alix: we are away from the closing bell. joe: i am joe weisenthal. ♪ global stocks having the worst week of the year. the s&p following more than 1%. joe: the question is, what'd you miss? crude oil and a worsening bear market. when will the markets recover? spreads toeakness natural gas and it shows in

their earnings. we will talk to the ceo of ripe energy. as: new home sales plummet the economy falters. what is next? alix: we are beginning with the markets. major averages falling for the fourth day. the s&p in the dow closing at weakness fromwith the start and grinding lower. we are right around the lows of the session. closing below the 100 day moving average for the s&p. joe: some of these other selloffs not that impressive. name came out with some disappointing forecast. also really ugly with energy. materials getting clobbered. google,e names like amazon not enough to hold up the stock. the bio techs really getting hit. joe: i want to look into my

terminal and look at new home sales. we got some ugly data. housing has been pretty strong. we have got good data but we had a huge miss today. isyou can see this index stuttering a little bit. just one way we measure the housing number, other numbers looked ok but not what we want to see. alix: is that a supply issue or a demand issue? housing has been pretty strong. we: most of the housing data have seen has been really strong so we will see of this is the start of something problematic or if it will bounce back. alix: looking at oil rigs, they are back in full swing. this is a yearly look at the baker hughes oil index. charting those rigs across the u.s. if you look closely in the screen you are seeing a slow uptake when it comes to oil. you can see a little bit better

and really have to squint to look at it but it is significant. 21 oil rigs were added and then we had this huge commodities slumped and they were added in the permian basement -- basin. joe: they are picking that up again. alix: the permian has been adding them week over week. as you have these rigs, and line, production a long record highs, what will happen to prices? jo : joe: probably down. we want to see what our guest thought about some interesting comments from citigroup's head of commodities research and doris. check it out. >> in many ways what we are

seeing in the selloff is a return to where the markets should have been had there not been a little bit of euphoria about commodity land. alix: to top it off we get the news that hedge funds are net time in gold for the first ever. what does that wind up doing to the financial engineering market? shorthedge funds are net every etf except two. the vanguard emerging markets. they are long. they are normally short etf's. the isolate some of the risk we want to take a bet on. in terms of the markets, i am a little on the defensive with etf's and the correlation that they are causing -- atf's trade more than you think. the volume is really high. that is why they get a lot of news but they do not own that much. energy commodity etf's only have $8 billion in total assets.

when you look at the trading and say the oil futures, etf's, 90% is happening between two people with the etf shares. they are not going in and buying futures unless they get a new order. that trading is happening in a separate over the exchange. etf's they have democratized investing for people. once you have an etf you put everything in and 40 wrapper. anyone can buy. the fact that there is an etf provides a portal with money that might not have been there before. gld.w that with the that was a tremendous example. joe: that was a phenomenal story, becoming the biggest etf the bigorld, topping s&p etf but it has been on a downturn. how much do think the gld etf has affected the price of the metal itself? changer.was a game

if you saw that within five or six years it went from zero to $76 billion in 2011. some of that increase had to be from there is nor -- more buy orders from people who have an easy way to buy it. we have seen gold take a haircut. it is $25 billion of this way. we have seen it is right sized. at this point, you are looking at the markets involving around it. when it came out i would say yeah. you have a portal into this area changes the game. alix: i have some interesting gold trivia for you. richard bank had a note out that basically looked at the inflation-adjusted price for golden shows that it is above its longer-term average and prices should be somewhere $775 an ounce.

eric: 77 billion was a small amount of the gold above round. data fromou use the the flows of the etf to figure out sentiment and make an informed insight as to whether the -- where the prices will go? eric: the answer is no. when you see a huge creation, that is from grassroots trading. the flow shows up one day after that. by that time, everything is maybe a little different. what the tip of the spear is is volume. if you see massive volume and it is going up just like with stocks, that is a bullish signal. the flows are good for taking a step back and looking at the weekly or monthly data or an aggregate. $4 billion when into energy, energy etf's this month which is

interesting because they have been following. that aggregate data is interesting. a lot of people are trying to call a bottom and failing. you cannot make any trade runsion on trying to front the lows because they are a day too late. alix: quite a lot of the exposure tends to be leveraged. what does that due to the market as a whole? eric: you are talking about velocity shares. in leveragedion commodity etf's. -- in the case taking ine, it is more than u.s. so. you have a separate world of isge funds, traders, this who plays here. when you do take $1.3 billion and take a step back and look at the market it is not that much

but the trading volume is upwards of $200 million day. it is a growing area but the appetite is small. joe: you wrote something for bloomberg.com. people addicted to draw in one -- adrenaline junkies? eric: you could argue this is like crack. some ofthe s&p 500 -- these return 30% in the day. you have people who are going long and short. with the typically do as they wait for the one that goes long to have a good day. then they quickly go in the short one. they are laying the contrary and bit but they got destroyed because commodities have been consistently going down. the one that was up 99%, everyone was in the wrong one because they are waiting for the reverse to happen and they pick

up that -- those returns on the come back. joe: thanks a lot. .ur senior etf analyst alix: where are people most optimistic? two fascinating charts await you after the break.

joe: before the break we said we had some charts for you about where people feel the most optimistic about their economy. alix: emerging nations in africa like working a fuss so and ethiopia for saw improvement in the coming year. joe: highly developed nations

also thought there economies would stagnate or worsen. alix: i would not have thought this was the case. joe: it says something profound about human nature. maybe we need to get some perspective. alix: it has to do with government spending and quality of life improving. if he of his government will pump in more money for education and infrastructure and that makes a big difference. we are fighting about budget all the time in the u.s.. appreciate what we have and stop worrying so much about it. alix: the wall street journal is reporting the u.s. is appearing to release its [inaudible] release pushing for his in a few weeks. others say it could take a few months. arenistration officials

banking that this may is tensions with israel. joe: square has filed for an initial public offering. it processes $30 billion in payments from its millions of merchant customers. it has been expanding into payroll processes and other services. alix: at&t has won permission to take over direct tv after promising to spread broadband's to more homes and businesses. the merger creates the largest u.s. pay-tv provider. the justice department said it would not challenge the deal because it does not pose a risk to competition. those are the top headlines. the fcc has been like, no. joe: we assumed the fcc would block all these big ones.

alix: copper does not care about china pmi. joe: why doesn't copper care? alix: we make a big deal about it. they are not going to buy any more copper. city says it is completely false. if you look at the fastest-growing sectors that use , theylate consumer account for 31% of total consumption. that is that orange line there. you can see the growth trajectory. copper is still basically a china story. china is what matters to copper. us is what we see being measured in the pmi. alix: goldman sachs said -- thanks this is shifting to a consumer driven economy. on that chart you looked at building consumption for copper.

it was pretty much flat. tons compared to consumer stuff. there is a huge difference. you need to check out some of these charts on brazil. it is such a basket case. unemployment is shooting up. it is really ugly. here is a chart of it. up over 6%. no country wants their unemployment rate to have a chart like this. that is really bad. in addition, check out the chart of inflation. the brazilian cpi. the -- it looks really similar. shooting up 9%. there is this word that describes exactly this. this looks like textbooks that clay should. you have a weak economy but it is mitigated by the fact that prices are coming down. both ofcase you have them shooting up at the same time, misery. alix: you have to look at the brazilian real.

performing latin america currency in the whole region. what do you do if you are the central bank with that? them.hat could help countries often want to see their currencies. nothing is getting going. the experts are -- exports are not booming. it looks like an economy in dire need of a fix. it is not happening. the other thing that is interesting in the emerging market currency, the worst ever. woodshede it to the and acts. was replicated after manhattan. how can it quadruple its gdp? we explain after the break. ♪

building complex is mostly unused. high speed rail is committed to boost the economy. alix: i went to china 10 years ago before the olympics and you saw all these construction all over beijing putting up the same type of building. you can make the assumption that no one is moving there.

natural gas companies in the northeast marsalis region are feeling some pain. outpacingth is infrastructure expansion making it hard to move volume in and out of the appellation region. the ceo joins us now from pittsburgh. why is there such an energy bottleneck in the northeast? it helps to take a look at the marsalis over the last six or seven years. the marsalis shale has run from producing zero per day to becoming the largest gas producing basin in the united states today. a day.ng newly 20 bcf you see supply growth's from this basin outpacing the demand growth you are seeing in the northeast. that is having implications

across the country. we are seeing national -- natural gas supply outpacing demand and that is pushing -- putting pressure on gas prices. alix: a billion cubic feet a day. when you take a look at natural gas prices compared to henry hubbs, we just took one and that was dominion southpointe spots which is one area of the northeast versus henry hub. how do you deal with that when you are so far below that benchmark estimate -- benchmark? >> it hurts the industry in aggregate. the reason why that is happening is there are -- more gas inc. produced here than there is capacity to deliver to markets outside of appellation. built up bottleneck. it is not necessarily applicable to all companies appear in

appellation. .he -- appalachia there is more gas produced and the solution is securing capacity on the interstate type lines and making sure your hedging gas to protect against downward pressure on gas prices. companies like rice, we have secured the capacity and we have done a good job of hedging to protect against what we have experienced around us here in appalachia. joe: you can see the problem vividly when you look at a chart of inventories of natural gas and how they have exploded. can anything be done to solve this? do you have to wait it out and wait for some of the weaker producers to fade and that will cause it to go away? guest: yes. the solution is low gas prices. displacing a lot of the producers that can [inaudible]

and so you have seen the expected slowdown and of elements over the last couple of years and that is on the supply side. what you seeing on the demand side is you're seeing new gas-fired generation replacing coal-fired power plants. what you're seeing on a global scale with the u.s. gas production is this new phenomenon which is lng exports area do you see over the next couple years tangible demand bcrf a day. to 10 producingther gas basins. it is a pretty efficient market and there will be opportunities so we are pretty darn constructive in the recovery of natural gas. alix: you mentioned hedges are a way that you have able to stay afloat but once they run off,

what do you do when you still have northeastern natural trading one dollar below henry hubbs natural gas price? guess: you have to make sure you are hedging to the curb. alix: that will not do anything for you in the long run. challengings a rice. for companies like rice, the majority of our production is a trance ordered to markets like the gulf coast in the midwest read we have capacity that will go to canada once these expansion project go online. certainly for the guys that are stuck here in appalachia and they are not hedged, they are in a world of hurt right now. it is a matter of looking out over the next couple of years and making sure economics work at those prices. there is not a lot of areas in

the marsalis that work the lower -- below nine dollars nymex. below twoic can work dollars or dollar 50 if you are doing things the right way. for guys like us and others that are 100% within the court, have the right to know teams to get the most out of the ground, the economics can work. there is not a lot of reducers like that. alix: so optimistic. thanks for joining us. the ceo of rice energy. joe: we will be right back. ♪

some alixwe are looking at huge things and we take a look inside my terminal. by .5 of 1% to joe: another thing not to miss, lots of economic data coming up next week including my favorite data points, the employment cost index did it is a measure of much employers are paying for their workers. has been accelerating.

you might expect average hourly earnings to pick up. thanks watching. monday. will see you have an awesome week

>> from our studios in new york city, this is "charlie rose." : tom friedman is here. he is a former -- foreign policy columnist. he spoke with resident barack obama about the nuclear deal with iran soon after it had been announced. here's how the president defined the agreement with tom. : we are notama measuring this deal by whether we are solving every problem that can be traced back to iran, whether we are eliminating all their new various activities around the globe.