, but they have a contenders fighting for shares. >> let's talk about big contenders. has sown us, and not just one, in our home. but obviously, amazon would be a big player out there with the various alexa products. it sort of name competitors and talk about why it might be a

viable competitor over the long run? >> amazon is tricky. i asked patrick about it earlier. they are a friend and a foe in a sense. the alexa platform is the main voice-activated platform on the system now. they're looking to integrate google later in the year. but amazon is selling its own speakers. -- isgument for sown us to continually add speakers in the rooms, that will draw people into what they have to offer. they will say some of the speakers from the competitors like the ones you named, amazon google, that they are lower quality and for folks who just want alexa and do not necessarily need the whole experience. they will also say in your home, you might have something on the different in the living room, then your kid has in their room. that is a differentiating point. >> chile enough. thank you very much. we have got the market close coming up next pair looking at

major averages, less than four minutes to the close, another diversions with the dow and the nasdaq. cbs reporting second-quarter results, not just earnings. that will be the focus here. ♪

[applause] julie: "what'd you miss?"

stocks mixed. the nasdaq is the big winner and apple is holding its gains and closing the session. i'm julie hyman. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. if you are live on twitter, locum to the closing bell coverage every weekday from 4 p.m. to 5 p.m. eastern. belllcome to the closing coverage every weekday from 4 p.m. to 5 p.m. eastern. scarlet: we're looking at this split which has become increasingly common between the dow and nasdaq. the nasdaq is the out performer and the dow is flat on the day. we julie: saw some of the industrial stocks weigh on that index. apple got attention as the market cap swelled to $1 trillion. that stock rose above 206.04. to mark earlier about the milestone for apple and how it shows how important and how

successful apple has been in the quest to change our lives. scarlet: and it is cool to have before, is now. julie: scarlet is all about the four, club -- four comma club. the worstr is performer in the s&p 500 with 11% decline after the company came out with numbers in it's not hotels business. it looks like it missed estimates to some extent. expectations had been riding high into those numbers as well. numbersorts out with that missed estimates by a pretty wide margin if you look at the revenue and earnings here. casino stocks generally have not been performing well on earnings. we have industries. here is an agricultural condor street -- agricultural company.

fertilizeres makes and their earnings are beating the highest estimates. it says it expects a tightening nitrogen supply and demand balance. finally, clorox bucking some of the downtrend we have seen. that company is coming out with some of its numbers to beat estimates as well. it depends on where you look at the numbers. the forecast for continuing operations and midpoint that is beating estimates. that is helping those shares. joe: let's take a look at the government bond market. lots of down arrows. pretty substantial risk and we have buying of government bonds. the 10 year yield is down to 2.98. we had a hike from the bank of england that was expected. some people a little on the hawkish side. nonetheless, it was basically all priced in.

japan, we have to update it because it is so volatile lately. the boj is back in the market. scarlet: and it is tolerating more moves in the yield. let's look at the dollar. firm or for a third day. joe mentioned boe and how it raised interest rates by three basis points. the highest since 2009. you see the british pound's reaction. it declined nonetheless. pound on howt the it has performed, it is down 3.6% in 2018. from its high of one dollar 43 in april, it has lost 9% of its value. -- $1.43 in april, it has lost 9% of its value. china is ready to retaliate against the latest u.s. terror threats. by a raises interest rates certain amount of interest

points. the yen has performed worse in the last few months or so. did not raise interest rates. it is a weekday for the peso and the rand is posting its first drop in weeks. joe: finally, commodities. a nice bounce back in oil. there are green arrows on the board. gold is selling off a little bit. day ons having a good ukrainian exports. we have to watch those ukrainian wheat numbers. those are today's market minutes. awaitingwe are second-quarter results from cbs any moment now. let's bring in paul sweeney, and, paul, the reason we await them is not because the second-quarter results will be telling one way or another, it is about what happens to the chief executive.

his fate is so tied to the company. paul: it really is. he is facing workplace allegations and it is a huge issue for cbs. when you think of cbs, you think of les moonves, and vice versa. he really is critical to not only the strategy of the company that also the day-to-day operations. scarlet: cbs just reported. $1.12 which is a penny higher than what analysts anticipated. threee for the quarter is $.47 billion. a touch higher than the billion. of $3.46 second-quarter entertainment billion.as $2.37 that was in line with what analysts are to survey to -- that is in line with what analysts anticipated. julie: here's les moonves in a

statement making comments and giving us a number of different metrics. he says the company is performing well and he says each of our three revenue types enjoyed a solid growth. he said subscription fees led growth. we continue to see healthy gains in digital platforms. he is also talking about subscriber growth. their goal was a million subscribers by 2020. -- 8 million subscribers by 2020. he says we are on track to hit that number in 2019. advertising is up 2% for the quarter he says. the things he is trying to highlight to the statement and he is still there for right now. paul, they may be looking at his behavior, but for now, he is

running the company. paul: the board met initially a few days ago to discuss this issue in addition to taking a look at the earnings. at that time, i think the market was expected that they would put him on a temporary leave based on the outcome of the investigation. that did not happen. -- the leshe less the idea that maybe his position is stronger than anticipated given that he is going to be on the earnings call today. it appears to be a pretty strong sign that he feels like he is a good -- is in a good position. joe: could there be a situation -- could theres

be a downside of them saying? paul: there could be. that said, he is one of the strongest presidents in hollywood -- presence in harley would. he ceo -- in hollywood. at least at this stage, everything seems to be status quo and business as usual. we will see the tony put on a conference call today. there's a lot of noise about not just his legal issues potentially, but also the potential merger with viacom. and, what is his presence and absence due to potential for a deal. to potential for a deal. julie: just highlight what you said about his relationship with hollywood, stephen colbert on the show over the past week

praised him and said i have this relationship with him, he is the one who hired me, but he said i leave him accountability. people are talking about what happens to cbs if les moonves leaves hurried it seems like the board has a lot on their hands trying to figure out what is going on with les moonves and the merger with telecom -- viacom. moreems like the board is focused on what happens with cbs and i cam -- cbs and viacom rather than its ability to navigate this new environment. paul: that is potentially a very dangerous path for the board. would to think the board be focused on the change. if a company like walt disney thinks it is beginning to plan a

digital world, cbs and viacom -- scarlet: it looks at the mergers with viacom two. paul: exactly. i think the best -- joe: if moon best word to -- if les moonves were to leave, does that increase the chances of a merger? paul: i think so. i don't think he once to merge. i don't think he wants to take on the headache of viacom. and, the board members are supportive of him and if you were not there to keep the board in mind, potentially, i think sherry redstone and others would be much stronger. scarlet: do think the board decided not to make a decision on les moonves because letting them go would mean it would pave the way for the murder? paul: i help they did not do it that way.

i hope they did it stick leon merits here. there is a legal -- strictly on merits here. there is a legal issue in the board has to be careful about how they fulfill their duties over the next several months relating to les moonves and relating to national movement to viacom. julie: i want to run through some of the other earnings we got in the past few moment. activism is want of them -- one of them. revenue also a hair above estimates. it looks like the earnings-per-share forecast for the year is slightly below estimates. below what they estimated. they are also selling two more franchises to their live-action league.me

on the flipside, we had numbers from take two interactive and it looks like the shares are halted. they rose a bit and were halted pending news. as far as i can tell, the news is out and earnings are coming in above estimates. scarlet: more than slightly above estimates. analysts were looking for four cents. it ist comes to revenue, $280 million and analysts were looking for 258 million. there the outlook, adjusted revenue is right where anticipated. none of these companies have fortnight which is what everyone is on right now. -- fortnite which is what everyone is on right now. julie: gopro is doing well in the latest quarter. earnings eat -- beat estimates.

is 283 million dollars up 40% from the prior. -- prior period. estimates posted a loss of $.27 a share which was narrower than estimated. and ipo momentum stock for you was shake shack. that company had comparable betternd was a little than estimated. earnings-per-share was considerably better than estimated. for the full year, comparable sales will be zero to plus 1%. are down 6.7%. we will figure out what is going on. that is your earnings roundup for now. we talk more markets coming up next. this is bloomberg. ♪ this is bloomberg. ♪

mark: he senior turkish official is accusing president trump of jeopardizing the long-standing ties between turkey and at the united states by allowing sanctions on to turkish ministers. to retaliatesed for the washington move aimed at pressuring nato allies and releasing the pastor. he is being tried on espionage and terror related charges. trump has damaged american relations. now, what the turkish side is doing is not burning bridges but trying to keep the bridges safe. mark: he says turkey is still

delivering possible measures but wanted to "minimize the damage." china is ready if the u.s. takes a trade dispute to the next level. they are prepared to retaliate if president trump carries out his threat to put more tariffs chinesebillion worth of products from 10% to 25%. zimbabwe's president says international election observers have told him they are " disappointed with the events of yesterday that left at least six people dead." the zimbabwe community have condemned the excessive force of oppositiony against reporters. official site results will be released beginning at this hour. the european union is offering

to speed up funds for farmers to help cope with the effects of drought across the continent. the eu's executive commission says farmers could obtain at least 70% of their rural development fronts -- funds from mid-october instead of september 2 deal with their problems. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton, this is bloomberg. ernie's continues. aig reporting adjusted eps of $1.05 missing even the lowest estimates compiled by our analysts here. dollar 21 was the consensus an immense. investment income dropped in the quarter because of lower returns on alternative investments. million recording $200

in nonoperating restrictions cost because of efficiency initiatives. the decline was interesting. lower returns on alternative investments from pe and hedge fund performance. julie: we're also looking at numbers from symantec. they are coming out with second-quarter earnings forecast low estimates. andmost, it looks to our $.35 a share and $.38 is what analysts had been anticipating. that accounts for the decline in the shares. this is even after the fiscal first-quarter numbers were slightly better than had been estimated. the second quarter revenue forecast looks to be short of estimates as well. that is weighing on those shares as well. the company has been undergoing an audit of its internal financials and internal investigations. it has not yet filed its annual report for that reason.

markets,on today's let's bring in peter. we have been talking to you pretty consistently about bearish numbers. i think that has been remained pretty constant even in this earnings season looking pretty solid. has your bearishness waved any off -- wavered any off -- wavered at all? peter: markets look forward. the earnings have been ok. the question is what will happen as we move forward. -- i love our at president and how he looks at the nfl and trade, and i look at it that we don't really know what a catch is in nfl. we are confused on some of our trade roles so we will limit trade and close down the nfl.

it does not make a whole lot of sense. those aspects are economically depressing. it is deflationary. this morning, the market was down and we would have had the whole story on trade and we would have gone on that. but, apple is a great story because it is $1 trillion. if it compounds at that rate it would be the only stock in the world. and has lose earnings are in the middle of the range. you need to step back and look forward. the industrials have been relatively weak. we can go through the stories. until that changes, i try to be data dependent unlike other people i just mentioned and i will not change my story. joe: on the flipside, we have had profit -- high-profile bombs. i'm thinking of the tech

companies. we were greeted to negative headlines all the time. you mentioned trade. -- prettyretty break bleak overnight. you had pretty interesting turnarounds with caterpillar which failed to hold its gains in the second quarter, yet, here we are. we're still really not that far off our all-time high. generally, the trend of since early february has been solidly up. a clearly impresses me. apple's 4% of the s&p. record highs help support it. amazon was ok. it is getting narrower and narrower. if you look at the highly weighted stocks, the higher the price goes up for some of the

few stocks, the more weight they have. the more they go down, the indices will look good. not a stockit is market. you have to look below the surface. is it impressive? yes. let's look around the world. what is closer to the yearly lows? shanghai, kong kong -- hong kong, and japan is in the lower range. the u.s. is the last. it has been the strongest, but it will not maintain itself around the world with everything else weakening. was like to throw something of an outlier out here. have we see lumber recently? the last time i came on i said be careful of lumber and look has what has happened to lumber and last five weeks. you also have your headline today, housing in vancouver was the weakest it was since 2000.

if i recall, there was some sort of importance in 2000. scarlet: it has to do with the internet i believe? i'm glad you bring up the international angle as well. there are a lot of idiosyncratic stories we are keeping and i on. you mentioned japan and the bank of japan is changing how it targets its yield. does things like turkey not have quite the same effect on emerging markets as a whole as the china story would. to what extent could that be an early leading indicator of more trouble afoot for liquidity, risk-taking, investors overall. a brilliant point because prices are made at the margin. you have to see where the marginal demand is going to come from. a few years ago, turkey was a big touristy destination. it's reverbs -- reserves were growing, and it is three months -- it's three-month interest rates are at 20% now.

you go around the world and it takes off one by one. where is that marginal demand coming from? it will not be there. we are more and more looking inwardly. if you look at the components of gdp, as we said, where is that going to come from? . trump will shut down the government. we have seen investment has not are an investor and enjoying your sarah buybacks -- share buybacks. that leaves consumption. wages are not growing. the market index, all the numbers that came out this month were lower. employment has been good, but wage growth has been slow. we need aggregate demand. joe: i made a chart of lumber futures just for the fun of it because i wanted to ask as well, i put the homebuilders.

the yellow line tumbled really hard, the homebuilders peaked. real estate, you mentioned vancouver as the center of the financial crisis. is it as important for the macroeconomy as it was then? and, if we do see a downturn in real estate, and the jury is still out there, is that the thing that would drag us into recession absolutely -- recession? peter: absolutely. real estate is people's largest asset. they look at that as when it is appreciating, they feel good read confidence in themselves and economy related. sales, if you look at post tax changes, suburban markets have slowed it down, and non-us buying in cities has also slowed. i wonder why. we are so inviting to all of

those non-us people. julie: in the case of the financial crisis, it was real a cause.ing more is it now more than a symptom than a cause? peter: i would beg to differ and say leverage was the cause. julie: leverage on real estate specifically, right? peter: the question is where is the other embedded leverage in the system. more insay it is equity, equity derivative type inngs like etf's than it is the housing market. since it is such a large percentage of people's net worth, they will be more conservative because they are not seeing appreciation in the largest assets. scarlet: peter boorish, thank you -- peter borish, thank you for joining us. peter: thank you. from new york, this is bloomberg. ♪

mark: i'm mark crumpton with first word news. top u.s. intelligence and are raisingurity's alarms about potential efforts to influence the 2018 and 2020 elections. the direction of national intelligence was among those who spoke to reporters on a white house briefing. >> in regards to russian involvement in the midterm elections, we see a pervasive messaging campaign by russia to try to weaken and divide the united states. these efforts are not exclusive to the selection or future elections, but certainly cover

issues related to the election. mark: christopher wray calls the threat of foreign influence on the elections "broad and deep." mark carney is not reeling -- ruling out raising interest rates again before he leaves the bank of england into the next year. the boe raised rates for the second time since the financial crisis with the governor citing the need to temper his pressures. he spoke with bluebirds -- bloomberg's' francine. >> this is the right way for the economy. there is a wide range of brexit outcomes possible, and we hope by the end of the year we will be much better informed on which path the u.k. and eu are taking. mark: i asked whether today's hike was likely his last and he said why would i possibly hand way that possibility. it is certainly not my last decision and there will be a number of very important

decisions. ofwill even the end of june 2019 after extending his term by year to guide the economy through brexit. ohio state plans to keep reporters away from its football team while it investigates the coach's handling of a long time assistant accused of domestic violence. the university canceled availability for preseason practice tomorrow. ohio state is invested evening -- is investigating lames of his wife knowing about abuse on zach smith. myers also told reporters he did not know about the 2016 allegations until just before smith was fired. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. scarlet: let's get a recap of today's market action.

apple joined the four, club. it is a trillion dollar company by market cap. the dow finishing unchanged and the nasdaq is up one and a quarter percent. plenty of earnings taking you through after the bell. that includes aig lower by about 5%. second quarter earnings are from investment portfolios, specifically its private equity and hedge fund performance weakening. as a result, profit missed analyst estimates. take to on the other hand is moving up from 8%. the first quarter eps beat analyst estimates, and it's full eps view falls short here. it gave a range. the midpoint of the range does not quite come up to some versus the consensus estimate. nevertheless, the stock is doing better. julie: we are also looking at symantec down 10%. their last quarter was ok, but the current quarter it says will earn as much as $.35 which is

three cents below analyst estimates. that appears to be what is behind the tumble in shares. and the medical waste management miss when it comes to its revenue in the second quarter. year forecast is also below estimates. watching shares of cbs. that company came out and it looks like the call has begun. moonves, the ceo under a cloud of allegations in his story -- in a story published by the new yorker, he is going to speak on the call. cbs is saying it will not discuss russman claims on the call. that is one of the early headlines we are getting as the call just begins here. scarlet: there's a tweet from a thereood reporter that was a second story perhaps in

the works for les moonves causing a slight wobble in the share prices in the afternoon trading. out as wellngs came and beat estimates by a penny as revenue rose 6%. "what'd you miss?" yuan drops for the first time in a year. the speed oft says the decline is likely a signal from beijing that the trade war is becoming a major irritant. for more, we're joined by robin who is the chief economist at the international finance. war?e entering both trade >> it's great to be with you. the two are linked. war then doing a trade the purpose is to make your

opponent less competitive. that is part of what the terrorists that have been imposed and being discussed are accomplishing. how can you, that loss in competitiveness? the question is, how much do you devalue it and that is the big question everyone is debating. joe: what are the risks of currency flight. -- flight? one of the things that is remarkable is the speed of the yuan declines. when they did the one-off evaluation, there were ripple affects on working to stem the currency flight. is that a risk this time around? robin: the biggest risk of the 2015 d about was that it abruptly ended my summer vacation. joe: was the second-biggest? [laughter] thinking about china, you have a wealthy middle-class in many respects who are like any

middle-class interested in perspective and -- preserving their wealth. if you start to worry about the currency in which her wealth is denominated, you will think about how you can redenominate your assets. does the issue in 2015 and 16, and is the same issue now. there has been a lot of restrictions and tightening of those, but my sense is that they do not work as nearly as well as many people think. if we go above a seven on the -yuan, china has to be careful. joe: you mentioned the buying of the middle class. about the people in china who want to buy, travel around the world. tourism is a major export from china -- a major source of demand from china. does it get to the point where weakening the currency capital -- currency, capital flight

decide, hurts people wanting to purchase abroad? robin: absolutely. to my vacation story, if you go around national parks in the state, chinese tourism is huge. thatevaluation makes travel much harder. the purchasing power for chinese middle class travelers goes down. that may be part of the intent of chinese policymakers because services imports or tourism have in one source of capital outflow. as julie ask about trade war and currency war, if of thes mindful possibility of a capital flight like in 2015 because of to aggressive of depreciation, what will hold the u.s. from going all in? robin: the china and the united states have an achilles heel in this. china has a capital flight risk and the slowing domestic

economic momentum. exporters are important. for the u.s. and white house, the main concern is that markets start to make -- take note. back in 2016, when devaluation fears were a big deal, s&p fell 10%. how much are this white house is open to that risk. julie: so whether you are talking about china were u.s., the question is how much pain in these areas are in the administrations -- are the administrations willing to take? do we have a sense of the tipping point on either side? robin: we have a sense of what the tipping point is for markets. the odd thing is that markets are really not discounting much in terms of a aggressive -- in terms of aggressive devaluation. are in prep for aggressive competition.

a 10% tumble in the s&p will quickly change the dialogue here in the u.s.. thinkobin, what do you the administration's reaction is? we know they are threatening further tariffs, how much is specifically as a result of what they seeing -- what they are seeing as a changing currency dynamic? robin: that's a great question. yuan has fallen roughly 6% from its high in both the u.s. dollar and trade terms. that, we think, is roughly enough to offset the 25% tariff on the 50 billion and additional 10% on 200. 10% to 25% on the original value, all bets are off. that is a complete game changer. markets are not ready for that. brooks, thank you

for joining us from washington. speaking of washington, we hear from marco rubio as he discusses how he believes social media companies are handling their campaigns and why he is outraged at google. this is bloomberg. ♪

julie: the cbs second quarter earnings call is underway. romaine bostick has been listening in and joins us with the latest. romaine, we got the headlines on not talking about the harassment. romaine: this is overshadowing the call and les moonves is speaking on the call and sticking to the numbers. the vice president in charge of investor relations says right at the beginning of the call they would not be speaking at all

about any of the allegations. he did not even mentions the allegations in any detail. basically saying on the advice of counsel, they would be sticking to the quarterly results. so far, that is all we hear from the company. joe: we're not done to the q&a, right? romaine: none yet. they're running through the numbers. we will hopefully steer questions directed toward the allegations once it starts. they don't plan to discuss it. scarlet: another cloud hanging over the company is a merger with viacom. has anyone made reference to that on the earnings call so far? romaine: so far, the executives have not made reference to it. for the press release, there was also no reference there either. some of the big overhangs for the company and the stock, whether it is my, or misconduct allegation have not been

addressed. julie: in the meantime, the numbers look relatively strong. they were not the blowouts but look to beat estimates or to be in line with estimates. romaine: they both came above expectations and on the call, they are touting the increases they are seeing in digital descriptions. they are touting the ratings they are getting on the networks. they have a lot to show in terms of their business. there's a big overhang over the stock. i should point out in after-hours trading, the stock is down about 9/10 of a percent. it is down about 8% since last week with those allegation servicing. romaine, thank you so much. he will continue to monitor that call for details. in the meantime, let's get you to the business flash, a look at the biggest stories in the news now. we are in the thick of earnings season and investors were rattled by disappointing for

your forecast. the world's biggest chemical maker is contending with ripple effects from the trade war. the american farm sector operates with a trade surplus, but agricultural foods have warned a potential downfall the at trade tensions. an israeli-based drugmaker posted second-quarter sales that dropped 18%. the company has also been hurt by price erosion in its biggest business which is generic drugs. shares of blue apron saw the most ever. the company reported a drop in customers and projected further deterioration in revenue. sales missed the lowest estimate and customers dropped 24%. that is your business flash update. up next, jobs friday. we are predicting jobs added and breaking it down ahead of the last critical data point for a

lot of people in the markets go away for the summer break. this is bloomberg. ♪ ♪

julie: "what'd you miss?" countdown to the jobs numbers. the u.s. economy is likely out of jobs again while wages held even. for more, let's bring in carl riccadonna. is it all going to be about wages again? is that with the focus will be? >> that is the overarching theme or underlying theme for the last several quarters. angle oran additional two angles that we have to think about when we look at the report is one, yes, the wage pressures story is an ongoing story. in addition to that, watch for

andence of tariff impacts hiring in general. the key is to watch the payroll diffusion index which tells us breath of job creation. if that is falling apart or dwindling, that could be a sign there are cracks in the facade emerging just like ahead of the 2007 recession. we saw diffusion rollover in the construction center -- sector. that was a canary in the coal mine for what was to come. the second story is this politically charged debate about whether or not q2 gdp growth at 4% really is sustainable. within that, the bigger question is, is consumer spending repeating the performance of q2 which i do not think it can. you watch the income trend to see ultimately if consumers can

maintain that heavy of a pace in the second half of the year. joe: primates labor force participation rate is a number highly debated. if that continues to rise, that has been rising, what does that tell us? carl: it tells us there is more slack in the labor market than the 4% unemployment rate would have you believe. what is impressive is we have the talk about the lack of wage pressures in the economy. what should be driving the cyclical rebound and labor force participation is juicier workecks over enticing conditions. like flexible work schedules, bring your pet to work, reduced worker requirements, all of those issues already are starting to bend the trend for participation. wait until we see bigger paychecks. i suspect there is a lot more slack than what we think is

evident and this is a theme stretching from ben bernanke to jenny yelling especially. julie: i want to bring my dog to work. [laughter] joe: our employees more comfortable doing things like letting their workers ring the --akeet to work than wages then wage hikes because they can always reversed the parakeet policy but it is hard to reverse paychecks. carl: they are doing everything they can to make a more appealing work environment up to but not yet including higher paychecks. say they're not doing paychecks, you do see a very modest uptrend. even the employment cost index for q2 came in a little more expected. there's just not a significant positive slope. scarlet: when you do see wage increases, it tends to be at the bottom end as well. in manufacturing, it was at the manufacturing level rather than the supervisory level. , in generalk about

when it comes to companies that are able to gain wage increases, do you see that more in certain sectors where they don't have a choice or room to offer other benefits and perks. the last thing they can do is provide wage increases. carl: the skilled labor sectors would be one that would offer , and all of the other nonfinancial perks don't do the job. julie: is that the place you are seeing that? carl: you tend to see much more wage pressure in the high skilled, higher education levels. the other side of the coin is looking at the unemployment rate in those sectors. sector withat the advanced degrees, it is much lower. joe: carl, what would be something we could see that could cause a meaningful move in the fed rate path? carl: a meaningful thing, first

of all, we've been waiting for the emergence of labor -- faster labor inflation for the last several years. if we see it is off to the races and labor costs are boiling over , and this is not my view, that would cause the fed to worry. we have been too low for too long. anything thatide, hints in a stall of job creation or household income creation means the main driver of the economy, consumer spending, could be on shaky ground. scarlet: so boil over or stall, anything in between people shrug. bloomberg's chief economist, carl, thank you much. the cbs second-quarter earnings call is underway. romaine bostick has been listening in. romaine, what have you heard so far? >> they are still going over the numbers and they are good. 15%, revenue 6%.

everything is good on that front. notone thing they are talking about is the allegations against les moonves. the coo is also speaking on the call and has not mentioned it at all. at the very top of the call, the investment relations manager made it clear they wanted to stick stick lead to the numbers. joe: just to be clear, romaine, has the q and a begun yet? romaine: the q and they has not started. they are still going through the a has not q and started. they're still going through the numbers. scarlet: is there a time limit to these conference calls? romaine: there is no time limit. they could go on as long as they want. right now they are going over the businesses, operations, and once we get to the analyst portion of the call, we could you questions about the allegations against les moonves as well as about the status of the viacom and national amusements issue. isrlet: my guess is that

when the lawyers get on and say we will not answer the questions. romaine bostick, thanks for keeping tabs on the call. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" apple making it to the $1 trillion level. joe: that's a very important

meeting for level and -- in my opinion. i'm serious. it's incredible. the nasdaq performed the best in the dow had little changed. second-quarter earnings before the bell. joe: i will be watching economic data and the jobs report out at 8:30 a.m.. julie: we will also speak to the dow chemical ceo in the morning. excited? be more joe: very jealous. julie: that is it for "what'd you miss?" scarlet: "bloomberg technology" is next. joe: have a great evening. this is bloomberg. ♪ ♪ retail.

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