Hello Moto-X: Street Smart (08/01)

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Aug. 1 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)

It comes back to their core with toyota.

You are the camera, the pre-is, the altima, -- the prius, the altima, they are up a big gains.

Some of it has been the yen.

Nissan has cut their product.

The new accord is fabulous and selling well.

Jamie butters, thank you for joining us.

We will be back on the markets in 30 minutes.

Hello -- the new gogol phone launches today.

The see -- the ceo of motorola tells us why it could change everything you know about the smartphone industry.

And snowden the slips out of the moscow airport.

The world's most wanted man takes shelter in russia, but just how long can vladimir putin protect him?

Plus, the professional pledge.

This might be your last chance to buy into linkedin before other social networks move in on its terror.

-- move in on its turf.

From bloomberg world headquarters in new york, this is "street smart" with trish regan and adam johnson.

We are near session highs right now -- and upbeat and you factoring in job status at the s&p above 1700 for the first time ever.

Welcome to the most important hour of the session.

We are scouring every market for your last trade of they adverse trade of tomorrow.

Another record.

And what a perfect recipe for investors.

We have growth and they said that is going to buy.

A perfect recipe.

Let's look at the big picture because that is laying out across a number of different markets.

There it is, up 130 points on the dow jones industrial average.

When you factoring jobs are better and central banks around the world are playing sugar into these markets.

Take a look at the 10 year because given the combination, higher yields are what you would expect great up 14 basis points , that's where the ten-year is is today.

Curiously, the dollar moving up.

Typically when you see bond yields move up, you might not see the same kind of reaction in the dollar area -- in the dollar.

And now the big stocks would need to be watching as we head into the close.

Julie, what are you watching?

What start with cbs.

The stock is trading at a third senior high after reporting profits that rose by 11%. they see rising revenue but they are still having trouble with time warner cable.

I was crunching the numbers since the s&p -- since the s&p 500 low.

Cbs is the third-best performer, the stock up nearly 1680%. the gains over the long term.

Number two today is sprouts.

This is an ipo -- it's a good day to come public in these markets.

This is the biggest ipo since linkedin in terms of first-day performance.

The organic market raised re- hundred $30 million in its ipo at $18 apiece.

It is majority owned by apollo global management.

And a little bit of a down there today because this is a big one -- exxon mobil, the company falling after missed estimates by the widest margin since 2002, and 18% this in terms of what reported versus what analyst estimated.

Profit on various types of fuels is down.

Half it from producing oil and natural gas is down 25%. profit from chemical production is down or g-8%. -- down a 48. hardware warfare -- google just unveiled its new android smartphone, the first motorola mobility product developed completely under google's titans after google bought that could money for $12.5 billion last year.

It's a big gamble for google in a market currently emanated by samsung and apple.

Is there room for this new phone?

We have a bloomberg contributing editor, the principal at software capital, and our tech guru.

Sam, you happen to have one of these phones handy.


Three cool.

-- pretty cool.

It looks a little like an iphone.

It is actually rather attractive.

Nothing very offensive about it.

That is a white, a direct assault on apple.

There is a black version, white version, but most interestingly, they're going to have a website where you can customize the back and front in accent colors of the phone and have it shipped to you in about four days.

That is kind of cool.

They are taking a page from nike who was doing this from sneakers or mini-cooper who is doing this.

They want to bring that to the smartphone.

When the song goes on sale, it will cost about $199. it will all be built down and forward texas.

They will be assembling these at -- entirely in the united states.

They bought an old nokia plant in for work and refurbished it.

While the components are coming from the other parts of the country and internationally, it will be assembled there.

They did that so they could do the short turnaround time for custom orders which they think might make up the majority of the sales.

You've had a chance to play with it.

What do you think?

It has some nice features and good integration with google services.

One would hope so, given that it owns motorola.

You can twist the camera and it turns on -- sorry, you can't twist the phone and it opens the camera.

It has some other clever innovations.

The problem is, there have always been very promising smart phones that look very good at the launch.

The palm three look very nice.

We know what happened to that great hewlett bought it and we are still unaware of what they did with it.

The new kia -- the nokia lumina is struggling in the marketplace.

Can motorola and google breakthrough?

It is important that they break through.

What is at stake?

It is important that they break through.

There are a bunch of conflicting forces going on but fundamentally, this is about google trying to say there is an ecosystem of people building products around android, but what we want is our own experience because we see the market going in favor of apple and if we don't ship our products, we run the risk of falling back.

They look at the customization being done and they want war control over the user experience.

These customizations are just part of it.

What's happening is google is pushing the idea of low-cost sensors on these devices, so they are much more state aware.

It knows you are in your car or in your house and knows more about what you're doing because the next title front on phones is the place you are inside.

Does it know you are in your car and how does it behave?

That's the next front.

What would that look like?

The difference between in your home versus in your car.

What would a phone do differently?

On a trivial level, you see when you're talking on the phone and you get in your car, it flips the call to bluetooth.

Imagine instead most of the information you have been searching for on yelp or in the case of google, zagat because yelp is anathema.

You are searching for that and it would immediately pop up on your in car display.

More and more of the information on your phone is transparent in terms of popping up in whatever environment you are in on whatever display is handy.

That is what chrome cast is about in the home and by taking this approach, google is able to do this kind of engineering itself and start out with trivial customizations and rapidly move toward making the device come more transparent.

Lex -- what could it potentially mean for google?

The most important piece of has to take care of is making sure elders are building applications that are exclusive to google and android so that everyone in the world can have these connected device kind of experiences.

So these are the ones you see in your car when products like smart things go in your home and the lights go on.

That's not just on the software side, it's on the hardware side.

By creating this enormous community, they can have this customize hardware for business enterprise applications.

And then you get the ad revenue.

That has always been the google brand strategy, get more people on the mobile internet, searching through google and sell ads again.

The problem has been most of the money in mobile has been made in hardware.

So google has been doing this bank shot, we will make android and that will get more people online.

85% of their revenues is coming from advertising.

It's basically a media company.

You could argue this makes all the sense of the world because it's a whole new business.

85% of their revenues come from media and advertising.

90% of the products in this space are either apple or samsung.

Everyone else is competing for the other two percent area -- other 2%. the first decade of the pc industry, all of the value was created in hardware and the next 10 years, virtually zero.

You will see the exact same phenomenon play out on the phone.

From now on, all the value in this business is it layered service and software and the hardware will be an afterthought in the commodities.

We are going to be watching this one carefully.

It is very cool.

Thank you so much.

Good to have you on.

We will have more on the moto x when we talk to the ceo of motorola mobility.

Less edward snowden find asylum in russia.

How long can bottom your putin attacked him?

We will be right back.

? motorola mobility, the company google bought for $12.5 billion last year has just unveiled its newest device, the moto x. jon erlichman is at the event of a by with the motorola mobility ceo.

Take it away.

Thanks a lot.

This is a big day for motorola.

One of the first big products since the google acquisition.

You were saying earlier today that when you came aboard, you had this blank white board where you say we have an opportunity to start fresh year.

Do you think with this new product you got you are in a position to revolutionize the smartphone business?

He certainly think we are going to make an impact.

We are challenger but we've solved one big problem.

With smartphones, you typically have to use your finger.

You can't use your voice.

With what we call touchless control, you can speak to your phone and it will respond and call your mom or navigate wherever you want to go.

You can search via voice with no touching the phone.

That's one of the things we saw with smartphones one year ago.

Getting access to the camera faster, i want to know how you are going to measure success with a product like this.

When we look at stories like this and watch them unfold, we say they've sold this many phones in this time, thumbs-up, thumbs down.

How are you measuring success?

You have to look at the big the cure of what does motorola mean for google?

Motorola has made investments in technology trends that will last for a long time.

If you think about people in markets like india, they are going to get connected to the internet first time on a mobile device.

Google is a technology and we are about scale.

Success for motorola is affecting the lives for the better of tens of millions if not hundreds of millions of people.

That is what google does.

Let's talk about pricing in the u.s.. how did you decide on that price?

Theoretically, you could have been bold and gone with a lower price to send a bigger message of what you are able to put out there.

How did you decide on that?

The carriers actually decide on the size of the device.

What we believe is its competitive with the other flagships that are out there.

As a larger screen, faster processor than the iphone.

It is customizable by the consumer.

The only phones you can get are in black or white.

You can build this phone and from combinations.

This one is made of teak.

Wood is hot and these are fashion statements.

By giving the consumer the option to customize the phone, that's owing to be fun and interesting.

You go to the site and you can play with all the colors.

It's an interesting innovation.

What about the cost?

There's a lot of talk about the marketing dollars behind this product.

Some have said upwards of half $1 billion.

What can you tell us and how are the marketing dollars shared between google and motorola?

First of all , in this market, we have seen time and again what matters is the product.

Build a great product and market it well and you'll be successful.

If your product is good, it doesn't matter what you spend on marketing.

We are going to sell the product can't market the product and be in every major u.s. carrier by the end of this month or early september.

And we are going to have to be scrappy.

We are doing a lot with social media.

There's a huge buzz on twitter and facebook about the product and we are going to harness that buzz and thirst for something different it's more personal to the consumer.

We think that's going to be successful.

That is a big change for motorola.

Talk about where this is going to be around the globe.

What guidance can you give us on with the rollout is going to be?

Us is the beginning of new motorola.

We have a whole portfolio of products that are coming.

One area that's interesting is the value segment.

If you think about the next generation of smart phone users, they are in places like india or russia and eastern europe.

Something like 2 billion people will switch from huger phones to smartphones.

They need devices that save them money by saving their data cost.

We will have something out there by the end of the year that will be a little product that we are excited about.

The technology that allows the phone to know where you are at, do these guys want to make wearable devices?

Wearables are interesting.

There's a lot you can do with headsets that are less geeky than the current approach to bluetooth headsets.

Wearables are something we have been investigating.

Let's talk about the google - motorola relationship.

I think some people are confused about how they share and how much talking goes on between the two sites.

Android, which is the operating system we use is the worlds most popular operating system, used by by 100 different device makers.

We are a key partner of android, but there are many of them.

Android treats everyone the same.

We are treated no better or worse than someone like samsung.

We get access to the code at the same time.

Google ownership has its benefits.

We can't take much longer term that many companies can.

The mandate larry page has given us is get us back to our roots of innovation and deliver stuff that really matters.

The assembly of these products at a facility in texas, there is a big made in america story here.

You shared a few numbers on how many jobs could be created from this trade are you sensing you may have to revise those numbers on how any people should be at way to do this?

Our plans for this summer is to hire 2000 people from literally nothing.

But as the product takes off, that ever could go up.

Thank you for sharing.

Here with the launch of the moto x device.

Thank you.

Coming up, edwards noted has left moscow's international airport.

Where is he heading next?

And we are getting professional on linkedin, coming up.

? we have breaking news in the trial of the former goldman executive now facing a number of charges at the courthouse in the southern district of manhattan.

Su keenan is there live.

What can you tell us?

We now know after days of deliberation, the jury has reached a verdict.

We don't know what the verdict is, so shortly they will be filing into the federal courtroom and announcing it.

We know the jordan -- the jury foreman is a former retail broker and they have sent three questions to the judge so far.

A judge answered the questions and have reached a verdict against the former goldman executive who faces possible banishment from the securities industry if found liable on the seven counts the jury is shortly to announce.

We will continue to monitor this and break-in as we have results.

We look forward to hearing back if there is any development.

Time for today's global outlook.

Where in the world is edwards noted?

We know the international fugitive has left the moscow airport.

Where is he in russia?

He cannot leave russia.

It's interesting.

He wanted to prove we don't have enough privacy here or that the u.s. government puts us under survey once too much, and then he decides to stay in russia for a year, someplace with more surveillance than anywhere on earth home and he just came from hong kong.

He was in the airport for 39 days and was finally granted one-year asylum.

The really interesting thing as far as global politics is concerned is that president obama was looking to have a summit with vladimir putin at the beginning of september, his first trip to russia since putin was elected.

Listen to what the white house had to say about this asylum granted.

We are extremely disappointed the russian government would take this step despite our clear and lawful requests in public and private to have mr.

Snowden expelled to the united states to face the charges against him.


snowden is not a whistleblower.

So he says mr.

Snowden is not a whistleblower, he is someone who has committed a crime, not a dissident.

It is interesting though, today we had the results of a quinnipiac poll.

American voters 55% say that he is a whistleblower and not a traitor.

It is the age of wikileaks.

I guess everybody thinks it's cool.

Grabbed your suit and tie.

We are getting professional -- three ways to play linkedin before earnings cross.

? before there was facebook, there was linkedin.

Before facebook blew away wall street estimates last week, linkedin had and eight quarter success streak.

Every single report that went public since may of 2011 has been perfect.

Shares of the social network are up 80% this year and not one analyst that covers this stock says to sell it.

So it may be time to forget about the facebook buzz and buy into something a bit more professional, shall we say.

We will see what our panel says.

First, to doug.

What do you like most about linkedin?

Linkedin was the neglected younger brother of the social networking world and is now very much the star.

Shares have quadrupled over the past couple of years since going public and it has three sources of revenue.

It relies on recruiters, advertisers, and paying users.

It's getting people to spend more time on the site and put more and data into the site and that is driving all of those channels of revenue.

You mentioned how they are putting more content on the site so they can get people to stay longer.

I have experienced that myself erie it i'm one of their influencers and they asked me to contribute some piece of editorial comment.

It's something that they do with roughly 150 of these in florida sirs -- these influence rs.

Is this a strategy you think is working?

I see improving trends as far as engagement for linkedin.

This is probably the best business model and the social networking site base of the newly minted public companies and they've done a good job of outperforming expectations since coming public.

What do you think is going to happen?

You might be the one lone wolf in this group.

You have a bearish that on the company right now.

I do, and i think it's important to point out that when you have a stock like this that consistently beats, people get addicted to it.

You've got a company where expectations are high and the whisper number is above wall street's consensus.

It is 98 times 2014 earnings, so it has to do something to justify it.

There is a lot priced into perfection and it might be a good time to take the other side of that area what i'm going to do is sell a weekly call spread where the volatility is really high and then buy a regular august put against it.

If you sell the 235 call spread, it's a short spread.

Use some of that premium and by the august 180 put.

If the stock sits or moves at all, it should pay off nicely.

Rex matt brings up an important point.

If something can be priced for perfection, what happens if they falter?

Is there a danger in that?

They have all of the fundamentals working right now.

I think you will be looking for what kind of new areas we can expand into.

If you look at what happened with facebook, when that company blew away expectations on mobile, saying 41% of its revenue is coming from mobile, there's a high expectation to talk about strategy in mobile.

We have some breaking news we want to get to.

We do have a verdict in the fabrice tourre case.

Su keenan has the news for us area the jury is coming in --fabrice tourre is liable for misleading and committing securities violations in what has been the sec's biggest case involving fraud since the financial crisis in 2008. this is a major victory for the sec area they have lost a prior case a year ago against citigroup's had of ceo transactions.

A lot was riding on this case which was led by the sec's lead attorney.

We know that the jury foreman in the case was a former retail broker trade three times today, the jury foreman sent a note to the judge asking questions, specific questions having to do with liability.

One of the questions had to do with whether or not tourre was rewarded as a bonus.

And if that had to be proven for the alleged illegal transaction.

They said that they would have to find that.

And the has come in with a liable verdict.

A major victory for the sec.

Thank you thomas su keenan, down at the courthouse in southern manhattan.

Get your last trade him before the bell because linkedin is not the only company reporting today.

Activision and kraft foods our reporting after the bell.

But first, uruguay's pot restrictions might go up in smoke.

We will talk about the global economic ripple effect of legalizing marijuana.

We will be right back.

Uruguay's marijuana restrictions are one step closer to going up in smoke.

The country's lower house just approved a sweeping bill to make pot legal, provided the government is the one controlling and dealing the substance.

And it looks like the senate is set to sign it into law.

Advocates for legalization say government regulated hot market has the potential to reduce crime and make money for uruguay and serve as a model for other countries.

Maybe even the united states.

Joining us via skype from uruguay is from the drug -- is a member of the drug policy alliance.

Start by explaining to us how these state-controlled marijuana markets would actually work.

Enqueue for having me.

Uruguay -- thank you for having me.

If uruguay approves this bill, it will be the first approving the recreational use of marijuana.

[inaudible] not just consumption, but it would regulate everything from production, sale, and the government would be the regulatory agency involved in all of this.

The original bill had the government being a producer of marijuana, but over the years, the drafting of the bill has changed and now it is a right company called the national institute of radiation control of cap.

The government ultimately will be controlling the sale of all of this.

Is this going to be a very large is this?

Are there people who stand to make a lot of money?

It will be a large internal business because in uruguay, marijuana is the most commonly used recreational drug.

After alcohol, tobacco and pharmaceuticals, around 20% of the population has said they have tried it once in their life.

If marijuana use was to be decriminalized here, it is socially accepted and there will be a big internal market.

There won't be -- they won't be able to export.

The licenses will only be for uruguay.

So that is interesting.

If an american goes to uruguay, could they be arrested for using pot?

They can't the arrested because it is already decriminalized.

Even if they came last week before the approval of this bill -- but they are not allowed to buy it?

What's the distinction?

It not an offense to use any drug, including heroin and cocaine.

So basically [inaudible] that's one of the main arguments this bill is trying to face trade really it -- thank you for walking us through that.

We are starting to get more details trickling out from the courthouse in manhattan where fabrice tourre has been found guilty.

What more can you tell us?

Su keenan, joining us from outside the courthouse.

Are you able to hear us?

We may not have been able to get the link up and running.

It is raining here in new york.

It is an amazing story.

The jury had to try to figure out first of all what were ceos, were synthetic cdo's and whether fabrice tourre had done something wrong and they found him guilty.

It is a fascinating and complex subject for anyone.

I imagine the jury had a lot of work they had to process and it very interesting.

Highly technical.

We are going to take a quick break and try to get su keenan up and running to find out what's going on down there.

We will be right back.

? let's go back to the courthouse and su keenan.

The jury has come back with a jury in the fabrice tourre case . they have found him guilty.

What details can you offer?

Fabrice tourre just left the courthouse after being found liable on six out of seven counts, that he potentially misled investors on a complex investment called abacus.

He was unusually quiet and he has been talkative throughout the last two weeks of this case.

The jury of mine people and the foreman was a former retail broker.

Again, liable on 67 counts -- on six of seven counts.

Three had to do with misrepresentation.

The sec said it had to do with abm amro.

Only two of the three counts were found liable and those had to do with just the abacus deal as it pertains to a be -- to aca.

Laura schwartz said she never knew that john paulson's fund was on the other side of this deal, and that it persisted -- are dissipated when this collapse.

Fabrice tourre was found guilty and goldman paid for the defense as a sort of proxy.

They wanted to clear their name and they have not been able to do so.

Many of these counts were what goldman settled back in 2010 with a 550 million dollars settlement, saying it was not -- saying it was a mistake to not have made it clear paulson was on the other side of this deal.

We will find out more throughout the afternoon.

Can you give a sense of what happens next?

What we do know is a penalty will be imposed.

What fabrice tourre faces as possible banishment from the security industry and -- securities industry and what they would believe would be appropriate given the verdict that came back.

Very interesting developments to take place over the next few weeks.


Thank you very much.

We want to point out that goldman sachs has just issued a statement.

A say we remain focused on being transparent and accountable.

Let's go to adam right now for some insight and action.

Not too hot, not too cold, just right for a little fed sugar.

Time for insight and action.

To me show you the manufacturing data from around the world.

A real mixed picture, expanding manufacturing in germany, italy and the u.s.. the bad news is that it's shrinking in australia and china to my france, indonesia, south korea and taiwan.

There are more but i only have so much room on the page.

It is a mixed picture globally, which is why mobile gdp is only rising 1.60 four percent and central banks are standing tall.

One team, one dream as we learned yesterday.

Growth is now modest and that had been moderate.

Meanwhile, the ecb in one of their letters said policy is highly accommodative and supportive to recovery.

At the bank of england, we will continue to purchase assets, lest there be any doubt, which is why bill gross who runs pimco tweeted out -- it's real simple, just keep buying the five year treasury.

Look at this.

It is trading at about 122. it's not as though you are going to make a ton of money as this moves up, but he says as long as you have inflation running as low as it is, half of what the fed wanted this country, and as long as you have sony problems run the world, just stay with bonds and corporate bonds.

Our closure is here with a little rate reality.

He is the citigroup global head of economic advice and he advised ben bernanke during the onset of the european financial crisis and was a senior advisor at the imf.

Welcome back to street smart.

What do you think we are seeing?

Some have said we are looking at a recipe for a rally in that the fed has struck this dovish tone.

When you look at equities and rates right now, what do you think?

Following the june fomc meeting, ben bernanke's remarks were seen as being relatively hawkish.

He had a fairly dramatic move in treasury yields as a result.

What that called forth was bernanke on several occasions shifted the tone of his rhetoric significantly and talked down the bond yield.

That tone of dovish buses carried forward in the statement we got from the fomc yesterday.

I think they are setting themselves up here, seeing a stronger economy and stronger labor market.

We will get more labor market data tomorrow.

I think they will start tapering in september.

Even after what we heard this week?


I think they were recognizing there were some downside risks to the economy and there are things we need to watch and that's where they have their eyes focused, on the labor market.

That's part of the mandate that has been motivating this qe and we have had nine months of 200,000 dollars on average payroll -- 200,000 on average for payrolls.

My instinct here is that by the end of the year, we are likely to be looking at a 10 year of 290. we will be back with more "street smart" right after this.

? if you missed everything that happened during today's session, don't worry.

We're getting you caught up on the only stock you need to know about today.

Over 10, linkedin, up 4%. it's due out after the closing bell.

It has a record of beating since it went public.

I am on linkedin.

You are one of the 100 influencers.

Chesapeake up after the national -- after the natural gas producer reported.

They are under less pressure to raise cash amid rising few vices.

Number eight is time warner cable, rising 3% after second- quarter profit topped estimates.

The company said earnings growth would be on the high end of its forecast.

Time warner has been cutting discounts as a way to emphasize profit over subscriber growth.

Number seven is dell computers, up 2.7%. carl icahn filed a lawsuit to stop dell from changing the seizures for voting on the michael dell and silverlake takeover deal.

One of matt's favorite stocks, activision up 1% today.

They make "call of duty" and matt is very good at it.

This company set to report second-quarter earnings at just a couple of minutes.

Analysts are estimating a profit of eight cents a share on revenue of $608 million.

"new york times" following after reporting declines in sales.

They've been focusing more on attracting paying subscribers and depending less on advertisers to cut spending industrywide over the past five years.

So it seems like part of the plan, but not something that drilled shareholders.

I read the new york times every morning on my ipad and if there were more guys like me, the company would spend less on printing and that in theory should help margins.

Maybe to move to digital cap ultimately help newspapers.

I am a subscriber on the ipad and iphone.

That's what's happening and they need to figure out a way to monetize that, otherwise more trouble ahead.

Number four is aig, up more than 3%, the insurer is increasingly likely to pursue an ipo after eight yield to sell the unit fell through.

Robert edmund shea has been seeking to get rid of the unit to reduce debt and simplify aig.

The nation's largest trailing analyst estimates by the most in more than a decade as returns from its fuel making business plunged.

That is because it was trading up around $106. their profits dropped 94% during the quarter.

That is painful.

General motors and ford, both of those stocks are gaining on strong auto sales in july.

July u.s. sales rose six percent in pickup trucks.

That is where the margins are.

Ford sold 194,000 vehicles led by the f series pickup as well.

That is just continuing to drive trough it.

Here we are the bell is ringing.

Yelp is up, surging to a record high after his sales beat estimates.

It attract more advertisers which jumped 77% during the quarter.

Here we are, new records.

The s&p closing above 1700 for the very first time.

We are still off the heights we saw earlier in the session.

Up 21 points, a gain of better than one percent.

Some good news on the jump from lending a helping hand.

We will see how it turns out tomorrow with the big one we have been waiting for.

Time for stocks, commodities, and bonds.

Let's start on stocks.

The s&p 500 going through 1700 for the first time with an all-time high, everyday it seems we were up five percent last month.

We kickoff kickoff august with a big game today on bets we will see continued stimulus.

The fed, notwithstanding, he said you can't fight these inks around the world.

If they pump stimulus and the markets you will see stocks continue to rise.

Along with the positive news on labor, on gdp, you have investors betting the punch bowl is going to stay there.

A huge day for oil.

You had the strong rhythm -- manufacturing growth.

And also in china, the economy expanded as well.

More people buy oil.

That is the theory.

And some labor protest which sent output to a year though.

The oil minister said capacity could follow almost 80%. the downside, coffee prices are a four-year low.

Not a lot of weather damage.

There had been concerns about fraud.

More supply and lower prices.

For more, we go to julie.

We have seen treasury prices fall and yields go higher after we had economic data that came in better than estimated on manufacturing and also initial jobless claims.

Everybody looking forward to the big jobs report tomorrow.

The data lately and today giving fuel to the idea notwithstanding no mentoring of tapering on wednesday, the fed might the tapering.

The 30-year yield at the highest in about two years' time and 10-year have risen the most in a most a month.

You also watch the yield curve, the difference in yield.

Between the two and 30 year, the yields are increasing to about 342 basis points, reflecting optimism about the economy.

For more on what drove the trading, the president and are closer, still with us.

Did you see this coming?

I do not think anybody saw it coming.

A couple of months ago it became evident the markets will continue go higher based on everything we have been talking about.

Even from these levels?

If you look from to dave to the end of the year there's going to be -- to the -- from today to the end of the year, unless there is a significant shift in global monetary policy, unless corporate profits start going down, or inflation starts spiking, which no one expects to see, the driver for stocks to go higher is there.

The fed is going to be there as well.

The bank of japan.

I am not sure nathan agrees.

I am talking tapering in september.

I think the federal reserve will read -- reduce the pace of its security purchases.

Even so, i am bullish on u.s. equities.

When i talked to investors around the globe, the one asset that is universally loved our u.s. equities.

I think it reflects the strong earnings performance of corporate and the fact people have to put their money somewhere.

The bond market is a dicey debt right now.

Here's the thing, europe is starting to emerge.

We got indications from that from mario draghi, coming out of their contracting growth.

Europe is cheaper.

Why don't you say i'm going to put assets into europe?

Globally speaking, investors like the u.s. equities because you have a trend to the u.s. dollar strengthening which helps investors.

A double whammy.

You are getting a bonus.

The second thing that is happening, germany elections are coming up in september.

That is going to make european investors nervous.

As much as merkel is likely to win, the strength of the coalition is questionable.

That is going to put additional weight on the economy over there.

German has been the engine of europe.

I think people are saying, hold on a second.

Emerging markets are getting killed.

Is that an opportunity?

I think the emerging market reaction is concerned about what is going on in the united states and a risk of tapering.

They say there is a tighter u.s. on it -- monetary policy.

It is the sound of capital out of markets.

In addition where commodity prices are soft, where demand from china is weaker than it used to be, where demand for exports is soft, there is a lot of uncertainty.

You think there is more hardships ahead.


I am nervous.

A new record for the s&p. the first time it has been above 1700. how much further could the gal?

--cou could -- could we go?

That is the billion dollar question.

The debt issues in washington.

Even with the potential for tapering.

Investors ignored the fiscal cliff.

Big nor the sequester.

Ceo's did not.

There is not a time of investment.

Is that the missing piece of this puzzle?

That is the missing piece.

As we see more hiring, becoming more optimistic, the next step is we need to see them increase investment.

As they do that, earnings will rise and i think there is plenty scope for further increase.

I do not know about you, but the things we are following, rocksolid balance sheets, the things seems to be gravitating to, and also the small cap value.

We think those are going to continue to be very well.

The u.s. centric companies are going to do well.

The large cap multinationals, we think they are going to do well.

That is what investors want.

We always talk about a vicious circle toward a downside.

Right now we are caught in a circle to the upside.

We have to remember that.

Confidence drives demand.

We are is thing that on a week by week basis -- seeing that on a week by week basis.

Linkedin has earnings.

Emily chang from the bloomberg west team.

We are seeing some mixed numbers.

. revenue is above estimates.

Earnings per share, $.38. he gave a new number for subscribers, up to $238 million -- 238 million.

The wording number is guidance for the next quarter which was a light -- was light.

They had estimated $383 million.

When ken has beat estimates for eight straight quarters in a row.

-- linkedin has beat estimates for eight straight quarters in a row.

It is one of those companies we look at and say the business model is solid.

The fundamentals are strong.

They had three revenue streams , one of them advertising, one of them is premium subscriptions, one of them is talent solutions.

That is matching employers, trying to fill jobs with employees.

In terms of where the potential is, i was speaking with macro factor -- michael packed her and he thinks there is an opportunity.

They recently raised their prices.

It seems to be going well.

That is where analysts think they can see the most growth.

Emily chang, thank you.

We have your first trade for tomorrow.

Here is what is next on "street smart." checking in on marriott international.

The ceo gives us the room key to the massive growth.

And programming for the dogs.

A new channel that has tails wagging and leaves owners fighting for the remote.

And swimming with strippers.

It is all part of weird wall street.

Stay tuned for your first trade tomorrow.

? this is "street smart" on bloomberg television.

Area earnings came out today in line with estimates.

They are intent on wooing the new generation and they are figuring out just how to do that in bethesda, maryland.

Megan hughes takes us inside.

We are in the bottom of our corporate headquarters in bethesda.

This is what we call the underground which is an innovation lab for us.

He takes us on a tour where the company is plotting its future.

This is where we build all of the stuff.

Enough about the research, this is where we get dirty.

They are building guest rooms for their 19 brands.

For those younger customers, with different needs than the boomers.

Pings like -- things like, the baby boomer worked and played.

This idea of switching between work and play does not exist.

We have great beds.

We have high thread counts.

It is difficult to work and to eat.

In most cases there is no power where you need it.

To charge all of your devices.

The company invited marriott rewards members to be test subjects.

They start with a blank room and design it and offer feedback.

More outlets.

Just having to unplug the alarm clock or the table lamp is annoying.

When i travel, we all travel in packs.

We tend to be the same age group . having a bar helps a lot.

Marriott is making changes.

The new consumer is more mobile, global, collaborative.

That includes enabling smartphones.

Even in the shower.

We know on averages at about five devices per person in the guestroom.

Guests will check in through mobile kiosks.

And they will have communal tables and free wi-fi in all lobbies.

They are also updating business meeting space.

Small suites for could -- collaboration and help organizers make changes.

But marriott is not the ohnly hotel chain.

They are rolling out new products to target this age group.

American express put out report showing growth in millennial's traveling 82% compared to 69% last year.

Click for more on their earnings, we are joined by the president and ceo, arnie sorensen.

Good to have you.

Let's talk about what you told the street, concerns about international growth.

Walk us through that.

Really what we reported today was steady growth.

That is the phrase we used.

That is good, solid growth.

But we brought down the high end of our full-year forecast we gave.

We said we might do as well as seven percent.

Now we thought to get to seven would require a blowout fourth quarter.

We do not anticipate the economy's going to be so strong as to drive that.

We will think a five-ish growth.

We feel good about that.

There is a lot to be pleased with.

The business traveler is on the road with strength.

Families are taking vacations.

The only weakness is around the u.s. government, washington, d.c. it is the weakest we have and the second is an near-term group bookings.

It is a little bit softer even though longer-term looks good.

He seems to be a cautiousness.

-- there seems to be a cautiousness.

Sometimes it is harder to plan a year out.

They might be more likely to wait and see and it sounds like a zillow -- it is a little challenging.

It is a bit of a riddle.

To see weakness in short term but strengthen long-term in the same business invites the obvious question, how do those things reconcile?

We are watching this data.

It will take some months before we know for certain.

The longer-term group bookings are more important for companies . they are the critical meetings they must have.

They are very reticent to pull back on those.

Some of the short-term things may be more discretionary.

To the extent a customer is worried about the economy or what kind of budgets they're going to have next quarter, they may be pulling back a little bit.

It is all relative.

Where are the growth opportunities?

Where are you actually building or acquiring hotels?

The best news we had, we signed contracts for 16,000 new hotel rooms in the second quarter alone.

About two thirds of those were outside the united states.

Markets like china and india are the fastest-growing markets.

What we are seeing is a lot of supply growth.

We are seeing an explosion of new chinese travelers, traveling within china and abroad.

About a 20% growth in outbound chinese gravel -- travel, that bodes well for our hotels here and in asia.

You noted in the earnings call occupancy is close to the peak back in 2007. that would suggest you have pricing power.

I think we will continue to see rates increase.

About 20% of it was driven by an increase in occupancy.

All of the rest was riven by an increase in rent.

What we see this year will be a building on occupancy in 2007 and by the end of this year we should be back at the same rates we had in 2007. we have obviously lost to six years in that time.

We are not back to the same value.

We have some room to climb.

We will continue to see those rates move in the united states for the next few years, assuming the economy continues to grow.

We hope it does.

Thank you for joining us today mr.


Julie hyman, aig earnings.

The company is declaring its first quarterly dividend since repaying the government.

That dividend of $.10 per share.

The company also authorizing a $1 billion buyback as profit comes in well ahead of analyst estimates on an operating basis.

It was $1.12 or share.

-- per share.

The ceo points to a stronger company.

He has brought it back to the core operations.

He thinks it is a more unified company than in the past.

The company coming out and beating estimates.

The dividend buyback are contingent on the company being able to sell its business, the deadline for bids to come in at the end of the day today, if it does not happen we could see an ipo of that unit.

Thank you, julie hyman.

Forget about nonfarm payrolls.

There is a better wage to gauge the health of the economy.

We will tell you what it is.

Tv might be going to the dogs.

Are canines the new key demographic?

Sounds crazy.

? time for chart attack where we bring you a chart that will make you smarter and make you money.

We are talking about underemployed.

Nathan sheets, talk about the difference.

There is good news and bad news.

The unemployment rate is down from 10% to about 7.5%. we are generating jobs.

When you look at broader measures, like usix.

You can see the unemployment rate, the official rate is 7.6%. the underemployment rate is the one you watch.

The bad news is when you look at that, which includes not only those unemployed, but also people that have left the labor force and have given up.

And part-time workers.


You get a much different measure of where the labor market is.

Before things are back to normal we are going to have to create millions and millions of jobs.

In 2011 you were advising ben bernanke in the last 30 seconds, what would you be telling him right now?

I think the key thing for the fed is to be clear as to let the markets know what they're planning to do.

I think that is very much what earning key wants to do -- earning key -- ber nanke wants to do.

At some point in the stimulus is going cap be taken away.

A thin sheets, thanks for being here.

Coming up, the first and only tv channel and that man's best friend.

Meet the man behind.tv.

? it is a big one for the sec against facbrice tourre.

He was foreign libel on six of seven violations.

Su keenan has the very latest from lower manhattan.

This is their biggest securities fraud trial since the mortgage collapse in 2008. many said there was a lot riding on this.

Could they prove?

The jury came in with a stunning defeat for goldman's former vice president, tourre.

He was stoic when the verdict was read.

Six of seven counts in the claims that he intentionally misled investors to a billion- dollar transaction.

The first to recount had do with misrepresentation.

Made in mark and amend cheerios -- made in marketing materials.

The second claims, one of which tourre was found to be not liable for.

Those had to do with a fraudulent practice in a deal that took place.

A major investor, the executives testified for the sec that tourre never told them a billionaire, john paulson, was betting the deal would fail.

When he left the courtroom he was surrounded by cameras.

I have been here several days of this trial in which he had cordially greeted the press.

He said nothing today.

He left quietly with his head down.

This has been a blow for the 34- year-old former exec.

Goldman released a statement " we remain focused on being more transparent and more accountable and more responsive to the needs of our clients, what is important is that counts number seven, the journey -- jury found him liable for aiding and abetting goldman sachs and the violation of securities law.

This could very much complement -- complicate litigation taking place.

Over what they believe was intentional fraud.

Back to you.

Thank you very much.

Television has gone to the dogs.

Dog tv, the first and only channel created for canine viewers.

It is making its national debut today on directv.

The ceo promises your dog will not turn into a couch potato.

His programming is meant to soothe your dog's separation anxiety.

Might even spare your furniture.

He joins us now.

We love this story.

How in the world did you come up with the idea of dog tv?

Millions of dogs than hours a day at home alone.

They are bored and lonely.

We found a tool that was already used.

People leave the tv on.

We said, why don't we create something that is 100% compatible.

How do you know it.

Psych to watch?

We did a lot of research.

We viewed over 50 studies and we saw the effect on video, dogs are colorblind.

They cannot see red and green.

They hear differently.

They like specific music.

What kind of music?

Classical acoustic music.

It is soothing to them.

The kind of stuff you hear when you go into a spa.


Is that it?

Are we hearing some of it?

This is all original movie.

-- music.

We have relaxing content and stimulating content.

We have other animals we show to dogs to get them stimulated.

Spending too much time asleep during the day is not good for them.

During relaxation we will have more landscapes, animation, -- are we looking at examples.

This is stimulating content.

How do you know the dog is going to watch it yet come -- watch it?

We are not trying to create a new generation of couch potatoes.

But what they will do is look at the tv once in a while to hear something they like.

They will stare at the tv a few minutes.

Humans might be interested in watching this.

It is beautiful.

My kids love watching dog tv.

They love the music.

It is great for humans.

How do you make money?

It is a subscription channel.

We are launching today on directv.

There are tv has 20 million households.

40% of households have a dog.

Many people leave it to with the tv when they leave.

We hope they will join.tv.

How much does it cost?

Five dollars a month.

We have a two-week free trial.

People can watch the tv and hopefully subscribe.

How many subscribers would you need?

I can't go into economics about the deal but i can tell you with 20 million households, 40% dog owning, there is plenty of potential.

Why don't these people put in a dvd?

The dog does not really know.

We are talking about research.

It is scientific.

Dogs get tired of watching the same content.

So we invested a lot of time and effort to create a diverse package of content so docs could be interested.

I think it will make people feel less guilty.

About leaving the dogs.

Give your dog something to show your love and to do something better for your dog.

Gilad neumann, thank you for joining us.

Go to directv.

Do you have a dog?

I do not have a dog.

No, we will adopt a dog soon because my kids are growing.

I grew up with a dog that i loved.

I am a big dog person.

Thank you so much.

Coming up, detroit is bankrupt but automakers are making bank.

We will explain.

We will tell you where copycats of the delicious treat are popping up.

? detroit having difficulty but a different story for the auto companies.

We have a lot of numbers today.

They are doing very well, thank you very much.

Matt miller joins us now.

Over the past year, general motors is up 85%. beating the s&p, just like they have over 12 months.

They did well today, even though they missed expectations.

Estimates for gm sales growth for the month were 20%. that is a huge number.

It was actually 16%. if you break it down, chevrolet was up more than 30%. cadillac sales were up 30%. the chevy impala was up.

The impolitic was rated -- impa la was rated best decides to sedan.

It is a great looking car.

We have not had a u.s. car name estimate size sedan for two decades.

I like the rear quarter panel.

I like that as well.

What does this tell us about the economy?

Seems like a great sign.

One more sign the economy is doing well.

People are buyers in this market.

Pushing the s&p above 1700. for one thing you can get credit and a low enough interest rates to borrow money to buy a car.

Obviously you also need a car because cars are 11 years old.

You see the fusion, an interesting point on the fusion, sales were down 20% because they ran out.

They have to go the more of them.

They could not make enough for the demand.

It has that grill people love.

And that is a hybrid.

That was a hybrid.

The one we are looking at.

It has no electric engine and a range extender.

Otherwise known as a combustion engine.

Cars are no longer used, they are pre-owned.

That brings up a great point, used cars cost a lot now.

People pay real money for used cars.

As a result, carmakers can get real money for cars they have leased and they can give you a lower lease price.

That is a huge part of what is driving higher car sales.

A lot more people are leasing.

In the past you would lease a range rover or a lexus.

Now you can lease a camry for under $200 a month and toyota is using that because people in the u.s. are used to paying on a monthly basis rather than putting down cash.

Carmakers are using that to push sales.

Way to go.

Always my pleasure.

And you saw the jeep, chrysler, 40 consecutive months of sales growth.

40 months in a row.

Fiat is talking about spinning it off.


40 months of growing sales.


Yahoo has lead to 70% of cents marissa mayer takeover.

The company has acquired 19 startups.

It has a series of new apps and yahoo says it has reduced employee attrition by 59%. mayer has been busy but does she have what it takes to save the company?

Brads don't look into this -- brad stone looked into this.

How she came to the search giant and when she is doing to turn it around.

It has been a year since maria -- marissa mayer (oh where she was one of the first engineer -- left google where she was one of the first engineers.

Their smartest employees were finding opportunities elsewhere.

The jury is still out on how she has done.

The stock is up but that is partially on enthusiasm for yahoo's stake in ali baba -- alibaba.

She thinks the emergence of smart phones is one of these moments that can scramble the silicon valley hierarchy.

So she has created a mobile group to create well-designed applications around the thing yahoo does best and where it still has an audience, things like yahoo mail and messaging, photo sharing, and their news aside.

Yahoo faces an uphill battle.

They do not have a lot of the assets of the company's like apple have.

They do not have hardware.

People wonder why she would have taken the job.

One of the story she tells is how she almost thought she did not get the job.

She says on the night she was supposed to hear from yahoo, she did not hear from them.

It was an hour and a half after they were supposed to call.

She was disappointed how she thought she was not going to get some of the things they had planned.

It is a sign of how much opportunity she saw in a company a lot of people have counted out.

Don't forget you can pick up this issue of "bloomberg businessweek" for more details.

Strip clubs on the bottom of the ocean?

It is not a joke.

? it is time for wheeled wall street.


here we go.

We have heard of pop-up stores and restaurants and now there is a pop-up hotel.

Commissioned an artist to produced a mobile hotel room.

It has been an inflatable bed, it doubles as a couch, a bathroom, kind of weird.

It is also 22 feet in the air.

It moves around from parking lot to parking lot.

What do you think it cost?

You do not want to know.

$50,000. i would not even by the truck for $50,000. if they want to pay you.

Has anybody asked what is the robot doing their?


Have you tried a cronut?

I have never tried one.

It is a combination of a croissant and a doughnut.

It is supposed to be tasty.

They have turned into a hot commodity.

Is added a croissant flavored donut?

This doughnut croissant combination was invented in new york by a chef.

They love it.

They will wait hours in line and pay five dollars for one of these.

They look delicious.

The cronut has made it to the far east.

You have bakeries in spain and the uk.

Even dunkin' donuts.

Even spain?

Even dunkin' donuts has a cro--nut.

A cronut.

You probably would not eat one at an underwater strip club in israel.

We have it sure is of a sure club under the ocean under the red sea in israel.

It was originally built as an underground restaurant.

I decided to turn it into a pole dancing club.

They did not even make money with that.

Empty and sunk.

People would rather look out the windows then inside of the offerings.

Maybe that says something about a new moralism.

I would rather sleep there than in the mobile hotel.

For $50,000, they are out of the market.

This place will let you slpeepp fo -- sleep for free.

Who would build a restaurant under the water?

I think it is cool.

Like in the little mermaid.

I never saw that one.

I do not have

This text has been automatically generated. It may not be 100% accurate.


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