adam: i and adam shapiro. lori: good afternoon. i am lori rothman. we will check under the hood of a giant ad merger. it would put coke and pepsi under the same roof. adam: that is a phase killer. city run healthcare into obamacare. had, we have detroit hopeful on why she is backing bankruptcy and why she wants to fire cabin or. adam: e cigarettes on track to rake in $1 billion in sales this year. we will take you inside manhattan's first store.

cheryl: spike is a she. i cannot wait to meet her. that is a little bit later. let's head back to the floor of the new york stock exchange. nicole: e cigarettes are very popular. everyone will be waiting for that segment. five straight weeks of gains for the dow. today, pulling back some. down one third of 1%. you do have energy that has been weighing on the dow. we have had five straight weeks of gains. also, everyone waiting to see what the fed has to say. we did get some pending home sales in as well. the saks fifth avenue story, they own lord and taylor, it

does include dead and gives them find real estate. peridot is buying them for $8.5 billion. back to you. adam: thank you very much. $835 billion deal. two of the biggest names joining forces. dennis: the largest ad holding company in the world. you have paris based publicist. annual revenue of $23 billion, almost. controlling ad revenue. they are merging as true equals, but are they to equal? we talked to the ceo, the number one firm right now.

he points out a couple obstacles. he says he wants to let them know that he is here for them if they want to look around if the other two firms get tangled up in merger. also, you have to realize that there are antitrust concerns. our justice department turned down the t-mobile at&t merger. are they really equal? publicist revenues are less than 9 billion. the other firms are ranked 14 billion. publicist shareholders are getting half of this entire company. a lot of obstacles left in the way. stocks popped up this morning. now it is barely off at all. morris leavy wants to retire.

they would share power for 2.5 years. a lot of times, that does not work out. this time, it may be good. lots of obstacles. lots of concern. we will see what happens. we will have more as the day develops. adam: we will get that from you in the future, i am sure. lori: let's turn to commodities. fox business contributor phil flynn is in the trading pits of the cme. natural gas at the lowest level in months. >> it is. unbelievable cool temperatures in the midwest. not only this weekend, but for

the next six-ten days. usually in july, the midwest have their air conditioners going 24 hours a day. on top of that, you are getting the dorian debt premium. it died over the weekend. when that happens, of course, we get kind of a premium. lori: for some folks, good news, i suppose. let's talk about oil. we sell a bloodbath over the weekend in egypt and cairo. >> it is concerned about libya. here in the u.s., though, concerns about passing the peak demand and a bout of u.s. production putting downward pressure. we have this fight going on.

on top of that, oil traders of freight to make decisive move ahead of the fed this week. lori: we will also get the gdp figures. a lot of economic data points on our calendar. thank you so much. a warning for the saudis. he says the kingdom's economy is increasingly vulnerable. according to ow will lead -- house wanted at amazon. announcing it will add 7000 jobs in 13 states. 5000 of those jobs will be full-time.

one thing that has been weighing on profit margins, new concerns for apple. china labor watch. alleging labor abusive at a contractor. accused of safety violations. apple has been using it more as it shifts from longtime supplier fox con. fox coo has been accused of similar violations that happened back in february of last year. adam: back in the united states, everyone is watching detroit. cutting some of the billions of dollars it owes in retiree health costs. one of the people we want to ask about that is crystal, a former

top lawyer of the city of detroit. we appreciate her being here with us. this plan, it was written about in the major newspapers today. is that really a solution to the budget problems? >> make you so much, mr. shapiro. that is a great question. it is not a solution. let me just make it clearr it did not file for bankruptcy. in emergency manager filed for bankruptcy. adam: i hate to interrupt you. we do not have time to get into the legal ramifications. the question is whether this plan would help the finances of detroit. >> no. it will not help the plan. it will just transfer a lot of wealth from the city of detroit

to a lot of his friends. it will be the most expensive bankruptcy and bankruptcy history. they are estimating $1 million. they are building $1000 an hour. no, it will not help. they are talking about kicking the can down the road for too long and creating this debt situation. it will be paid out over 30 years. we are right now looking to transfer a large amount of wealth from the city of detroit. no, it will not help. adam: i realized that the numbers are in question. if you become mayor, you believe that bankruptcy, not the current situation that detroit faces, but, perhaps, bankruptcy through a different process would be in detroit's best interest?

>> if we have to go bankrupt. that would be preferable. those are decisions that the local elected officials need to make. adam: i understand that you are opposed to what is happening right now. you have 36.2% of the city of detroit living below poverty. you have an unemployment rate that is almost that 18%. how do you turn that around? >> right. the state of michigan has lost a large number of people. we do need to bring jobs to the city. adam: how would you do it? >> what we are doing right now is not the answer.

they are getting tax abatements and they are not paying the corporate income taxes. those types of things are making it worse. adam: dan gilbert who brought quicken loans, 9000 jobs, he made the situation worse? >> i am not saying he made the situation worse. what i am saying if you are continuing to give tax breaks to people, who can afford it? why are we giving away tax dollars? it does not make sense. adam: we appreciate you being with us here on the fox business network. >> thank you so much for having me. lori: what china is doing to figure out how much that it has. adam: we will have details on the brazen heist by jewel thieves in the south of france. lori: the new talk about eddie

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dennis: breaking news. the case against former goldman sachs trader will go to the jury. closing arguments will take place tomorrow. now, as they do every 15 minutes, we want to head back to the new york stock exchange. nicole: let's start off with apple. of 1.5% right now. a couple of headlines pertaining to apple. you have bob mansfield moving around in the company. the vibrating had a $500 target. it is interesting, we know

michael dell has been on board also. no matter what happens, let's stay on the company. cheryl: thank you. let's make some more money with charles payne. charles: we will talk about saks fifth avenue. lori did the special with me on thursday. i talked about it friday morning with stewart's. we said maybe it will be taken over soon. they got a bid today. it is part lori, part delta. we will share credit on that one. wallets and brainpower. michael cores is a stock along the same line. by the stock. we actually took profits on it.

now i am thinking -- i will tell you what worried me. they will report next week. it will be the first quarter. they are in a different fiscal year. same-store sales up 45%. these are superlative numbers, but they have been trending lower. you still have to commend this growth. lori: they are not really -- charles: have you been in the stores lately? i think they are making a mistake by not having enough. the dresses they had were amazing. they sold them out in like one or two days. right now, i think they have no peers. you walk through the mall and that is one of the places where you feel genuine energy from.

michael cores was sold off. he has about 4% of the left. the company itself is on a roll. this is the third time they have been at 65 this year. sixty-five or better is monumental. adam: serious scrutiny in china. the state council made the urgent request for the audit. local debt estimated to be between 15% and 36%. chinese law actually forbids local governments to directly taking on debt. bottom line, they call it shadow

banking. lori: a reason to celebrate. throwing a party just days after his firm was indicted. jack lew on why he thinks the united states is doing just fine. just fine at reducing the nation's deficit. ♪ with the spark miles card from capital one, bjorn earns unlimited rewas for his small business take theseags to room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery [ bjorn ] just put it on my spark card.

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>> 23 minutes past the hour. in philadelphia, authorities say at least six people are injured after a rural house collapsed this morning. rescuers are searching for anyone that could be trapped in the rubble. in italy, at least 38 people were killed when a to wear -- to her bus crashed. pope francis says gays should

not be judged or marginalized and should be integrated into society. he said he would not judge praised for their sexual orientation, he did say that it is a sin. those are your headlines. back to adam. adam: thank you very much. jack lew appeared on multiple talk shows yesterday. this comes as republicans are trying to shave billions of dollars on federal spending this year. peter barnes has the latest. peter: pushing for more spending and less austerity to kickstart the economy. it is setting up a major clash with house republicans this fall. they want to keep those sequester budget cuts going, but with a different mix.

an increase in defense spending. the president is campaigning around the country for more stimulus spending and the administration says it will not negotiate on raising the debt ceiling. >> we are now arguing about the composition. they want us to build a better future for the american middle class. >> one republican analyst says there is no way they will agree to raising the debt ceiling without more spending limits. >> they are willing to lower their expectations a bit. i think we can have a mini deal this year that raises the debt limit and starts to bring entitlement spending under control, or at least starts to slow the growth. peter: the president takes his

budget campaign to chattanooga tomorrow. he will to her and amazon.com warehouse. it is adding 7000 new jobs in 13 states. adam: thank you. peter barnes in washington, d.c. lori: a u.s. judge has ruled that bernanke should testify in their million-dollar lawsuit. it is rare for a fed chairman to be deposed in a lawsuit. an exception should be made because bernanke has knowledge of the government decision to bail out aig. from capitol hill to the hamptons. steve cohen not letting a little court action get in his way. the hedge fund billionaire reportedly threw a beach bash at

his estate. it was said to be a show of support for ovarian cancer research, but was not a fundraiser. he is said to have ordered $2000 worth of tuneup for the location. how are prosecutors reacting to all of this? you'll have to stay tuned. charlie gasparino has all of the details coming up. adam: europe's top diplomats meet with egyptian officials. lori: call it a tobacco shop makeover. inside the very first e figure -- e cigarette store. dennis: the wise cracking beverly hills cop could be coming back to a theater near

you. most shares are in the red. you do have some gainers. we are back after a short break. ♪

adam: our stock rabbi, charlie brady, says investors are seeking yield. telecom services and utilities are up today. but our expert at the new york stock exchange is nicole petallides. what are you watching? >> i say thank goodness for your own charlie brady, and i'm watching here books, ticker symbol for barnes & noble. look at the shares. down almost 5%. $17.51 you say me next to the ticker symbol, see that little lf? i learned something.

the company will delay filing. that is late filing. my buddy told me about that. every day you learn something new. they will push back their statements, their financial statements because they have to look at them. there are errors with issues of accruals. there are statements over the last four quarters over the prior fiscal year. all of this comes on top of the fact, you may remember, three weeks ago, way back when, the ceo resigned. so there's a lot going on with barnes & noble. coupled with this late filing. back to you. lori: you're plugged in down there you're a fixture at that stock exchange. >> thanks so much. lori: all right, geopolitics right now, let's talk about unrest in the middle east the european union's top diplomat is holding talks in cairo after egyptian security forces killed more than 80 pro-morsi supporters. the muslim brotherhood. secretary john kerry says this is pivotal moment in egypt.

we're joined by walid farris. things for coming. share the latest perspective on the developments in egypt. doesn't suggest that the new government is moving forward. >> the new government and civilian armed an armed forces are moving forward. but they have a large problem, the single biggest problem basically the muslim brotherhood are very large organization. they're waging what they call an urban insurgency. not with big weapons but paralyzing parts of cairo on the one hand. on the other hand, jihaddists more extreme elements of the islamists in egypt are fighting a real war in sinai. this is a two-front situation for the army, for the egyptian army to handle. the one in cairo with the muslim brotherhood attract as lot of attention bit europeans and the united states because we don't want to see violence in those cities. lori: reports today that egypt is very untrusting of the united states these days. having said that first of all, do you agree with that sentiment, walid, and secondly what should the u.s. role be?

how should the president, president obama, be dealing with that latest uprising, this ongoing insurgency you're describing to us in egypt? >> there are objective reasons why the overwhelming majority of egyptians, those anti-jihadist, anti-brotherhood do not trust the united states. two main reasons. number one, the administration, their perception, has been siding and partnering with the brotherhood for many years and many months. when the change took place a revolution, backed by the army took place last june, june 30th and last week they see that washington is very hesitant to recognize the new government and continues to try to see how to help the brotherhood. what america needs to do, the administration needs to do is play a role the mediate or between the brotherhood and the government. try to negotiate a political solution. on the other hand we need to be firm in supporting the egyptian army fighting jihaddists in sinai. if we have the approach, i think we can regain the trust of most egyptians. lori: we heard from u.s.

secretary of state john kerry today. peace talks resuming between israel and the palestinians after five years of no advancement. or you could go back 20 years or a generation or a thousand years, correct? >> yes. lori: why now? why resume israel and palestinian peace talks right now? >> lori, let me give my own take what is not said. what has been said that the palestinians and israelis agreed to come and sit down to the table for discussions. we've seen that scenario, and you said it very well, many times over the past two or three decades, coming back and rediscussing, disagreeing on many things. what has happened now is a context nobody is talking about. the fact who can, who are the troublemakers who can bring down peace talks and negotiations are hamas or hezbollah. we've seen that many years. hamas is very concerned and busy what is happening in egypt. their main allies the brotherhood are in trouble. so hamas is not busy bringing down the peace process. hezbollah in north in lebanon is

busy in syria. this is good moment for both sides of negotiations. we'll see if israelis and palestinians will take advantage of that. lori: are you optimistic as we wrap up the commentary here? >> i'm sitting in the middle. really in the hand of mahmoud abbas and prime minister netanyahu. if they want to make it happen it will happen. if not it will be a complicated long thing. lori: thanks for sharing your insights, walid farris. >> thank thank you, lori. adam: we'll look to the sky for the secrets to sac's success. what has wall street buzzing about steve cohen. lori: a brazen heist in southern france, the riviera, how fancy and luxurious. $136 million. if you're going to do a jewelry heist, that is the place to do it. all these jewels are mission. the latest in the hunt for a masked man or is it "the pink panther." adam: why do you rob banks? because that's where the money is. ♪

a quarter million tweeters sic iare tweeting.med. and 900 million dollars are changing hands online. that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together.

♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. >> i'm cheryl casone with your fox business brief. fewer doctors are treating patients with medicare. according to the centers for medicare & medicaid services a number of doctors opting out of that program last year nearly tripled from three years earlier. of the doctors who haven't formally left are limiting medicare patients they will see. at some point in their lives four out of five american adults will struggle with joblessness,

poverty or reliance on welfare. that is according to the associated press. the widening gap between rich and poor and good manufacturing jobs are reasons for the trend. it is nottjust pricey air fare to think about when planning the next vacation. more states, cities and counties are upping taxes on hotel rooms and car rentals. they often trickle down to the local level, it is one way to make up for the lost revenue. that's the latest from the fox biz network, we're giving you the power to prosper. dow

adam: so how is wall street reacting to the indictment of hedge fund sac capital? fox business senior correspondent charlie gasparino will join us with more exclusive details. and, charlie, a question -- >> they're crying. you hear screams and cries. why does wall street care about sac capital? adam: that is lot of revenue for wall street. >> remember they trade, sac is an enormous trading shop.

it is 2% of the new york stock exchange volume every day. adam: a billion dollars in commissions. >> it is amazing. billions of dollars in commissions. hundred of millions of dollars in commissions every year. they are wall street's best customer. they're crying now. they're doing something else. this is what we're getting from people at these firms. what is the matter? lori: i'm intrigued. that was, i'm looking for follow-up to this, charlie. >> your face was like -- lori: a little contorted. >> like you were going to say something. adam: continuing pull money out of sac. lori: my billions, yeah. sorry if i interrupted your train of thought. >> they're looking at every major firm out there, hedge fund, wall street firm, brokerage firm is essentially examining their relationship now with sac now that they have been indicted. what do i mean by that? they're looking at trading records to get a handle how much business and what type of a business. this is interesting double hedged sword about sac. on one hand they bemoan the fact they're out of business or may be out of business soon now

they're indicted and they will not get the commission revenues. on the other hand they have to make sure they're not caught up in this in any way. they're looking at that relationship. couple things, before i turn it over to you guys. interesting thing we're hearing a lot about sac's trading techniques. looking how two companies, maybe they fly into the same, into the same hub and maybe they're doing, maybe they're basically doing a merger. they track that sort of stuff about corporate executives and their flying habits. it is pretty interesting about all the stuff sac they did, how much of an information edge or information machine it is and think we'll hear more about that coming next couple weeks. the u.s. attorney has an indictment. we've seen it but i'm telling you when this thing gets rolled out, more officially it will be a lot more stuff. we're going to know, everything you ever wanted to know about steve cohen and sac capital that you were afraid to ask. lori: it is not going away or hiding out or staying quiet? they had a big party this

weekend that made a lost news headlines. >> i saw that it was out in the hamptons and allegedly for cancer research. lori: in support of research. adam: if you're a money manager and you've got big bucks still in sac do you risk those fund? it gets confusing whether government is trying to seize all the assets of sac. >> number one on the party, let's not make, one of the things he did wrong was ostentatiousness when he settled the case with the civil case with the sec in march. adam: 600 million. >> he started buying art and homes. or announced it. people at sac said, he was, those were in the works for a while. they just got consummated at that point. that really teed off the u.s. attorney's office. like he was rubbing it in their face. lori: what about this weekend's bash? >> these guys don't like ostentatiousness. he seems to keep doing stuff

that rubs it in their face. as far as what you're saying that is interesting point. they're leaving it purely vague because they're always open to a negotiation. maybe the negotiation is, i'll tell you, given the fact they're still investigating steve cohen, maybe the negotiation is, you have to agree to some plea agreement and, you know and number is this. if you don't agree to some plea agreement, steve, number is this. remember, they left quite open. remember there were conflicting points. remember the journal said it was 10 billion. "the times" came out and said substantially less. i can go by my own reporting and i know it is vague. they keep it vague because this is part of their negotiations. adam: one other thing, the wiretaps. you're reporting they didn't really have anything from wiretaps on cohen -- >> as one prosecutor they incident have sh -- blank blank. adam: theres were big deal in court and turned over in

discovery. >> wiretaps of -- adam: the sunday phone call with the portfolio managers and cohen but there are wiretaps out there part of the evidence and introduced. >> here is the thing i would say. we don't know all the evidence they have. one of the things writing this book that i've got new appreciation is that the justice department doesn't hit you with everything all at once, you know. they roll it out. and, i think we're going to find out a lot more about zack than, and the scope of what the feds believe is a, lots of bad stuff going down at that firm. we'll find out about it in great detail in the coming months. i will tell you this, i was interviewed by pbs just now, i watch what i say. i'm careful what i say. i can't tell you whether he committed insider trading but one of the things they kept bringing up, the reporters there, you have 30% returns, you have all this evidence, it would have to be insider trading right? there is nothing else you can conclude? i can tell you -- adam: luck.

>> innocent, you have to be proven guilty and he's innocent. he says he has done nothing wrong but there is lot of people thinking how do you do this without getting that -- lori: really clever research. adam: that is the mosaic. we have to got to say, to be continued. >> absolutely. adam: all right, charlie, thank you very much. it is one of those dramas on hbo that never ends. >> yes. lori: thank you, sir. let's get you updated on the markets. jason weisberg son the floor of the new york stock exchange. the dow is off 53 points. big week for economics. we've got the fed and gdp and a jobs report to top things off on friday, right? >> the good ol' jobs number which will be revised three months from now and be meaningless. like you mentioned we have some good data points this morning. fed speak as well. i don't think anything crazy will come out of it and i think the focus should continue to be earnings and really the guidance going forward and you know as you guys were discussing the sac day time drama is there to fill

the void. lori: hey, you know, you brought up sac. curious, jason what is the feeling on the floor about that -@and all the lost business potential that could happen as a result of the indictment? >> well i think that the fallout from the loss of business from sac has probably taken place, you know, start ad couple years ago when the investigations were really first started. i would say that the real talk about the sac fallout is the collateral damage that all of wall street faces. you know, i mentioned on melissa francis's show the other day we were talking about sac and i said, you know, 99% of the wall street community abide by the rules set forth by the sec. lori: right. >> and by finra. lori: just a couple of bad apples, right? >> yeah -- lori: sorry, jason, no, you're right. jason weisberg, thank you, sir. sorry to cut you off. adam: beverly hills favorite cop back in action? >> man who claims to be on

vacation you look a lot like you're on a stakeout? >> steakout? no picnicking this is a picnic area. adam: picnicking in 1970 nova. eddie murphy reportedly signing on to reprise the role of axle foley in the third see kel of "beverly hills cop". the duo set to be written by the same duo of mission impossible protocol. it was spurred by a "beverly hills cop" tv series, which cbs passed on it. if you can believe it the first "beverly hills cop" film hit the big screen all the way back in 1984. lori: this is all eddie murphy can come up with now? adam: should redo "trading places." recast it. lori: this is first for manhattan. we're going behind the scenes of big apple, one and only e-cigarette store. adam: e sig sales are on for, on track to double last year's

results of one billion dollars this year. ♪ [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hortfolio. and with some plning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.

lori: "the pink panther" at it again? the price tag on yesterday's brazen jewelry heist in cannes, france, up to at least $136 million. that is more than double the initial estimate from police and now they may be looking into whether this theft is related to the jewel thief gang. the heist coming just days after a member of the ping panther group escaped from a swiss

prison? coincidence? we may find out, or not. adam: real quick before we disused you to our next guest, want to let you know the market is down 52 points but one of the things that's hot, that everyone is talking about, called vaping, e-cig let's. this woman opened man hat that'sen first e-cigarette store >> i run electronic cigarette company. lori: you brought one with you. >> i brought a couple. lori: they're attractive to look at. >> some are very pretty. they can be designed and customized. adam: bod line, do you get same buzz off of this over a regular cigarette? >> same kind of feeling. get a hit from the smoking a cigarette and nicotine delivery and more efficient and cleaner way. lori: what does that mean for the whole cigarette culture, the bars, nightlife, the whole thing? are people using these, pulling them out of their pocketbooks? >> they're using in bars. one of the big problems, bar

owners had to step outside to smoke cigarettes. that is not the case. because they don't make any smoke. they make steam. lori: there is legislation to prevent use of those indoors in new york? >> they have tried. could it hurt our business? i don't think it will pass because scientifically there is no justification for it. adam: the fda i think has put out warnings about this stuff but there isn't really any research as of yet. but it is nicotine which isn't essentially good for you. >> the fda warnings are based on 2009 preliminary review. they're not based on scientific published journal study. all the journal studies that have come out in the past five years show that e-cigarette vapor is not toxic. lori: a pack of cigarettes in new york city cost as lot. >> about $15. a $1.50 a pack to ususe. lori: you're opening very first store in manhattan. what is the traffic like? >> we have a store in queens. people have been waiting for a store in manhattan.

our manhattan store since we opened eight days ago has done ridiculous amount -- adam: you took an order for 15,000 bucks. that was misquote. we placed an order for $15,000. adam: gotcha. >> not arrived yet. we're almost out of product. adam: sales of this stuff will be a billion dollars in the united states. you wouldn't open the store if you didn't think you would cash in. >> that's what they say. it would hit a billion dollars this year which i fully expect. the numbers are exponential because the number about users are growing exponential. one person tells two other people tells four other people and tells 10 other people and supply is not there for demand. people want them and they're harder and harder to get because some people are buying them. lori: thank you so much. adam: we appreciate it, spike. we'll have to redo all the songs. lori: i don't think they were talking about cigarettes. adam: they weren't but anyway, has to do with smoke. lori: water covers more than 70% of the planet but rising supply issues are causing some to he

label it the next liquid gold. tracy byrnes and ashley webster next on fox business. don't miss it.

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this easy-to-understand guide will ansr some of your questions, and help you find the aarp medicare supplement plan that's right for you. tracy: hey i'm tracy byrnes. ashley: i'm ashley webster. caution ruling the day on wall street as they brace for the fed meeting coming up later this week and corporate results. the dow is off nearly 50 points after barely eking out the fifth weekly gain in a row. we'll have biggest movers for you straight ahead. tracy: plus, let the spending begin. the white house is tooting its own horn about deficit cuts but wants to boost deficit spending yet again. the republicans no surprise want the opposite. how will it shape the deficit fight ahead. ashley: ad campaigns for legendary rivals like coke and pepsi and you under the same

roof. omnicom or publicist teaming up trying to take power back from the online ad surge in silicon valley. we'll look at these deals and many more. it has been somewhat after merger monday straight ahead. there you go. tracy: sure has. ashley: time for the stocks moving a little lower. let's go to nicole petallides on the floor of the new york stock exchange. nicole? >> ashley and tracy, we're sseing the markets under pressure here, right? we've had five straight weeks of gains for the dow. the last couple weeks have been minimal gains but they have been up arrows nonetheless. the dow jones industrials still sitting above 15, 500. for all the bulls out there they're still pretty happy with the performance they have seen, down a quarter of 1% today for the dow and we have a lot of economic news coming out. fomc and payrolls later in the week. you mentioned one of the deals, there are three deals today. another would be elan. shares of elan have been jumping

parrying go will buy the firm, $8.6 billion. there is elan 8.6%. perrigo pulling back 6 1/2%. shares of elan are hitting 52-week high today. there is saks, the parent of lord & taylor. hudson's bay company is buying saks. they have love the luxurious part all the retailer has to offer coupled with, hey, some great real estate on fifth avenue. there is a look at saks up 3 1/2%. back to you. ashley: finally some m&a to talk about. nicole, thank you so much. >> we've been talking about natural gas here all week last week. natural gas prices now extending recent declines on the cooler weather. fox's phil flynn from the price futures group in the cme. natural gas has entered into bear market territory, hasn't it, phil? >> it has and the weather is the main reason. when you talk about temperatures in the record lows for the midwest this time of year, it

feels like it is shoulder season, the season where there is no demand. without the hot temperatures there is not a lot to drive demand for this market. remember too at the end of last week we built in a hurricane premium so to speak or tropical storm premium with dorian over the weekend. because dorian dissipated over the weekend, they had to cover. you get aing per reaction to the downside normally than you get. you saw the story about all the natural gas we're producing and wasting every day. the producers are producing natural gas to get to oil. they're wasting gas because demand and pipeline capacity is just not there. tracy: oil holding steady but you have the saudi prince alwaleed bin talal is issuing a warning. this is kind of cool because we're making him nervous, aren't we? >> we are making them nervous. they tried to laugh this off.

he said, yeah, let the u.s. producers try to outproduce us. they're not laughing anymore. it is very unusual for prince a la weed to go after ali naimi. he is considered the alan greenspan of opec. the guy that has driven the cartel. he think he has missed the boat on this one. he said on the warning side you have to take the shale production seriously because demand in the west is falling. there will be other alternatives in the market. they better move it or lose it or diversify their economy. makes you wonder why they haven't done it already but for years they have been in denial. time to get off the pot right now. tracy: yeah, no joke. phil flynn, the story will continue, thank you, sir. >> yes it will. thank you. ashley: major averages kicking off the week in the red as investors wait for the fed decision on wednesday. my next guest says, the market upvied, well it is limited until we get more clarity from the feds about the plans to begin that tapering.

nick sargen is the chief investment officer of for the washington investment advisors. he joins me now. nick, thank you so much for being here. i looked at your notes. you say that you are contemplating changes to your equity strategy. you believe that the upside to the market is limited. so what does that all mean to investors? what advice would you have for investors at this moment in time? >> well, very good. basically what we did about three years ago, we were bullish on the market. but of course a lost uncertainty about europe, risk-on, risk 46 off mode but when we had seen interest rates falling to record low levels we built up a high-dividend paying portfolio to compliment our traditional value portfolio and so that strategy worked well. what really has happened in the last quarter as the markets worried about the tapering is as yields rose what you saw in the stock market were some these high dividend-paying stocks selling off and that of course would be utilities, some of the

telecoms, some of the reits. so what we're contemplating is those names are also expensive. so if you do think you're moving into a rising rate environment, is it time to really trim back some of that portfolio? that's what we're really weighing at this moment. ashley: so as you get out of those high dividend stocks, where are you putting your money? do you like the cyclicals? >> yes. and i would say that in general, in our, for our traditional value portfolio, we've had two sectors we've been overweighting for quite some time. one is financials. one is cyclicals. actually on financials give then they have had a good run, we're actually taking some profits in some instances. but, the cyclicals we're sticking with. but here's the twist. before i would have said it was predominantly u.s.-based idea. the .s. econnmy was gaining traction. what i think we feel now though is, as we looked at data for europe, we're seeing signs maybe it is emerging from recession

and clearly japan is doing better. what we're looking for is some cyclicals that give us more exposure to some of the overseases markets we think are beginning to improve. ashley: with regard to the fed, nick, i don't know whether we're expecting anything earth shattering this wednesday but what do you believe we'll finally get them to taper back on qe and how will the market react? has the market already built it in? >> yes, i would say nothing for this week. if the fed begins tapering i think it will be in sent. the market priced that in. so that wouldn't come as a shock but let's be clear again. what do we need to see? first of all, the economy, it is not the growth rate of the economy. as you know when we get numbers for the second quarter, it didn't even make 2% of the first half of the year. ashley: yeah. >> i do think it will do better second half but not as much as the fed but i think the real thing will be the jobs reports. we'll get one on friday and again in august, at the

beginning of sent and i think that the key question is, can you still see payrolls about 200,000 per month on average? which is what we've done. if so, my bet would be sent. ashley: quickly on the s&p, you know, we're right around that 1686 mark right now. where do you see it ending the year? >> you know, maybe a tad higher. our calculation of fair value is in the 1700, 1750 range. so it may have a little bit further to go but i think in the time being i think we consolidate. ashley: very good. great information. nick sargen, thank you so much for joining us. we appreciate it. tracy: all right. we've got a lot more ahead this hour including a $35 billion deal shaking the advertising world to its core. we'll hear from one rival betting upped from first to third. ashley: another d.c. battle approaching leaving barranquilla, telling us what this leaves for the recovery.

-- nariman barranquilla. oil prices we talked with phil flynn down a little bit. it was around 10bucks a barrel. now it is down to 104.52. we'll be right back.

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how did he not see that coming? what's in your wallet? ashley: treasury secretary jack lew claiming the white house, well, it already achieved all the deficit reduction that it intended but republicans looking to shed billions more in federal spending. now there are big questions whether both side can actually reach a compromise. hmmm. peter barnes in washington, d.c. with the details. peter? >> yeah, they're kind of far apart right now, ashley. in part because the president and his treasury secretary are pushing for more spending, less austerity to try to help the economy and job creation. the administration's campaign is setting up a major battle with house republicans this fall over the budget and raising the debt ceiling. republicans want to keep those sequester budget cuts going but with a new mix, with an increase for defense spending and less spending on non-defense.

the treasury secretary said that washington has accomplished roughly the amount of deficit reduction it has been seeking last couple years and the president rejects this republican approach and won't negotiate on the debt ceiling. >> congress has to write bills that meet the challenge that the president set forth to start investing in our future and congress can not steal from domestic priorities to fix problems that across-the-board cuts caused in defense. i think the right solution would be to get together to have a sensible set of alternatives to replace across-the-board cuts that were never meant to take effect. >> analysts note that secretary lou did not say that the president would reject a debt ceiling increase that includes new spending cuts elsewhere in the budget. >> i suspect that the secretary in his years of experience in washington recognizes the drawing a line in the sand that says only a clean bill will be signed would be totally foolish.

he will absolutely need to be open to a debt limit increase that involves some other policies at the same time. >> the president takes his budget campaign on the road again tomorrow to chattanooga. ashley? ashley: all right. isn't that the train, the chattanooga choo-choo? peter, thanks very much. appreciate it. >> it was a song too. ashley: chat miga choo-choo. tracy: i will not. he will. how about that? as white house and republicans dig in over the debt ceiling and spending cuts what impact will it have on our very fragile economic recovery? let's bring in nariman behravesh, chief economist at ihs. this is like day. >> view all over again. we probably had you here last year to talk about this. now we have you here again. have they done anything differently? >> answer is no, unfortunately but the good news the rest of the economy outside the beltway

has gotten so used to this it is like, here they go again. i suspect unless they do something really foolish, there is always a chance of that but the probability is fairly low, that it is probably going to be a non-event as far as the rest of the economy is concerned. in that sense i'm not tearily worried about it. i don't think it will be a repeat what happened summer of 2011 where there was horrific debate which then caused the stock market to swoon and all that kind of nasty stuff. i doubt we're going there. tracy: we all remember that but you actually think they have made some progress on our deficit? >> absolutely. if you add the spending cuts that were put in place in the summer of 2011, you add the tax increases in january, you add the sequester and look at it over 10 years the budget savings are about $3 trillion. that's huge. that's about what it takes to stablize the u.s. debt ratio. instead of it rising it is going to stablize around 75% of gdp that is the debt held by the

public. that's progress. now more could be done, no question about it but i think what's been left on the table is tax reform and entitlement reform. nobody's touched the stuff. that's out there. it's a ticking time bomb. we have to deal with it. they haven't done it. tracy: but they won't either, will they? it is political suicide if you bring it to the table? you won't get reelected because someone at the end of the day will get hurt. how will we ever fix isn't again we'll have you back this time next year and have the same conversation? >> the reality people have been hurt. the sequester has been hurt. i don't think it hurts the criteria anymore. let's have sensible hurt instead of mindless hurt. tracy: what do you think about, anything going to come out of this fed two-day meeting? are you expecting to hear anything different? no? >> i doubt it. not this meeting. they won't make a decision at this one. they need more data on whether or not to believe the jobs numbers as your earlier guest was saying or to believe the gdp numbers which are going to be

weak. we know that so we're getting these sort of mixed signals on the economy. they're not quite sure what to do yet so they won't do anything. tracy: one of the things in your notes before i let you go you said stop the fights. something i say to my kids every day. eventually my kids stop, mainly because i threaten dinner. i will not feed you. maybe that is what we need to do in congress. no one is stopping the fighting. that will continue to get worse as well, won't isn't. >> absolutely. we should stop paying them until they come to a sensible agreement. tracy: there you go. >> that is probably the way to handle it. tracy: i love it. keep food and paychecks on the table, everything. nariman behravesh, thank you for being with us, sir. >> thank you. tracy: hold something over their heads. ashley: vote them out. there is always that too. tracy: how come nobody is doing that? i don't know. ashley: it is quarter past.% we can't solve washington but nicole petallides on the floor of the new york exchange. she can solve these markets every time, nicole. >> or at least we can try, right? let's look.

dow, nasdaq and s&p are all lower. we have five straight weeks of gains for the dow. still sitting above 16,500 which is good news for the bulls. s&p down one quarter of 1%. we've come down off the lows of the day. the drug index turned into the green. that is good news for drug stocks under their belt. look at amazon gain ad lot of attention throughout the day. last week they came out with quarterly reports. hit a new high last week but today down 1.6%. there is big news on amazon. they are adding 7,000 jobs. 5,000 in the u.s. fulfillment center. another 2,000 for the customer service network, all to meet customer demand they are working on. two-day service is in coming up for amazon. one day service may be in the light so they have been doing some heavy spending. that cut in their quarterly numbers. this is big news. ashley: certainly is. nicole, thanks so much. we'll be back with you at the bottom of the hour. tracy: coming up we'll tell you how government support of

alternative energy is actually jacking up the cost of your burgers and fries. ashley: it is an outrage but let's take a look and see how the u.s. dollar is moving right now as we head to the break. somewhat of a mixed picture. the dollar is up because the euro is down against the dollar as is the pound. canadian dollar is up. you can see the picture. mixed day on currencies. we'll be right back.

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>> at 20 two minutes past the hour, i'm lauren green with your fox news minute. president obama says he welcomes the israeli-palestinian negotiations as promising step forward and hopes both parties will approach negotiations with good faith, determination and focus. the secretary of state john kerry named former u.s. ambassador to israel, martin indyk as the position envoy to the israeli-palestinian peace talks. after a five-year stalemate both sides agreed to two days of meetings in egypt. supporters of mohammad morsi were killed over the weekend in clashes with police. more than 260 people have been killed since the military forced out president momo homed morsi in italy. at least 810 people were

killed and injured and the passengers were returning from a pilgrimage from a shrine in southern italy. those are the headlines. i'm lauren green. back to ashley and tracy. tracy: thank you, lauren, very much. that time of day. got to make money. charles payne is here this hour. he will talk about earnings season. trends, stocks to look into. what have you got going on? >> we talk about earnings all the time so we want to go behind earnings. every day this week i will talk about different messages from this earnings season. tracy: cool. >> today is all about, they love america. the rest of the world loves our stuff. it is so weird because we become more down on ourselves, everybody else is i want to be like those guys. i want to look at earnings coming out already. last week we had harley-davidson, we had whirlpool and dow chemical. we had an update from new skin. look at boards we have for you. north america, middle east and africa, not too impressive there. harley at the top is a stock i will talk about specifically.

europe is still in trouble. the dow was off 6%. nu skin is off 3%. look at parts of the world absolutely on fire and why this benefits our stock market. a lot of people don't look at this. acre sharks demand for harleys up 12%. latin america, up 39%. dow chemical 3% and 11%. this is gigantic stuff, guys. just absolutely huge. i think it will keep going. a stock like harley-davidson not only have they become smart in america, last year in 2012, their sales were up with every demographic. in fact every demographic grew twice as fast as the traditional demographic. white guys over 35, women, blacks hispanics. that is amazing. they're doing smart things at home but tremendous demand overseas. tracy: is this a consumer products play? caterpillar came out and basically downgraded the whole world and global demand is coming down. ashley: they did. >> caterpillar is more of a china construction play almost

specifically. last week chinese government said we're not even going to build anymore government buildings for five years. have you seen some. buildings they made? they made, they have redone versailles. these things are empty. ashley: nobody in them. >> that's more, that is almost a very specific play, caterpillar, chinese construction. but i'm talking about the rest of the world loving our stuff. last week mattel sales in america down 2%. internationally up 4%. they want barbie around the world. they want american girl around the world. tracy: yeah, well. >> this is one of the themes. tracy: they don't like how tiny their waist is. >> she is technically anorexic. we need to remember this when people are down on the markets. bleed into politics. people say, hey, the market is up. these companies should pay higher minimum wages and things like that. they're not up because the american economy. people don't realize that. and investors and politicians. ashley: thank you, charles.

barbie on a harley, how about that? if you're a fast-food, junkie you might notice you're paying more for your favorite meals. popular chains including mcdonald's and wendy's say corn-based ethanol is to blame. fox news's william la jeunesse is in l.a. with heartbreaking details. william. >> here is the question, 40% of the corn grown in america is a, exported, b, consumedded by cattle or c, eat ben byple? none of the above. it goes into your gas tank. corn based ethanol is destroying cost of foods. during the 1950s prices began fell. then feds mandated ethanol 5%, 10 10%. scheduled up to 15%. problem is drives up cost of food and ruining margins and affordability of fast-food which wants law makers to put the brakes on the ethanol mandate. >> prices are up across the board because corn is in

everything. corn feeds cattle, chickens, pigs. so, everybody gets, everybody gets that price passed on. >> corn mandate also drives up the cost oo other crops like soybeans as they compete for farmland but the ethanol industry blames big oil for the rise in transportation costs and they say that any link to food prices is overstated. >> we absolutely believe that the chain restaurants are trying to pull a superrized whopper here because there is just no way that ethanol is driving food prices. >> well, last week lawmakers held hearings. oil and food companies want to see the ethanol mandate eliminated. farm lobby likes the mandate because it keeps commodity prices high. appears neither side won outright, ashley, but congress may delay that 15% higher blend rate and that vote should come in the fall. ashley: interesting stuff. arguments on both sides. fox news's william la jeunesse

in l.a. thank you so much. >> either way your burger is going up. ashley: bottom line, whoever is to blame. tracy: costs us more. coming up, the nat-gas boom is on but a new report finds hundreds of millions of dollars being wasted. no surprise. liz: is all over the story -- lizzie mcdonald. ashley: look at winners and losers. dow is moving lower. we have winners today. limited brands up 3.57%. d.r. horton, the homebuilder, up nearly 3%. we'll be right back.

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ashley: it is 90 minutes until the close. nicole petallides down the nyse. nicole: at this point, we are down just 20 points. that really is not much at all, especially for the dow back and move quickly. right now, the dow is to the downside like the major averages. i know we are in earnings season. herbalife off 2.2% as we continue to watch. the heavyweights have battled it out over herbalife. we will continue to watch what the real numbers are coming out after the bell today. back to you. ashley: thank you so much. do not miss the complete coverage on after the val at

4:00 p.m. eastern time right here on fox business. tracy: the surge in u.s. oil and natural gas production. today, a new study shows much of that new natural gas is going to waste. what? elizabeth macdonald is here. >> it is burned. it is wasted. they do not have the pipelines to deliver it. it is too expensive to deliver it by truck. it even operates. what we are seeing is the u.s. ranks in the top ten players in the world.

>> you can see it from space. that is lived as brightly as minneapolis, which has the lowest jobless rate in the country. the problem is, essentially, 9000 wells are now drilled in that field. the problem is, those numbers are set to quadruple by 2030. they have this big problem on their hands. either they build these pipelines or they do more flaring. ashley: it looks like new york. it is so bright. >> they are saying they do not want to have to burn it off. they want to build the pipelines. it is very expensive. tracy: we talked about this last week. they are trying to export it. everything needs to move faster

in order for this to happen. >> yes. the pending fight, as you continue with your shell boom coverage. this is the fight that will be covered in the next few months. ashley: thank you. tracy: thank you. ashley: coming up, detroit hopes to dump billions in retiree health care costs on the government. you will not believe this story. coming up next. ashley: tracy: checking on your ten and 30 year treasuries. the dow is down 21. we will be right back. ♪ ising to the challenge.

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♪ >> i am lori roff in with your fox business brief. the former goldman sachs trader is accused of misleading investors. the case is one of the largest a federal judge ruling bernanke

should testify in a lawsuit over aig's 2008 bailout. he was a essential figure. bmw rolling out the production version of its electric vehicle. the model represents the first electric car made entirely of electric fiber. that is the latest from the fox business network. giving you the power to prosper. ♪

ashley: a new plan to help it rated detroit. readers are looking to shift retirees to young out of healthcare plans and onto the new obamacare health exchanges.

here to discuss this judge andrew napolitano. can this happen? >> when the bankrupt files for bankruptcy, we are not talking about a creditor, a case where they admit they cannot place their bills anymore. they face everything before a judge. the judge can change who owes what to whom. they can change any contractual obligation that detroit has. one of the laws that detroit has to obey is obamacare. it requires a certain minimum level of healthcare provided to its employees. even bankruptcy, i would argue,

i will tell you why in a moment, is not the route out of obamacare for detroit. the statute is silent on the municipalities. this is new territory for this federal judge. michigan's republican the letter, snyder, rejected the exchanges. the feds are required to come in and operate. tracy: federal taxpayers. the state cannot tax anymore. there are no residents to tax. >> you are talking about the city now.

michigan is not running that exchange. tracy: who are these taxpayers? >> us. the people who are watching. the supreme court said this is optional. you cannot tell the states how to spend their own money. the feds are paying for it. basically, we are paying for it. this is a real, liberal, democratic constituency in this community now saying we do not want to live by and under a statute that five years ago we were championing. stockton will try to do the same thing. the bankruptcy judges will have

to change the law. the law as of this moment is they cannot relieve the bankrupt of the obligation. they can only relieve the bankrupt of the obligation to rely with contracts before the time of the bankruptcy like a pension agreement. one so good that you would retire before you are 62. tracy: the good news is, they will still have healthcare. >> one way or another, they will. ashley: judge, thank you so much. appreciate it. tracy: it is being called a merger of equals. just how equal? the biggest ad holding company. dennis kneale here with the

details. dennis: the second largest ad holding company and the third largest, that would raise past the current number one. the ceo spoke with us in the noon hour about the deal. he called it a merger of on equals. take a listen. >> a tremendous feel for publicists. it is described as a merger. 8 billion, $9 billion of revenue. the merger of equals rarely works. dennis: he says he has already started calling clients of both

firms. coke and pepsi, samsung and apple among them. murray's leavy pushed because he had no other successor. these guys will have to make it work for 2.5 years. that is if the deal clears antitrust cops in washington and europe. while that number to join with number three in advertising? the firm with the most to lose here maybe interpublic group. almost 5% today on the news. the exit strategy was a deal. it may now turn elsewhere.

tracy. tracy: wow. this is like "as the world turns." [ laughter ] is for sure. let's had that down to the new york stock exchange. jason weissberg joins us now. i guess we are waiting for the fed on wednesday. the general consensus is we will not get anything new. >> this seems to be a pattern that we had last week. to me down quite significantly and then we seem to drift our way up towards the end of the day. it is very interesting. we had a bunch of mergers. these mergers are very encouraging for the market, in addition to the earnings we are

seeing. there are a lot more to come. this is very encouraging for a bowl market view. ashley: thank you so much. appreciate it. it is encouraging. people actually doing something with that cash. tracy: thursday for a new investment? some are voting on water. ashley: first, take a look at some of today's winners and losers on the nasdaq as we head to break. we will be right back. ♪ the boys used double miles from their capital one venture card

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tracy: warner may be one of the most abundant commodities. the price will rise two-three times over the next five years. joining us now is a look at how you can invest in water. not a drop to spare. >> it is really not the cleanliness that is the issue. it is the economics. the price will go up, like you said. tracy: i found really interesting things in your notes. >> the single biggest user of water followed by or alongside

generation of power. tracy: i had my sprinklers on this morning as i drove to work. i am watering the grass. >> the reality is we use very little water for all of those activities. it seems like a lot, but we use very little. making it to generate power, manufacturing things like semi conductor products, healthcare products, those are the much more crucial elements to focus on. that is where the much bigger uses are. tracy: we have been talking about fracking here all last week. what is the problem? why can't we get to this water? get to where it has to be.

>> to be fair about it, the biggest issue is we are used to paying next to nothing for water. we have not managed to come up with a way to adjust our thinking that water will cost a whole heck of a lot more. that will mitigate the way that we do things. that is why we have these problems. a booming area, although most people think it is a process for the future. oddly enough, to the surprise of most people, the united states is the second biggest market in the united states. most people do not know it. tracy: i did not know that. let's talk about how you can make money on this. if i invest in a company that is involved in the infrastructure, that is a pretty good way to do this; right?

>> yes. we will spend a trillion dollars over the next 20 years to improve this aging infrastructure. all of those are out there. some are recognized. most are neglected from the investment community. tracy: you also have the companies that make all the piping and pumps and things like that. >> yes. tracy: people are looking to invest in this water so-called shortage, how do they do it? >> if you forgive a shameless plug, you called me. you focus on the companies that make up the integrated aspects of the industry. one of the mitigating factors of the growth of the industry is it

tends to be views as an expensive process. generally, you are pumping water through high pressure to end up with clean water. a company, again, by example only, energy recovery in the bay area of california. there is also an enormous market for membranes, that is the filtration aspect. pumps, poems that pump the water under those things. piping systems themselves to move water into various areas. lastly, irrigation to grow crops. tracy: we have put a bunch of stocks and etf up as you were speaking. thank you for coming to tell us your story. >> thank you for having me.

ashley: a nice, make you feel good story. taking home a million dollars after winning the canadian open this morning. he is giving some of it to the wife of hunter mayhem. his wife went into labor. he made it there just in time for his daughter's birth. he thanked his wife are going into favor. yes, he promised to send a very nice baby gift. tracy: the baby's name is zoe olivia. said the baby something big and expensive. ashley: he is a very nice guy. a great guy. a happy story. tracy: merger monday. one creating the world's largest advertising agency.

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liz: manic merger monday. three deals. one between two madmen creating the world's largest ad agency. archrivals under the same roof. what is the fallout and what does it say about entire advertising industry? down to the wire for time warner cable and cbs. what the black of the number one prime rated network in new york, dallas and l.a.? what would that mean for the media companies and their shareholders? and we're about halfway through earnings season. who is crushing it, who is getting