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tv   Bloomberg Markets  Bloomberg  July 14, 2015 3:00pm-4:01pm EDT

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unexpectedly fell. is that jerry janet yellen still on track to raise interest rat es? alix: not everyone is applauding the accord. matt: what to listen for when cfx report second-quarter earnings after the battle. matt: good afternoon. alix: happy tuesday. we want to get a look at the markets at this hour. we have the around deal, but there was a no news is good news feeling to the market. nothing preventing us from rallying.
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we held the levels right around the highs of the session. it looks like we are above all of those long-term moving averages. matt: in positive territory for the year. the dow is up again today. again up almost 100 points today. we continue to grind higher. has been the assets that surprised me the most over the past week and month. cannot believe the resilience of this currency, no matter what you get out of greece, up arrow down arrow, it holds. that is the range we're looking at. do think that the dollar nine cents level will be tested some point tomorrow. tomorrow is when will have the great world meant voting on the potential negotiation in terms of framework of starting a deal. but what i want to drive her
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with attention to it has to be twitter. this was a standout stock. take a look at the big spike. on they moving average first time since april. news story that came out that rumored there was 31 billion dollars takeover bid, and it was a bogus website. it looked exactly like a website, although it had bloomberg talk market in instead. we've seen a lot of people moving markets, so i want to highlight that. the stories at making headlines this hour. after two years of tough diplomacy there is a deal and arrest nuclear program. it is aimed at giving a run from building a nuclear weapon and in return the u.s." the u.s."
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powers will eventually lift economic sanctions. recordnt obama says the makes the world safer. >> i have no doubt that the person who holds this house well be in a stronger position, and with the inspection and transference is that allows to manager anywhere any of program ce that allows us to monitor the iranian program. it would be responsible to walk away from this deal. alix: here is house speaker john boehner. >> this is not about democrats or republicans, it is not a partisan issue all. in his right versus wrong. you do everything we can to get the details, and it is as that is deal as i think it is at this moment, we'll do everything we can to stop it. alix: president obama and prime
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minister benjamin netanyahu spoke on the phone about the accord. earlier benjamin netanyahu made it clear that israel is against the agreement. this deal will give an unreformed, unrepentant and far-reaching terrorist regime the capacity to produce many nuclear bombs. an entire nuclear arsenal with the means to deliver it. what a stunning historic mistake. alix: speaking in a nationwide televised address above the iranian president had this to say. >> the page of the past 12 here time, which was company by the illusions from the world powers has completely turned and a new chapter has begun. this new chapter opens on the basis that the solution to problems in the world can have a shorter and less costly path as
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well. rouhaniesident dismissed claims that it sought to make atomic weapons under its new program matt: the bailout talks have been set for a vote tomorrow. must live the on his own coalition. the press has run into opposition from his own cabinet. introducedl, which many new issues, which speaks of 15 billion euros and guarantees oflic property, which speaks changes in law like those that will lead to the confiscation of which refers to the complete description of constitutional value, we cannot agree with it. > matt: he says the eu summit was the result of pressure on his country. he will have to rely on opposition parties now to
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approve the legislation. lawmakers must approve the -- ratification of the legislation before talks get even begin on the bailout. and expensesrose fell at j.p. morgan. wall street firms have turned to cost-cutting in the last four of the five years. and in may jpmorgan said it would cut thousands of jobs and back-office workers to cheaper cities. debt income for wells fargo was little income from a year ago -- was little changed from a year ago. retail sales fell unexpectedly into it. and tomorrow you will get janet yellen semiannual titles commit to congress -- testimony to congress. aboutwe were talking
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brendan's outlook for the economy. step forward, one step back on retail sales. if you recall we had pretty good and in in both large may, but then we had setbacks in april and june. so our sense of history is that you are not yet able to string together two powerful months. but if you average out the last four months you are doing well. theou are looking back at fed minutes and describing what you see as a fit -- nervous fed. what are they nervous about? >> they managed to being nervous about a lot of different things. the latest thing we alluded to was the situation in greece and the potential for financial contagion. i suspect that today they are not nearly as nervous as they were a week ago on that.
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>> tell us about manufacturing, particularly in the areas days. that was supposed to be a bright spot. a bright spot until we have the strength of the dollar. now it is treading water. numbers look slightly better, but are still disappointing compared to what the rune been prior to up in the dollar that started a year ago. the industrial production numbers, which will be out tomorrow, probably look slightly better, but overall manufacturing is pretty much either treading water or growing up slightly. to boost the economy what we need is the service sector and the construction sector, because manufacturing has those headwinds from the dollar. knowy sense now that we vaguely with the price is going to be, and what effect that will have on consumer sentiment? >> typically when the gasoline
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prices go down that has been good for consumer sentiment. the oil prices are pretty near bottom right now. -- it isan supplies not at all for sure that the united states will approve of this agreement. i think absent more visibility at certainty about what is happening with the iranian supply, oil probably stays close to what he does right now. yesterday we reported about blackstone selling some of their real estate holdings, in atlanta. tells about the housing industry. >> the housing industry is doing well. the builders have limited the supply they're putting on the market brady went upward pressures on prices. this is one reason why somebody
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like blackstone who loaned all of these residential properties is starting to take some profit here and there. the greatolding on to bulk of their holdings, but in some places it makes sense to take profits. pimm: when you expect from the janet yellen reserve? >> i think it will go with the september meeting. i think she should be able tomorrow to express somewhat less and certainty and worry about contagion surrounding the greek financial problems. performing as well as they continue to perform this year, the fed is on track for that first increase. matt: that was our chief u.s. economist speaking with pimm fox. alix: the prime minister is speaking hungry tv.
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julie hyman has been monitoring those headlines for us. indeed he says the night of the greek deal was a bad night for europe. he says the u.s. summit result was the result of treasure to greece. he had to option, a deal or exiting the euro, which was not how they painted it when they asked voters to vote in the referendum. greece'scovers all of midterm fiscal needs. it also includes debt restructuring after 2022. it will have a fiscal adjustment of 1% a year. i am not sure what that entails. but he says greece will not have to cut wages and pensions. the sales tax increase is irrational, but we had to accept that pension reform had to read done even if not demand. he is a rare elected to spend and signer on to this
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deal. his high-end's were tied. that seems to be how he is for trying himself in this interview on greek tv. matt: a lot of talk about gunboat diplomacy there. i guess that is the card that he is playing. alix: if it goes through parliament, if it cannot come to his own party, how much opposition does that have to get ? if they are able to agree with the framework? this is a framework for negotiation, this is not a final deal. this is as we are agreeing to talk. matt: this is something they have to do in order for talks to start. thecan understand why europeans would make that demand. in the past, they have asked for certain concessions, for example a $50 billion asset fund that greece has agreed to come of got the money and had not followed through on it. because you have this
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massive devaluation of the economy, the assets have also been devalued. euros and 50 million fund their own bailout? seeing cityyou are grexit could be imminent. coming up on bloomberg market day, how will sue thousand 16 candidates address the run deal in their campaigns? ♪
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welcome back to the bloomberg market day. alix: directly to julie hyman. julie: a big investment company from china, affiliated with the university is planning a bid for micron, about $21 a share. in 19% higher than where they close yesterday. there are some questions about when an offer is actually coming.
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no formal one has been submitted. years, thest five semiconductor deals that we've seen that have been $1 billion in size. you can see the blue bar chart is the value of deals, the big surge that we saw last quarter which was a record quarter or chip deals with intel buying all terra for $16 billion. premium onwas the this one. we have some swinging above and below that line, but 19 is not above where we have seen. but if you look at the deal multiple, then you are seeing that this might be a place. ebita.3.9 times give deals,e past five years 71% of them have been valued
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above evebita. analysts are questioning today the price for at least the talks upon hypothetical price that is being placed upon this deal. there's also a lot of concern about antitrust resistance to this, and also congressional resistance to deal of this size coming from china, ca targeting the united states. matt: that is a great charge. t. deals of the past five years have been above ebita. julie: indeed. now i want to mention the worst performer in the s&p 500 today, and that is a company that is a spinoff from sallie mae, the
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student lending company. 11%, and aare down loss of private student loans are costing the company. this is an education that servicer. it reduces expectations for 21 13 earnings and i wanted to mention the second worst performer in the s&p 500 today. it fascinates company down 4.2%. the company's earnings per share of the estimate, but the ceo says the company is struggling with headwinds right now, although the underlying business is dead. so the notion of headwinds and a slowdown in his daily sales growth rate over the past several months seems to be weighing on those shares. alix: good stuff. matt: very cool. angst very much. i want to get a look at the top stories crossing the terminal at this hour. the republic of exploding
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airbags may be why japanese air tator -- airbag maker kata are recalling the ones that went into chrysler town & country minivans. the programs weeks after to akata did the largest automotive recall in the history of this great country. victory is a for over here in the city. they are freelance workers rather than employees. the labor commission decided the opposite way, it ruled that number must pay thousands and expenses. matt: francis all right and bastille day with a display of fighter jets. also enhance were antiterrorist marches the first time.
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bastille day commemorates the state prison in paris that was stormed and destroyed in 1789 during the french revolution. alix: it means a lot of drinking restaurants until very early in the morning. it is a hearty day. still ahead on the bloomberg market day we will be talking about the most talked about look of the summer. me this sequel is driving bottom line. ♪ [laughter]
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matt: today readers around the world are getting their first
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look at harper lee's go set a watchman, the follow-up to the classic to kill a mockingbird to the new issue is one of a few surprise sequels which barnes & noble says will help host sales by 1% this year. that is a boost, if realized, would mark their best skiing in at least seven years. best gain in at least seven years. thisve been looking at classic american tail and the surprise sequel. the production run is pretty impressive for this part two, although it is a prequel. >> 2 million copies are what is out there. they were released this week. in terms of superlatives, there are a lot. is the most pre-ordered book on harpercollins in history. it is also the most pre-ordered book on matt: harpercollins history? >> yes. part of in perspective, it is twice the run of the game of thrones last book and
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two thirds bigger than the left hunger games. we are looking at revenues of $30 million to $40 million. it could eventually go to news corp., which is a parent company of harpercollins. matt: harry potter, game of thrones, and what was the other one? >> hunger games. matt: this is slightly less nerdy than those things. stuff. very real and to kill a mockingbird is the region -- is the reason, we had to read in school, it still makes a ton of money. >> harper lee is 89 years old and she is making a ton of money. every single day she is making $9,000 in royalties, and one half of 2009 she pulled in $1.79 million . to kill a mockingbird has had 55
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of watchman, but it will be interesting to see 50 years from now how far that goes. matt: it will be interesting to see what people think of the book. >> just as this book is coming out over the course of the day the narrative from rebel from something where it is actually a two in kill a mockingbird to something that is not a prequel, but something that is a father narrative that says this is the basis of this and then harper lee said i'm going to use this and i'm going to take part in it on i'm going to make to kill a mockingbird. matt: you have been to my interest. it for me on bloomberg market day. we will comine back with twitter. ♪
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alix: welcome back to the bloomberg market day. let's get straight to a look at the top headlines this afternoon. u.s. businesses added to their stockpiles in may while sales third straight month. this may indicate that businesses are optimistic about future sales. ceo magazine says the best state in the union to do business in texas. the states gdp is growing faster than the rest of the country and its unemployment rate is lower. but for some other states the confederate flag controversy has meant a loss of business opportunities. earlier today, texas governor gray gavitt told us that has not been the case for the lone star state. >> the state of texas argued at the united states frame or two to manage confederate license plates, and we won. we have been in the vanguard on this to ensure that we do not the the government be premature of embracing the images that would be hostile to some people. governor abbott was on hand for the opening bell of the new york stock exchange is being
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new horizons spacecraft is getting the first dose of pluto close-up of pluto. it was a downtown to a celebration. >> 4, 3, 2, 1. unmanned probe will get within 708 miles of pluto. it has traveled nine years and 3 billion miles. charityr the grew at a blockbuster rate last year. now that money is going to a drug in late stage trials. it gathered millions of views on social media and had high contributors.
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congressmany, ohio mike turner who sits about the house armed services committee joint betty liu. >> let's start with the fact that the president's bypassing the constitution, and if it is to be binding it should be a treaty. thehould be put before senate to be ratified. we are also dealing with a nation's leadership who have routinely targeted america. but turning to the substance of the president said today that this deal is london-based base of verification. but it is not. i have met with head inspector thehe iranian task force, agency that will be charged with rare find this. he made this point that is very
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important. he said he's going to be given a ledger and ask me -- to certify what is on the leisure. but he not being asked to certify the ledger. ofis not doing instructions the other sets of pages, other programs or other sites. he will be asked to certify what has been declared. that is problematic, and they will be able to pursue an icbm program which puts the united states at risk. the nuclear nonproliferation treaty is a binding treaty at iran is one of the original signatories of that. they signed it back in 1968. since they are one of the original signers of that treaty, what exactly are your concerns? nuclear power is to be used for peaceful purposes, you just do not trust the iranians? >> absolutely. and certainly by what you have said. they were violating that treaty that they had signed. this is a regime that has no ieserest in signing treat
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and abiding by the. they continue to pursue their support of terrorist organizations, they're just elation of the middle east premiere he threat to the united states of america, and to israel. verifying what their nuclear assets are, and that being unsatisfactory part of this deal, what can the u.s. to short of an military offensive on this? what can they do to verify properly? >> what the administration has done is they have conceded far too early on number of issues that are incredibly important. take icbms for example. pursuell be able to this, added it only has one purpose, to reach the united of massith a weapon destruction. if they are truly going to be a nation that abandons nuclear
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ambitions, they should been in richmond, and they should make sure that all of their sites are available, and they are not going to be. they will not been able to certify that around is not have other sites are not part of a weapons program. was talking about this earlier in the newsroom, and one of the things i remember was the negotiations at camp david between the israelites and the palestinians. he got a lot of flack wouldn't hen he went back home, and his quote was because you do not make peace with your friends. is it your contention that we should not talk to people who we do not agree with? is diplomacy, for all intents and purposes not the way to go when you're dealing with the regime like a ron? -- iran? difference in what your negotiations are and what you're trying to achieve.
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you're ignoring the fact that this is a regime that actively practices taking down u.s. aircraft carriers, has his military configuration as a threat to its neighbors and supports a terrorist organization. they require that no major change in shift in policy or the military action on the part of around, other than non-verifiable reductions in this deal. alix: that was mike turner of ohio. primen athens is speaking right now. thank you for staying up for us. what so far has he been saying in the interview? isthe big take away here that greece has a chance to ask us this crisis within three years time.
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all of the choices that he had to make, some choices were very hard, including whether or not to agree to the deal. >> we were made to go towards the most powerful people in europe. we had to put this on the table. the agreement with the specific redeker's or go bankrupt. bankrupt.tors or go he said that the creditors were vengeful, even after the referendum passed last week he talked about a number of hearts of this plan, and it would talk about a couple of them. this was a hard choice to make. determined age, that is something the great people should've done on their own. it is not a progressive thing or someone to be able to retire on the age of 50. the tax, broadening the tax base
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and raising the sales tax. without, it is irrational, but he had to accept it. i was out running this neighborhood, and he said he did not have to be an economist to realize that by raising sales tax with that is not what of a great effect on the first able in the country. these are a couple of the really controversial things he had in this plan. >> this was a policy of imposition committed prescribed -- what about terrorism? -- tourism? yes. to 20%d goes from 15% has a logical to me. this is absurd. minoris adjustment is compared to having the sanctions on wages. >> the interview continuing. before i go, there is a lot of
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speculation and a lot of rumors that he will have to resign after this deal goes through the parliament. he plans to stick it out and see these reforms put in place. alix: thank you. coming up on the bloomberg shares at, twitters 8% is prompting an investigation. ♪
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alix: welcome back to the bloomberg market day. closinges from the bell. we seem to be holding around
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those highs of the session. we are having some issues with your microphone. let's get back to you in a second. ondo want to get some detail the top stories making headlines at this hour. hurricane dolores has strengthened a little and expected to get even stronger on mexico's southwest coast. the maximum sustained winds have increased to nearly 80 miles per hour. the national hurricane center says dolores is expected to become a major hurricane tomorrow. winners of the masters and u.s. open has arrived at saint andrews for this british open. it is the third major tournament this year. he has a full head of steam after winning the john deere classic. tennis players are getting a raise. this year the men's and women's
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single champions will earn $3.3 million. that is a 10% hike from the previous year. the runners-up will walk away from $1.6 million. the player that loses on the first round will earn more than $39,000. the tournament gets underway next month. those are your top stories. we do want to go back to julie hyman, her microphone issue has been to. we were looking at the grind higher this year and stocks. we are rising for a fourth straight session on the s&p 500. this was the best three-day rally since september. building on those gains. the highs of the session, as the s&p is up .5 of 1%. if you take a look at the imap on my bloomberg terminal you can see what is doing the best. it is a relatively broad-based rally. pieces of consumer discretionary are down, but largely doing
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well. energy, health care, materials and technology are gaining. let's get a little more specific. energy stocks are doing well today. oil has been rebounding. alex has been talking a lot about that. biotech etf that is actually at a record today. a lot of the biotech companies are rising today. they're going to be presenting data in the next several weeks. and the semiconductor index is forer on that expected deal micron that we talked about earlier. the movement that we have been saying in the next as of late -- vix as of late. we have seen the fix actually turning lower. this is a one-week charge. the past three days have been the worst offense lacks -- since
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last october. we have seen these swings definitely increase as volatility is increased. there is an interesting story on the bloomberg terminal today. happens to the vix when the s&p 500 has wounds. the white is the s&p 500, the blue is the vix. ildy have had more while swings as we progress this year. swings on days of 1%. we have seen bigger moves in the vix when the s&p 500 falls. it basically means that the increase in volatility that we have been talking about four finally indeed has
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arrived, thanks degrees, thanks to china, thanks to the federal reserve and u.s. economic data as well. correspond national volume, and then we have a pretty cool charge. get soment to political perspective from one of our major stories today. the iran nuclear deal for joining us now to discuss is josh green, co-anchoring with all due respect tonight. first off, tell us what the reaction has been from the 2016 candidates from both eyes of the aisle. >> on response of the republican side has been unfettered condemnation and criticism. you have the bush called it appeasement. the one unexpected thing we saw on the republican side was the any response from rand paul. that is a little. the most important response from the democratic side was hillary clinton. she came out this morning and a brick rest of them are chronic
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congressmen and embraced this deal. i think the fact that both obama and clinton have likely supported this, that while they have big questions, it bodes well for democrats. the republican national committee definitely had some strong words to say about that the deal would not happen without hillary clinton being putting things in motion. explanationrica an about why she empowered legislation for a war iran. ofif you go back to the left cycle, what hurt her and for policy is the fact that she supported the iraq war. has engineeredhe a diplomatic agreement to prevent iran from getting nuclear weapons, is not only is going to help her with the democratic primary voters, bullet holes generally. we support that by a rate of
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about two to one. frontgreement is good be and center, debated in congress, and a cable television for the next 60 days. but for the time being, clinton is in pretty good shape when it comes to her role in having orchestrated that. alix: thank you for joining us. tune in tonight to all due respect. you do not want to miss that. are talking we railroads into the close as csx is just moments away from reporting earnings. ♪
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alix: an article that appeared to be a site from bloomberg was actually a sake but that did not. shares from popping up 8%.
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we are joined by robinson. >> in situations like this, they are generally looking for suspicious trading, out of the money options, it is going to take a couple days for these traits to settle. there's a lot of time for them to see what is going on. alix: how do something like this actually happen? it looked like a real article, except that names were spelled wrong. >> part of the reason it took off is that a lot of these financials press will put out a headline, and then these high-frequency traders will trade on the way and the becomes the self-fulfilling prophecy. from the sec standpoint they are not in the business of degree what is true is not what they are in the business of policing something. beenis something that has going on, we saw this a couple weeks ago with avon.
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it has just been going on in general. alix: what are these telling us about the sec enforcement? the job?asleep on >> avon was tricky for the because it was a regulatory filing. but for them they are pretty good. they have specialized units in figuring out what is going on in these types of cases. the bigger problem for them is that these individuals, or whoever is behind this is probably not based in the united states. they will have to -- avon was a bulgarian traitor, -- they will have to expedite people and work for those countries and regulators. the hoax was on may 14, and three weeks later they had an asset freeze. i figure they will be as aggressive in this case as well. alix: what is a mean we've seen more of these kinds of hoaxes? these are instances where they happen regularly, but there's not well known names. you have these pump and dump
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kinds of scenarios, they are i must smaller scale. they do not think of heat. twitter, avon, these are brand names. alix: thank you. csx will be the first railroad to report second-quarter earnings after the close. they project earnings-per-share maybe unchanged, and slightly higher. our editor at is large cory johnson. the reason why i want to talk thet the excess -- css is impact of the oil community. what do they actually transport in the roast relevant commodity? big ones because coal is a big part of it because energy is a big part of it. : still the number one business for csx. it has been declining. if you look at an annual basis you can season interesting stories that have aspects to
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them. but the decline of the use of coal in america, if you look at the revenue that has been fined, if you look at the profitability, it is been pretty good. but what is really interesting is the declining importance of coal in their business. if you look every year, coal is a smaller and smaller percentage. ,ook at their revenue growth and now it is picking up because they are adjusting. haveercentage of sales alix: how much of today make off of oil versus coal? >> we do not know exactly. we can do a revenue for each different kind of move, but the thing that is driving the oil in thes is oil drills
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balkan territory. there are not in good , and so the primary way to get a notice by rail. similarly, we can now look at these businesses as a way to get a sense of what is happening in that region and how well specifically, just by looking at the results, what has happened in the last 20 minutes. alix: and what regulatory hurdles they have an transporting oil. there have been a number of spells. spills. be responsible for retrofitting their cars and handling those costs. the end of the depreciation schedule is quite long for these things. but when you look at this, these have improving margins.
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they of done better jobs as i do things. we are expecting on a year-over-year basis, 6% in revenues and profits can be flat. theystreet analysts think might be wrong, they might be right. but i do think this is a really neat business to take a look at. rail is a form of transport that is growing in almost every way. there is a left stories about a lot of things in the next half hour. alix: thank you. i really appreciate it. up, fresh off of earnings we will hear from wells fargo cfo, you do not want to miss it. ♪
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the closing bell. i'm alix steel. joe: and i'm joe weisenthal. ♪ alix: optimism overseas, crisis has eased, the dollar fell after wounding the fed, keeping interest rates on hold. thequestion -- joe: question is, what did you miss? we spoke to the cfo of the biggest home lender about his business and economy. iran, the nation is back in the game of global commerce. joe: we dig into the hughley -- usually asymmetric risk on the fence. is a december rate hike a lose lose proposition? take a look here at the s&p and the moving average continuing the bounceback at


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