alix: global stocks having the worst week of the year. is, but the question "what'd you miss?" gold plunges, when will the markets recover? alix: weakness spreads to natural gas. it is showing in their earnings. next?hat is alix: we begin with the market. averages falling for the fourth day. the dow and s&p 500 closing at two week lows. this has continue to grind lower the 100 dayround

moving average for the s&p 500. joe: it is low across the board. today felt real. biotech name, that hot that crashed 20% and energy and materials getting clobbered. worst weekly the loss since march, google, amazon, not enough to hold up stocks. biotech is really getting hit. joe: i will look at the bloomberg terminal, new home sales. ugly news. it has been strong lately, good data, but we had a miss today. home's for the month fell 6%. this has been stuttering. this is how we measure the housing number, other numbers looking ok, but not what we want to see. a demand issue, because other data we have seen

has been strong. joe: most of the housing data we have seen has been strong, this could be the start of something problematic, or it could bounce back. oil, back inook at full swing. this is a yearly look at the oil rig index. if you look closely, right here, you can see a flow of take -- uptick of oil. right here. you have to squint. but it is significant. 21 oil rigs added last week. balkanse added in the and other regions. joe: it is picking back up again. alix: they have been adding them week over week. we continue to have these come online and have production around record highs.

what do you think will happen? joe: probably go down. selloff in recent hemodities, we will see what thought about recent comments. alix: looking at commodities. check it out. >> fundamentals have been usurped in many ways in this selloff, returning to where the market should have been. if there had not been euphoria about commodity land. alix: to top it off, we get the or -- at a hedge fund hedge fund goes to gold. what does that do to the market? .> hedge funds are net short vw oh my that is emerging

markets. normallyap, but they get their heads on by isolating risk. that is one thing. now the markets. on at little on the fence the correlations that they are causing. is trading more than you think. of the volume is high. that gets a lot of news. but they do not own that much. billionnly has about $8 in total assets. if you look at trading and oil, almost all of that is happening between two people. they are nots, going in and buying futures, unless they get in order. that is happening in a separate exchange. of course, if you look at them, they democratize things for people. you put it in an equity wrapper.

anybody can buy. this is a portal with money that might not have been there. there was talk about how this has affected gold. joe: yes, let's talk about that. this was a big story, becoming the biggest etf in in the world. it has been on a downturn. how much do you think that the gld etf has influenced the price of the metal? out it it first came did. it was a game changer. going fromt it was zero to $76 billion in 2011. from thehat increased fact that there is more by orders, people who have an easy way to buy it. but we have seen gold take a haircut. it is about my $5 billion at this point. billion at this point.

you are looking at the market evolving around it now. when it first came out, yeah, you had a portal into this new area and it changed the game. alix: i have some interesting trivia, gold, pay attention. the bank had a note out today that said that they will adjust the price for gold and shows it is way above the long-term average and prices should be $750-700 $25 an ounce. -- $735 an ounce. here is a question -- you are saying that the commodity is not big enough to affect the price, but can you use this data to figure out insight as to where the commodity price will go? >> know is the answer.

when you have a huge creation, that is usually through grassroots trading. this happened at the end of the day. the flow shows up the day after. by that time, everything is maybe a little different. what we look at is volume, if you see massive volume going up like stocks, you see that as a signal. flow is a good for stepping back and looking at monthly data. i can tell you the $4 billion went into energy this month, which is interesting because it's been falling. interesting to say, because people are looking at the bottom and failing. you cannot make trade decisions day to day, because they are a day or so late. alix: quite a lot of exposure ends up being leverage, what does that wind of doing to the market as a whole? >> velocity shares have triple

leveraged, these two etf's -- ofx: $3 billion coming out the etf. >> that is a lot. in the case of this one, what i find interesting is it has taken on more. you have a separate world of hedge funds, traders, that is what it is, not retail investors. money andake this look at the entire market, it is not that much. but the trading volume is upwards of $200 million a day. it is a growing area. joe: you wrote something for bloomberg.com today and said there is atee edged , are theyiners adrenaline junkies, is that who they are? >> i would think so. this is the financial vehicle of

crack, 90% in july and to take the s&p 500 five years to return, so these are returning day.rcent in a you have people who are going long, short, with the typically do is they wait for the long one to have a good day, then they quickly go to the short one. got destroyed, because commodities have been consistently going down. the one it was up 99%, that was the one that was wrong, because they are waiting for the reverse to happen. they are getting returns on the -- come backe and on the return. alix: where are people the most optimistic, it may surprise you. charts await you after the break. ♪

♪ --: "what'd you miss?" before the break we said we had charts about where people feel optimistic about the economy. alix: countries in africa show improvements in the coming year. joe: highly developed nations korea, australia, and france that that they would stagnate. alix: i would not think this is the case. joe: there is something profound about human nature, living in rich countries like the u.s. and australia, we are depressed about things. alix: have to do with government spending and quality of life improving more quickly. ethiopic and their government will, into more money for

education, and for structure, and that makes a difference when it comes to response. we are worried about budget all the time here in the u.s. joe: i think we should appreciate what we have. alix: that is true. we will get to top headlines. the wall street journal is reporting that the u.s. is preparing to release a spy, jonathan pollard. officials have been pushing for his release. it could take months. the justice department declined to, on the report and officials are banking that this would ease tensions with israel and the nuclear iran deal. joe: mobile payment form square has filed for a public offering, that is according to people with knowledge of the matter. billion inesses $30 payments from merchant customers, that was in 2014. it is expanding into other areas, like business lending to provide additional services. alix: and at&t has one

permission for its takeover of directv. this is after promising to spread rock band two more homes -- broadband to more homes and businesses. fcc and approved by the it will not get challenged because it does not pose a risk to competition. these are your top headlines. that surprised me, the fcc has been like, no. joe: they let this one through. aboutcopper does not care china. this is from manufacturing data. joe: why doesn't copper care? pmi, oh my's week gosh, they will not buy any more copper. that is false. if you look at fast-growing sectors that use copper, it watching machines, dishwashers, they actually sit at 12 million consumption. total

that is the orange line. that is growth trajectory over the next five years. joe: copper is basically a china story. see being now what we measured. alix: that is why you see big banks diverge on the use. goldman sachs is moving to a consumer driven economy, but it won't be enough to eat up as much copper. if you look at building consumption, it was up for copper. it was 2 million times. tons.illion joe: you need to check out these charts on brazil. it is a basket case. up.ployment, it is shooting it is ugly. here is a chart, the highest in several years. no country wants unemployment rate to have a chart like this.

it is bad. check out this chart of inflation. the cpi, it looks similar. this is shooting up nearly 9%. this is a word, it tech spoke textbookn -- it is stagnation. prices are coming down. in this case, both of them shooting of at the same time. that is misery. alix: i was just talking to someone who covers latin american markets and it is the worst performing latin american currency in the whole region. what do you do if you are this central-bank? them.hat could help sometimes countries want to see currency like this. but that is the problem, nothing is getting going. exports are not booming. unemployment is surging. they are in dire need of a

fixed. the other thing that was interesting, emerging-market currencies, this is the worst ever. killed. a horrible week. coming up, -- joe: five years after the first , it is stillshed vacant. we will show you this building after the break.

young and said he was built, but is mostly

deserted. joe: no fear, they say it will quadruple gdp soon. alix: look at those pictures. that is a huge area. i went to china 10 years ago before the olympics and you saw all this construction all over beijing putting up the same types of buildings. now, you can assume that nobody is living there. joe: i could move there. joe -- alix: natural gas companies in the northeast are feeling some pain. infrastructure expansion is making a harder to move volume in and out of the appalachians. several companies are exposed to the problem. dan injoined by pittsburgh. joe: why is there such a problem in the northeast? >> it helps to look and see what

has happened over the last six years. you have the yield in pennsylvania that has grown from producing zero a day to becoming the largest gas producing base in the u.s. reducing nearly -- a day. you have seen supply growth from this basin facing the demand growth in the northeast. there are implications across the country with natural gas and the need to band -- the new demand, that is putting pressure on prices not just in appalachia, but across the u.s. alix: one billion cubic feet a day. if you look at natural gas prices compared to henry hub, we took one, just one area of the northeast versus henry of, that

divergence has got to hurt on some level. how do you deal with that? >> it certainly hurts the industry. the reason why this is happening is more gas is produced here than there is a capacity, we're delivering this to new markets. you essentially have this built up bottleneck of gas in appalachia. it is not applicable to all companies or all producers up here. the companies that are doing well are the ones that foresaw this issue of more gas being produced then there was capacity and the solution is securing capacity on the interstate pipelines. and making sure that you are hedging your gas to protect against downward pressure on prices. companies like this, we have secured capacity and protected against what we have experienced

in appalachia. joe: you can see the problem vividly when you look at a chart ininventory to natural gas the ease and how much it has .xploded in recent years anything that can be done to solve this, or do you have to wait it out and wait for producers to fade? for low the solution gas prices is low gas prices, it is certainly displacing the producers that can make economics work for gas prices. you can see the slowdown in development over the last few years and that is on the supply side. on the demand side, you are seeing a new generation powering coal-fired plants. you are seeing on a global scale with the u.s. gas production this new phenomenon, which is exports. you will see over the next two years real changeable demand

day ofof up to 10 a exports of natural gas from insalis, from other basins the u.s. to overseas. market andficient there will be opportunities thomas and we are constructive -- opportunities, so we are constructive. alix: you mentioned hedges are a way to stay afloat, but once they run off, what do you do when you still have this natural gas trading below one dollar? joe: -- >> make sure that your hedging forward. alix: that will not do anything for you in the long run, right question mark -- right? >> $1.20 is a low price. , this isny like rice

actually being sent to the gulf coast and midwest, and that will eventually go to canada once extension projects come online. producers, buthe certainly for the guys stuck in appalachia, they are in a whole world of hurt right now. it is a matter of looking over the next couple of years and making sure that economics work at those prices. not a lot of areas in marsalis network below three dollars, but below threeat work dollars, but if you are doing things the right way, you can --k below a dollar $.50 $1.50. the economics work under almost any price scenario, but just not a lot of producers like that. alix: that is so optimistic.

thank you for joining us. joe: we will be right back. ♪

-- next not miss last week, we will be looking at huge things like chevron, twitter, facebook, you name it. looking into the terminal, sales .urprises, they are up by .5% we want to see if we'll keep getting these. joe: another thing, lots of economic data coming out. theriday, we will have measure of how much employers are paying for workers. it is earnings and it has been

accelerating. if we continue to see that, we will expect things to pick up. that is all. thank you for watching. alix: see you on monday. have an awesome weekend. ♪ ♪ this is a great place to work. not because they have yoga meetings and a juice bar. because they're getting comcast business internet. comcast business offers convenient installation appointments that work around your schedule. and it takes- done. - about an hour. get reliable internet that's up to five times faster than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business.

>> square has quietly followed to go public as the market heats up. ♪ >> this is a special edition of "bloomberg west" from the east coast, i'm matt miller. a fortune to his fortune. air traffic control for drones, why nasa is getting involved. tesla at $500 a share.