commodities are outperforming. hopeat least gives us some that things are getting more normalized. i do think it will be about earnings' power power for equities. tooline: meanwhile, risk was the downside today and reward was to the downside along these markets. you some money coming off the table in the s&p 500. overall, it feels like technology for the brand. today come off by 1.3%. on the margin, volumes are down slightly. romaine: there were some stories that they were doing really good like what happened with 3m. a lot of the material space, the industrial space so i let of weakness today. martin marietta ecolab.

lamb weston, that was one of our stocks of the hour. down 11%. i don't know what is going on over there in the 209. taylor: i am never going to live that down. that is good to know. on a more serious note, some of the industrial companies, 5757.r at a spot intraday basis down to about 31 basis points or so. keyink 54 will be the next resistance level. the flight to quality we have seen, given the fed and some of the weakness we have seen in earnings. shawne: still with us, matthews. it is earnings season and we are getting into it with some of those large mega cap tech companies. there is high expectation but

also a general sense that given their size, given their market dominance, they really cannot lose. they will have the revenue growth and have margin expansion there is really not a reason to be afraid of what they will say or report. do you buy into the i guess teflon nature of some of these names? i think it can last for a while. if you look to the nifty 50, that lasted for quite some time. i think your earnings will go down 10%. i think you will start to see that the government will try to go after some of these tech companies to break them up, which clearly will have negative connotations. i think at this point in time, they feel safe because their earnings power is there. they will be able to have pretty

good guidance on what will be the future. but i think there will be external shocks that really are not priced in yet. the overall market is not pricing in any type of election cycle mentality at this point in time. once that starts to happen, mid-august to late august, you will start to see potentially some of these stocks which are high flyers pull back a little bit. taylor: i am trying to go back to something you said earlier about dollar and the reserve currency. goldman sachs came out with the same call this morning, the growing debt, higher inflation, showing that investors, again, not tomorrow, but 25 years from now, are worried about debasement fears, what the dollar can do given the massive debt and deficit we are running. our investors ready for that?

it's the first time we have really seen people and investment banks question the dollar as a reserve currency. shawn: i don't think they are ready for it. but that is the long term. we are talking about a couple of decades or at least a decade-plus. i think the market is very much what is going to happen in the next quarter or so mentality. but you are starting to project out what our debt to gdp can be in 10 years. i keep coming back to a number that would have been equating into an emerging-market company -- emerging-market country. that right tail. if we think about the right tail of growth for the u.s., it will not be as high as it used to be. it used to be you would come out of a recession, be able to pay down the debt you incurred. if we look going forward, if we come out of a recession, we will be growing 2% or 3%.

so that has drastically changed the upside potential for our economy which over the long haul has implications. the reserveoking to currency status of the dollar, you are looking in liking gold. are you thinking crypto? shawn: i am not. i need a currency to have a military and tax authority. crypto, i still don't understand. that doesn't mean it will be accepted over time. but i just don't think it is accepted yet. romaine: don't worry, a lot of us don't understand. joe weisenthal is coming back soon and that is all we will be talking about. earnings crossing the wire here for starbucks. the estimate was for down 42.8%. i guess you can call that relatively in line. it is saying, looking forward, it sees the covert impact to be

moderate, meaningfully, in q4. a little bit of a forward guidance. company shares down about a fraction here at the moment. outill see if we can find more detail any moment. caroline: let's talk oreos. the secondenue for quarter just ever so shy of expectations, coming in at net revenue, $5.1. this is still a company that we have a single sell recommendations on and. second quarter organic revenue up almost 7%. boost in dividend come up 11%. coming in with better third-quarter adjusted earnings per share, $1.06 for's estimates of $1.03. revenue coming in at about $4.8.

net revenue at about $2.4 billion for the third quarter. we are looking at payments volume down about 10%. on a constant currency basis, third quarter cross-border volumes that he 7%, slightly ahead of estimates again. i think we do need to jump in and redo these press releases. romaine: starbucks, a little bit more information. total comp sales very much in line with estimates, down 40% worldwide. international comp sales did that are than what analysts were expecting. china comp sales still down year-over-year but better than what analysts were looking for. the company saying that the negative impact will begin to moderate. caroline: and moderate meaningfully. we want to thank, none other than shawn matthews.

always great to have you with us. that does it for "the closing bell." "what'd you miss?" is next where we will be digging more into the earnings and also the fed decision. this is bloomberg. ♪

♪ caroline: from bloomberg's world headquarters in new york, i am caroline hyde. earnings coming fast.

we look at a market that closed on the downside. five hundred. investors searching for guidance from the fed as we look for the key rate decision tomorrow. this is the central bank extends most emergency lending programs by three months. could intel's delay give a boost to other chipmakers. all that and so much more coming up. romaine: quite a few earnings crossing the wire. 5.1oreo maker coming in, dollars, slightly ahead of estimates. the company saying it will not provide a four-year outlook because of the -- a full year outlook because of the covid crisis. visa also saying it will not come out with a full year outlook. 7% in after-hours trading, pulling down others as well. -- the company also

giving an outlook that fell short of estimates. starbucks, better-than-expected report, q3 comp sales down 7%. the estimate was 42.8%. the company saying that the negative impact on the covid-19 crisis will moderate moderately that moderate meaningfully in q4. taylor: i know that we need to look to the fed for some stability in these markets. a chart of the massive rally we have seen in the 10 year yield. dropped by the most since march on a monthly basis. after two more months of rising yields. in march, yields fell from 150 down to 67 basis points. you are seeing some big moves. biggest monthly moves going back

since march. i want to bring in some insight. what do we need to hear from the fed tomorrow on treasury rates, yield curve control, or are we already in it? >> for the most part, it looks like the bond market has already bought into the work for longer. i think what you will hear from the fed is a cautious tone. willhe most part, they stick to the script and remain cautious, especially in the context of rising tensions with the u.s. and china. they are going to tee up for potential policy changes at upcoming meetings. romaine: talk to me about this spec dacula rally. -- this spectacular rally. does the fed continue to ignore this given that you have a market that continues to push more into negative territory?

does the fed have to of knowledge this in some way or another with regards to their benchmark yield? respects, theme market was doing their job for them. this could be a deflationary environment, a dramatic amount of demand destruction. cutting prices, inflation expectations. around 150 basis points. the market is already pricing in for the potential of forward guidance linked perhaps to inflation. that inflation is going to run higher than normal. the market is doing the job. clearly, the concern is on the absolute level of real yield. not a positive sign. many would say neither is the

sudden desire to be getting into gold. saying deflation is actually a picture we will see in the near term. subadra: i think this is more of a disinflationary event. i don't see any near-term catalyst for a rise in inflation. isna, what you are seeing supply-side coming back, demand starting to come back. i think that prices will continue to come under pressure. this is more of a disinflationary/deflationary environment. all you need is a little bit of growth come a little bit of positive news. that potentially would lead to higher inflation. taylor: this comes as we have about a 58 basis points low on the 10 year.

where investors are looking for yield rates at record lows. are being forced to take risks at other places. appreciation in credit spreads in general because of the implicit fed backing provided through their primary and secondary corporate credit facilities. taylor: do you see some of this risk-taking going on even within we justifiedr are on the 10 year? subadra: i think you are seeing a large divergence between the message for risky assets like equities as well as credit, high-yield, and what you are getting from treasury markets. treasury markets are very optimistic -- very pessimistic on the outlook but risky markets

are optimistic. the by anything environment, somewhat fueled by the amount of stimulus from the fed. the fed is concerned about national stability and do not want to be providing too much stimulus and creating bubbles in the market. i am sure they are watching this very closely to see how they can curb some of these successes. romaine: there are a lot of people watching the fed as well. but there are a lot of folks who have participated in this rally in risk assets and are still a 10 year yield someseems to be stuck and people think it may even go lower, where do you look for that hedge at the moment? hedge,: i think the people are buying gold, other forms of real assets.

my concern is that the treasury yield is stuck around 50 basis points and the move to real yields, real assets, there is only much you can go. was maybe not as bad as it in march. what we sign march was a sharp .ise in real yield we could see a reversal in the safe haven it real assets. subadra rajappa, societe generale head of rates strategy. tomorrow, full coverage on the rates decision starting at 2:00 p.m. these earnings.

, with intel losing potentially bit of its market share as it sees slower production of some chips. amd raising full-year revenue target. they are gaining after-hours as they see second quarter adjusted earnings-per-share, 18%. this is a stock that has rallied hard, horrific numbers in terms of their guidance for where production is going. let's have a quick look at ebay. second quarter adjusted earnings per share. romaine: ebay also raising guidance going forward. 25.9,timate was for roughly. so a big beat. q3ee q revenue estimate, adjusted estimate, also coming in above with the street was looking for.

on that revenue, $10.56 billion to $10.7 billion. a similar upgrade on their range for eps, for continuing operations. you can see ebay getting a little bit of a bump here. caroline: from new york, this is bloomberg. ♪

romaine: big day tomorrow, the ceos of apple, google, amazon, and facebook going to capitol hill to testify on what is going to be an antitrust inquiry.

this is a pretty significant deal. jeff bezos appearing before a time since het has been ceo of amazon. what are you keeping an ion? it is amazing that the committee has enabled together all these people together. i will be watching bezos's performance. the chairman of the committee has really targeted amazon, particularly based on its relationship with third-party merchants. bezos is really going to be in the hot seat over whether or not they are anticompetitive in their relationship to those folks. caroline: we have seen zuckerberg take the stand a couple of times. they will be so much politics at play, isn't there?

>> i think so. on the republican side of the aisle, they have signified that they want this to be about antirepublican by ants. donald trump referred mark zuckerberg to the doj for potentially lying to congress in one of those prior testimonies. when you see something like that, you know that they are really signaling, this is the question we will ask. when you go to the republican side of the aisle, the question will be qamar any of them going to be asking about antitrust, and if they don't, does it signal that when the committee makes recommendations on changing antitrust law, wealthy republicans back at? that will the republicans back it? taylor: is it a legitimate argument to say that if we break up big tech, we can't compete with china? >> that is an issue that will be brought up at this hearing.

we know that zuckerberg could say that the current fervor is kind of clearing the way for chinese tech firms. i think the way that the democratic side of the aisle would come back is to say that competition is how we innovate. the chinese model just kind of can't back that. and if we do break those up, it could make the market better. usually, when these hearings go, you get a lot of grandstanding by the politicians, but you usually don't walk out with any kind of tangible change in legislative policy. is there a sense here that congress actually has the will to do anything other than just the public performative nature of these types of hearings? >> i think that is a real open question. this has been a year-long

investigative series. toward the middle, when you would go to these smaller, low-profile hearings, you would often hear the republicans echoing some of the same concerns as the democrats. thechairman of subcommittee, saying he was concerned about small businesses are concerned about dominance. the question is, will the politics of this basically get in the way? i think the answer to that is something we will learn tomorrow. if you had asked me six months ago, i would have said definitely there is the will. now, i am not so sure. caroline: bloomberg's and brody will be all over it for us. be sure to tune in tomorrow for the coverage of that rescheduled hearing, beginning at 12:00 noon new york time. now, a check on the latest

business flash headlines. credit suisse set for an overhaul of its business. the bank also expects to combine its risk and compliance units. the changes could be announced as soon as thursday. worstld's reported its global sales in recent memory. expected,orse than 23.9%. that was brought down by a 41% plunge in international markets. drive-thru's were not able to make up the blows from the pandemic shutdown. the parent companies of rocket mortgage and quicken loans have filed for an ipo. the detroit based company started by billionaire dan gilbert is the biggest mortgage lender in the u.s. we have been getting into those earnings. none other than amd coming up next.

rising after hours come up almost 8%. a rampant rise. this is bloomberg. ♪ save hundreds on your wireless bill

without even leaving your house. just keep your phone and switch to xfinity mobile. you can get it by ordering a free sim card online. once you activate, you only have to pay for the data you need, starting at just $15 a month. there are no term contracts, no activation fees, and no credit check on the first two lines. get a $50 prepaid card when you switch. 5g is now included with all new data options. switch and save hundreds. xfinity mobile. but what if you could stdo better than that?k. like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward.

that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today. chipmaker raising its full-year earnings, seems to be firing on all cylinders. track withhe inside bloomberg intelligence. their shares have been on quite the rally. afteranaged to even pump hours. >> they are executing very well compared to their larger peer, intel. they are benefiting from a new, refreshed road above both cpu and gpu's, and the combination. and are doing well in g's

in the data centers. their products have smaller note relative to intel. they are definitely the technology leader. this is amd's share to lose now. romaine: the execution of a.m. has beeneen -- of amd nothing but remarkable. thoughts on something that came up with the manufacturing process, whether intel should be manufacturing them in-house or outsource in them. i know that amd relies on taiwan semi and some other companies for the production. factor intos that the performance? >> amd took its lumps several years ago when they went to a strategy first with global

foundries, then with tsmc. on the other hand, in hell's scale is much, much bigger. switch to turnsy on or off. this would be a multi-year process on part of intel. they already do make some stuff. , 25% of% of the revenue the revenue is coming from tsmc products. that said, this is not an easy thing to switch on for them. the second art event, this has been handled as a core competence for intel since its inception. to suddenly give up that dna and say we will be a design house only, we are not good at manufacturing, that will be a huge culture change for intel.

, in the part of it is united states, the political pressure of moving those high-paying manufacturing jobs overseas. that adds another fact or of complexity. it is not as easy as just a strategic decision. this would be a multi-year transition. note, what was the most bullish part of this release, from graphics to process units, what really stood out to you? >> prior to the intel announcement, going in, intel amd needed another leg of momentum. pcs, data center gains, may be the new consuls. they are in both the xbox as well as the new ps five.

you needed that extra oomph. then intel happened, and the stock ran up as a result of that. now, the fact that they are executing well, they are raising full-year guidance despite the pandemic, in the face of pandemic and in the face of intel, they are not only doing well, they are doing other than anticipated, i think across the board is a good sign. growth margins were ok. both of their sick instead well. across the board, this was a solid, solid result. romaine: interesting day here for this space. aboutrse, amd shares up 9.5% in after-hours trading. always great decatur inside. bloomberg intelligence, they do

a lot of great work down there. let's get over to the bloomberg first word news with mark crumpton. mark: attorney general william barr today offered a combative defense of his independence from president trump and of the federal response to protests following the police killing of george floyd in minneapolis. attorney general william barr testified on capitol hill before controlledtically house judiciary committee. >> i reject the idea that the department has flooded anywhere suppresspted to demonstrators. the fact of the matter is, if thetake portland, portland, courthouse is under attack. mark: the attorney general says the violence taking place in portland and other cities is disconnected from george floyd's killing, which he called a horrible event.

some encouraging news out of california today. the state reported 6000 new one a virus cases, the lowest daily number in three weeks. the daily death rate also fell. hospitalizations from covid-19, which restate that which reached a record last week, decreased slightly. hurricane hanna is gone but some people in texas are dealing with its aftermath. grounded medical helicopters for days, leaving doctors no ability to airlift the most critical coronavirus patients for treatment elsewhere. governor greg abbott said he is worried the storm forced people together indoors. mackenzie bezos says she has donated about $1.7 billion this year to causes related to racial equity, climate change, and public health. the ex-wife of amazon founder jeff bezos now goes by the name

mackenzie scott. ms. scott says that the first half of 2020 was a mixture of heartbreak and horror. she has signed a given pledge to donate the majority of her fortune within her lifetime. she is the second wealthiest woman in the world. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm a mark crumpton. this is bloomberg. ♪

caroline: let's get you up to speed on some of these earnings. a strong forecast for the year, raising full-year guidance and

saying that third-quarter revenue will be around $2.5 billion. this also better than expected. managing to win out in this lucrative market for server chips. taylor: shares falling 5%. ebay, even after the second quarter adjusted earnings per share, better-than-expected at $1.08 versus estimates of $1.06. they are boosting their full-year outlook. but perhaps it is higher net revenue. so perhaps a lot going on here as we toured of figure out what is going on with ebay. romaine: if there was any industry most exposed to the covid shut down, it was the restaurant space. denny's operating revenue, coming in at $40.2 billion. comp sales down year-over-year. starbucks, slightly different story. denny's, mostly eat in. starbucks, a lot of takeout. comp sales down 40% in the

fiscal quarter. the company did fight outlook for same-store sales going forward. a little bit of an improvement. ,e want to bring in ed ludlow who joins us from bloomberg news. give us a little bit more of a break down here. the quarter was bad, but it was largely within expectations. is that right? ed: in this quarter of all quarters, i think the investors are giving starbucks the benefit of the doubt. we do that comparable sales would be kind of ugly. to the positive, i think people would point to the average ticket. across all of starbucks's key markets, we saw the average ticket price come up. we are talking about when a family or individual places an order, they are essentially buying more even if they may be going less frequently. the company also kind of put its

neck on the line. maybe the investors look at the 12%-17% fiscal year and see it as a positive. the company had pretty significant margin contraction in the quarter. the company is also spending to try to adapt to covid by introducing more store formats, by responding to this consumer preference. while on the face of it, yes, can terrible store sales are down i think all things considered, starbucks is mitigating the effect as best they can. caroline: pointing to the next quarter, saying how much you will see a moderation in the impact going forward. ed: starbucks has spent years talking about the third place, this idea that it is more than a cafe or a place for beverages. you go there, you sit down. think of all the people with their macbook pros sitting in starbucks doing work, writing

plays, whatever it is. none of us are going back to the office anytime soon. so what starbucks is doing now that -- doing now is conceding that this idea of the third-place needs to change. stores with more seating, they will start closing some of those stores and reopening three smaller stores in its place. a real emphasis on to go, a real emphasis on drive-thru. a lot of analysts said that starbucks did not have as many drive-thru's as perhaps they would like to be comfortable in that covid environment. i think they are also focusing heavily on the digital relationship. if you are not going to be spending as much time in a physical store, you need ways of grabbing attention. we have seen emphasis of how they are getting people to transact through the starbucks cap debt starbucks a-- the starbucks app.

i will be looking forward to seeing how digital transactions have done it in the early weeks of covid, they did well. taylor: we were hearing earlier from mcdonald's that international sales really dragged them down. saying that china sales only off 19%, much better than what analysts thought. what are we learning about china? ed: yes, comparable store sales .ere not down as much let's say for argument sake, three months. i think the question is how reflective is the situation in china versus what you expect to see in the u.s. in the coming three months? do you expect recovery in the u.s. to mirror what you see in china. while the comparable store sale was not down as severely, we did an emphasis.ch of

it was the opposite in china, there was a real preference to sitting down and having coffee. bloomberg's edto ludlow. let's get a quick check on the latest business flash headlines. consumer confidence fell more than expected this month. americans are rattled by the recent increase in coronavirus cases and the impact on the economy. the measure of six-month expectations fell by the most since march. hotel operator to the stars will reportedly look to get out of the traditional part of the business. according to dow jones, he wants to convert some of his boutique establishments into private residential clubs. among the hotels it operates, the historic chateau marmont in los angeles command the hip mercer in lower manhattan.

i am not hip so i have not in there but if you want to pay me enough. romaine: hanging out at chateau marmont, a quick drive down the i-5 from stockton. caroline: i am going to go back to my heritage. chilton firehouse come i remember that was like the big opening in london when i was living there. now potential he getting converted into a private amber's club -- private members club. it is unfortunate for the people he has to lay off. i was reminded, he apparently made his money in biotech back in the 1980's. taylor: interesting that we can go from the hotel properties to the commercial and residential mortgages. mortgage backed securities, we know that they were to blame in 2008 but this time, they

represent value. the founder and ceo spoke exclusively with bloomberg about the value when buying nonagency mortgages and rang -- and rates. and why he is willing to take the risk now. of march, we had a lot of nonindustry reads that could not meet margin calls and things devolved pretty quickly into a cash grab. there was a lot of indiscriminate selling. notke 2008, mortgages were the problem. this was a classic case of the baby being thrown out with the bathwater. we put them to work in nonagency and other securities. there is a lot of dispersion of value. you need a lot of expertise in alternative data sources and

inks like that. there is a tremendous amount of value. fed hasdrop is that the been aggressively buying. other quantitative easing's, they have increased their mortgage payments. the fed now owns about 30% of the $6.7 trillion agency mbs market. you see tremendous support to this market. even compared to other times, you have seen this buying from zero on march 11, to now almost $200 trillion in assets. >> i guess the question is, what did you buy? and what did you sell? march is a scary time for many investors and nobody knew that the fed would step in the way that they did. he took a big risk. so now, what are you doing? >> basically, you have to have some dry powder for these sorts

of events. -- the thirdthorpe or fourth one i have seen. i would not say it was a yawner but it was not as bad as other ones. you have to manage left tail risk. if you have got some cash and you ask clients, come along with. we put money to work as opposed to selling most of what we bought were nonagency mortgages. and reits. reits in particular took a real eating in march. since the beginning of 2019, if you look at the ishares mortgage real estate etf, that has lost about 40% in price. agency,a composite of hybrid, and commercial reits. probably as interesting is the

price-to-book of the nonagency in thathe constituents index have dropped over 20% from that 90% to 70%, meaning not only are the prices down, but the actual discount is also down. so we see tremendous value. >> let's talk about the nonagency part. that is the real risky part. agency, you get the backing from fannie and freddie. how did you find the value there? and if we don't get another round of real good stimulus, if we don't get another solid extension, does your view change? >> it does not change a whole lot. that is a very good question. there is no implicit or explicit backing.

however, please keep in mind that these loans have been outstanding, on average, for about 15 years, and these homeowners have paid through 2008. they want to hold onto their homes. we feel there is very little downside in these securities. from new york, this is bloomberg. ♪

romaine: time to check in with joe weisenthal in austin, texas. we have been talking all day about gold. really all week, all month, about the rally we have been seeing i guess it makes sense when you try to make an explanation of why it continues to rise. i would presume it has to tie in with what we have been seeing in bold prices.

lookedce again today, it like maybe the rally was going to break. when i woke up this morning, gold had gone from green to red. but, it continues to gain. i think a really big art of it is this expectation that even if the economy does recover, that the fed is just -- it is just on vacation, that there is no prospect of the fed raising rates anytime soon even if the recovery were to gather steam. that is very different than in past regimes, when we anticipated that if the economy strengthens, the fed starts to hike. powell reminded us, he said, we are not even thinking about thinking about hiking. caroline: also digital gold. are you keeping an eye on bitcoin? joe: we talked about it yesterday but it was always amazing to me that we went to months with all the stuff

rallying and bitcoin refused to participate. finally, in the past few days, bitcoin was another one that was really high overnight, dipped a little bit in the day, then picked back up later. there is a lot of buoyancy in some of these traits which may be connected to negative real interest rate. taylor: i am going to throw you away curveball. from goldman sachs, i have heard some concerns about the dollar not the elite reserve currency -- not being the reserve currency. that 25 years out, it could be china. joe: i think there is a lot of different moving parts here. the dollar has really plunged over the past few months but you have to remember it also had an extraordinary spike in march and april. but if you sort of ignore march and april, it looks like just

sort of a quiet decline relative to its recent range. i think people will be really excited but i think mostly at this point it is about that the u.s. recovery is not expected to be as good as europe and some other places. i think it is pretty exaggerated, at least what we are seeing now. we do not know what the long-term ramifications are going to be. romaine: can i throw you a quick breaking ball? if this coin is digital gold -- if bitcoin is digital gold, what is digital silver? um or litecoin.re i like this game. caroline: we will plan on more random attacks for tomorrow. the u.s. dollar seems to be going flat on the day. maybe you talked it up.

we will see. that is all from "what'd you miss?" t lor: "bloomberg technology" is next. this is bloomberg. ♪

♪ emily: welcome to "bloomberg technology." stocks fall. cases of covid-19 continuing to research around -- resurge around the world. arizona and california struggling to maintain outbreaks. florida reporting a record number of deaths. we are standing by for president trump, will be holding another news briefing