side -- stateside. alix: coca-cola going on the defensive. what we have about the company's next steps. scarlet: we tell you what to watch out for. ♪ as scarlet: good afternoon. ugly day. alix: we want to get straight to a look at the markets because you're looking at an smp off at 1.5%. the nasdaq the worst, down by 2.5%. are raising all the gains for the year. you can blame it on the

emerging markets once again. the night, it was engei devalued by 28%. the central banks. this is about the weakness in oil, isn't it? around 47 is really going to hurt this country, especially when it's main index or regions are russia and china -- are russia and china. scarlet: we talk so much about the spillover effect in the u.s. chart of five-year u.s. stocks versus emerging markets stocks. &p has done quite well. the emerging market index is the redline. the u.s. markets have been

resilient in the face of volatility. as we talk about the emerging market weakness, this is what it looks like so far this year. we have basically looked at the s&p 500 down for the year but little change. threegaining as much as point 3%, falling as much, emerging markets are down 13%. i'm guessing you will see more of a trickle-down effect in the coming quarters when the companies in the s&p 500 start showing up in the earnings. alix: part of the reason we are stocks hold up and do so well is because of the momentum stocks like netflix, amazon, google. if you have starting to roll over like we saw media stocks, what is there left to hold at the market? utilities is what was supporting markets in august. scarlet: that will not cut it. they were the only group in the

positive today and they have since turned negative. scarlet: we talk a lot about the global growth issue. asngs might not actually be bad as you think. you're looking at the ratio between the baltic dry index versus copper. as you can see, the baltic dry index has risen a noticeably since june, coming off its highest level so far this year. barclays came out and said perhaps the worst of the global flowing could be behind us if you take a look at this index and the measure of demand growth among emerging markets. contrarianlike the view. a great chart. let's bring in the senior vice president of global investment strategies -- jeff, what do you make of this selloff we are

looking at. usually, investors have left for vacation. then the 10 day average. there are participants. >> this is the volatility money investors have been waiting for. it has been a quiet year when you look at the index. we're finally starting to see the volatility we talked about being coupled with rate hikes on the horizon. this is what that all comes back to. in 2013, we had the taper tantrum. we saw a number of countries devalue their currencies. a big selloff in emerging markets that spilled over to developing markets. this is the height hysteria, similar to the taper tantrum. possibly, the same payoff as we

get closer to where the rate hikes begin, markets may begin to bounce back. alix: something very characteristic of markets in the u.s. is buying the dips. what is your prediction for how bad this will get for u.s. stocks? >> i think the u.s. stocks are a little vulnerable given how soft earnings growth has been. you could certainly see some volatility in the u.s. i don't think we will see losses on the s&p 500 this year but a lot of volatility on the way. i think in europe, it is an interesting story. we have seen in a percent decline in the last month. valuations are pretty attractive the cuts here is the -- because here's the interesting story -- earnings are going up in europe. the last four months, we have seen this quarter higher on a year-to-year basis. on a trailing basis as well.

earnings going up as prices are going down, making the stocks more attractive. scarlet: there's more optimism when it comes to europe but what about the political angle? tsipras about alexis planning to step down. that invites a lot more questions when it comes to the greece bailout. >> greece is still going to suffer economically. it will remain in the news as it relates to the lingering issues. there's a 50-50 chance greece ends up leaving the eurozone over the next year or so. i don't think, however, that we will see weaker valuations in europe. remember mainstream parties have largely made a comeback across europe. we see that in spain now, very important. we certainly saw that in the u k earlier this year when the thatrvatives swept

election. we see a political mainstream resurgence in europe despite greece. alix: what has the commodity deflation fears? how he reconciled the fact stocks are getting pummeled on a day when the oddity index is rallying? >> that is a great question. it is an interesting move and some of the markets, particularly oil. you seen the dollar down so far this month and oil is falling due to increasing supply. increasingly, this market will be driven more by the old economic fundamentals of supply and demand, which is different across different commodities. rather than them all being driven together by a macro factor like the dollar. alix: does that mean it doesn't correspond to energies, materials being the laggards? can we see some divergence between the stocks and the underlying fundamentals? >> within those sectors, you can.

they will remain under some pressure but there can be winners and losers. you see different inventory situations, different supply an d demand. scarlet: you mentioned earnings. this is an analysis of the growth we have seen in sales and profit. first of all, sales down. in the secondwed quarter and are expected to in the third. and they are expected to pick up and post an increase of almost 6% the first quarter of 2016. it is a similar pattern wanted comes to earnings as well. given the volatility we have seen in the emerging markets, the commodity spiraled downward. how over estimated are these earnings and sales productions? >> they may be a touch optimistic. the estimates from strategists tend to be lower than the one from analysts.

think the concern, the fear over how widespread the global economic slowdown is is overdone. china's main growth engine is as consumers, not commodities. the latest data still looks solid with study double-digit gains. and the service sector in china is moving up. it is moving up every but as rapidly as many factoring sector is slowing down. i see the same thing when i look at the citigroup economic surprise index, which has been rising over the last three months. bitflow don't story is a overdone. certainly, there are pockets of weakness but i don't to get will dramatically lower valuation. alix: what do you do when you have the momentum stocks rolling over? we are measuring netflix's rice over the last year.

you can see we're getting close to that level. it has not been below that level since march or april. does it mean if these guys can't rally anymore? >> buybacks. share buybacks come back. you have a lot of corporations with a lot of cash on their balance sheets. the big buyers over the last several years have been the corporations. they can do that again. share prices have pulled back a little bit. they will likely see that come back. we are looking for the marginal trade or hedge fund. scarlet: buybacks have helped support the market for years but with the fed getting ready to raise the interest rate, the cost of money will be less cheap and investors may not have the patience or willingness to have companies use their cash or

leverage up buybacks. we see how it has hurt companies. willbe that something -- that be something investors will reward companies for? >> leveraging of, probably not. --y will take the best uses a look at the best uses of their cash. it is another way to move shares out of the market. i think that will continue. markets will reward. stocks will move higher. there is a powerful amount of money. 2% of the market cap being moved in terms of cash m&a here and in europe. bign't think we will see bear market, just more of this type of volatility. alix: you're looking at the fundamentals. how do you rebalance your portfolio for the next six months as you prepare for a fed rate hike as we see significant declines? >> you want to make sure -- this

is not the time to be overweight the stock market. it is the time to sit back and wait for opportunities. right now, whatever your long-term allocations are, i think you do want to look overseas if you haven't had a lot of europe or japan exposure. is stronger policy than what we see in the u.s. and can provide a buffer on the downside as we go through a bumpy ride the next quarter. scarlet: the shanghai composite index has seen a bumpy ride with sellers. what will you look to to get any kind of indication of whether fund managers are in a bid to raise cash in order to meet redemptions? alix: we see quite a bit coming out of hedge funds. >> is interesting to see over the last year to date, we have seen money flow out of u.s. equity mutual funds.

but it has flown into international funds. we may continue to see that shift as funds liquidate assets in the u.s. but increasingly i buying overseas. -- are buying overseas. rsthink it is one that bea watching and could continue to put pressure and volatility in the u.s. market. marketbout 36% of participants think the fed will hike in september. when you see emerging-market currencies falling off the cliff, do you think that changes the game for the feds? >> the market moves are probably overestimated. i think the fed does pay attention to what is happening globally with currency but the more countries remove their peg or adjust their peg to the dollar actually might make it easier for the fed to do this.

china devaluing its currency and moving away from a tight peg to the dollar means it is setting policy for the two largest economies. it'll need to worry about tightening financial conditions -- they don't need to worry about tightening financial conditions in china. it gives us a little more freedom. alix: thank you for your insight on a day we are all trying to digest what is going on. scarlet: we will continue to keep an eye on the selloff in stocks. the philip accelerating with the dow off by 283 points. brazil has turned positive. alix: brazil of all places. scarlet: we will keep an eye on that one as well. ♪

scarlet: welcome back to the bloomberg market day. alix: we will go straight to julie hyman, looking at the markets. julie: can't keep up with this today, i have been hitting refresh a lot on my bloomberg terminal, trying to figure out the biggest drop since when. the dow trading at its lowest since december 16. the s&p 500 and big al having the latest performance since late january and the nasdaq at its lowest since april 2. kids today drop is the steepest since october 13 of last year. let's take a look at the dow on the entry-level. at the debts of the session, we had the dow down as much as 307 points but it has been bouncing along, making ever lower lows

throughout the session as we do have this spreading concern about the global markets and global growth and economies. you just heard alex and scarlet talking about it before the break. we have seen a breakdown of the major averages. the percentage of stocks trading below the 200 day moving average. you can see we have seen a deterioration. right now, we are around 30% and 37% of companies trading above their moving averages so that has been going down. breakdownve seen a for today and the fab five. these are the stocks that have really contributed somewhat to the gains in the s&p 500 your today -- year to date. they gained we saw in stocks

overall for the year were a convertible to only a handful of tocks -- were attributable only handful of stocks. amazon, the second-best performer in the s&p 500 today. facebook down today and the others we are looking at -- google down 1.7%. apple down 1.7%. all of these stocks breaking down and there is continued media carnage set off with disney coming out with his attorneys -- with its earnings. bernstein coming out and downgrading disney and time warner. these guys are going to do a lot of work to catch up with the likes of netflix.

the s&p 500 consumer discretionary index having its worst day since 2014. micron is trading lower on a downgrade. analog devices getting hit by a downgrade. a lot of concern about memory chips in particular. and we have gartner out with a day saying we saw second quarter smartphone sales fall in china for the first time ever. raining.one demand is that is not a good sign for china. take your pick today of where to find the selling. go figure. commodities are not taking a hit. the selling is very concentrated in stocks today.

scarlet: they were in the lead for so long. thank you so much. alix: now to a look at the top stories. scarlet: degrees prime minister announcing his resignation. in a national address, he said he is determined to honor the latest their let agreement. earlier, we spoke with professor of economics at the nyu school of business. >> the uncertainty would mean everything is going to freeze until the end of september. there will be more unemployment, recession by the end of the year. right now, the european union is the last resort for greece. this is how greece survives.

scarlet: greece just received the first portion of the aid money. suppressed in the name a date for the money but a vote could be held on september 20. the number of americans filing for unemployment benefits state historically low last week. since march, the total has stayed below 300,000 and that is a level typically associated with an improving job market. scarlet: there was an unexpected drop in leading economic indicators last month. the slump in building permits caused by a new york tax credit. stock prices also fell. existing home sales rising 2% in july to the highest level since february 2007. the real estate market has continued job growth.

headlines andive we still see the dow and s&p 500 and nasdaq off by over 2%. much more ahead on the bloomberg market day. scarlet: we are heading to the close and it looks ugly right now. we will be back with the cha yort you don't want to miss.

alix: and s&p 500 off by 35 points. look at the s&p 500 versus 200 day moving average and you can read this -- you can see this ugly decline we have seen over the last few days. july andthat level in rose above it and bounced around that level a few times. it was able to hold and has

broken down. scarlet: we flirted with that level the last few days a couple times. when you look at the sector breakdown, utilities have done better overall. this is the utility index. the fact it is going up me to till it he's are outperforming the fact it is going up means utilities are outperforming s&p 500. can you rally utilities alone? that is the question. there is much more coming up on bloomberg market day. ♪

alix: welcome back. let's get straight to a look at the top headlines this afternoon. shares of twitter drop below the

ipo price of $26 down. triggered about three weeks ago when the chief interim officer said it would take a while before twitter is able to release a slowdown in twitter growth. valley of pharmaceuticals has agreed to buy the maker of the female sex drive phil. -- pill. it will pay extra the company reaches certain milestones. they will start selling the drug in october. another small rebound for crude today. we closed a little lower by about .4%. oil has also lost a third of its value since june. earlier, we talked about government regulation.

>> with this government in particular, there is a very strong desire to control the industry as if the industry doesn't know what it is doing. for the last seven years or so, this administration has been determined to tell the industry what it can and cannot do when the industry knows what to do. alix: citigroup saying if surplus persists, we could see oil at $32 a barrel, the lowest in seven years. no one is saying but pedestrians walking into tijuana from the u.s. no longer have an uninterrupted stroke. mexicans-- stroll. foreigners get in a line and roughly $20 for a six-month permit. airways buying eight boeing airliners after posting

its strongest full-year earnings since 2008. >> it is a very volatile market. we don't give a range or forecast given the large element of movement that can take place. we believe with this .ransformation program the new dreamliner's will be delivered 2017. ever wonder what happens to her off?is when it is dropped a this video offers a glimpse of the airports massive transportation network, something travelers rarely get to see. pretty awesome. those are your top stories. it is a change in forecast for the weather company the weather

channel. its owner has reportedly had talks with media companies about buying its business. they also hired morgan stanley as advisors. earlier, betty liu spoke with alex sherman and david westin, president of abc news at the time when the company was looking at possibly buying the weather company. they discussed they discussed-- who might be interested in buying the weather channel. >> we don't know that much about who might be interested. we know a lot of companies that have been pitched. don't know if any of them are interested at this stage. think about all of your general google,mpanies and yahoo!, that type of company. none of these players are particularly interested in buying this. even though david kenney gave the nonanswer, the owners are blackstone and nbc universal.

you are going to be sold, does the fact of life. the idea here might be that you pay -- the businesses have shifted so much that the channel itself is actually the lesser of the businesses. the digital and the data are worth significantly more than the tv channel, which is an independent tv channel and -- ifndent tv channels you're are not a must carry like the weather channel -- you are a lot weaker than you were seven years ago. >> we look at it at disney. years ago, 2008 when they sold it. if we had bought it, we were going into news. we didn't believe there was a lot of growth in cable at that point. we thought digital hub and underexploited at that point but

we weren't sure we can monetize it. it is hard to get a motor on that business. betty: no one knew at that time those videos would generate that much money. when they were putting out the viral videos. it was in its early days. there was no buzz feet, right? >> but now you can't get a corner on that market. there is no motor running, pricing power. >> it is also not where the bulk of the money comes from. the data itself is where the value is in the weather channel. a lot of that data is used professionally. values where a lot of the is these days. the consumer facing media properties are probably not worthy value is and that is why .edia companies know

comcast owns 25% of the weather channel. from our understanding, they don't want to own the entire thing. >> they tried to integrate with nbc news and it didn't really work for them. i think they are little burned by the experience. betty: does it make sense to split the company and sell it into different parts? >> that is what the bankers have been hired to try. >> is also the pattern of traditional media companies. it is what news corp. did with 21st century fox. you take the part you think there is some growth income in this case digital, and separate it. is maxedable overall out. called the bade company now. it is the mature company. >> it was the place to make money in the 90's but it turns around very quickly.

>> and we see that across the board now. the weather channel is an independent network so it doesn't get the leverage of espn or fox news. even those companies are starting to pull back as analysts start to downgrade the entire sector. thinking it may be worth $3.5 billion? >> we will see. i'm not sure the owners will sell if they cannot get around that price. they will probably hold on to it . alix: coming up on the bloomberg market day, big tech earnings coming out ahead of hewlett-packard and sales reporting second-quarter numbers after the valve. -- bell. we will tell you what to watch for. traveling from san francisco to become a0 minutes may reality. the latest happenings with the hyperloop. kazakhstan is the latest

emerging market to get control of the exchange rate. we take a look at how the currency is affecting world markets. all that and more coming up. ♪

alix: welcome back. time now for a look at the markets. we're still looking at a proof -- a pretty brutal selloff in the market. the s&p 500 down by 1.5%. julie: the markets have been flirting with different levels throughout the day. will update you as we get past the close. the dow was down by 308 points earlier. not at the lowest of the session. it is at least the worst two-day performance since late january. and the nasdaq, the worst

two-day performance since october and we definitely has some selling no taking the s&p 500 lower for the year to date. take a look at the averages for the year to date. the nasdaq up 3.5%. the s&p 500 down and the dow going more deeply into the red come at its lowest since mid-december with a decline of -- into the red, at its lowest is mid-december. this is boiling over into the stock market. initially, the selling was concentrated in commodities because many of these countries are dependent on production of those commodities. ofchina, they are consumers commodities. it seems to have boiled over and has affected stocks. when weighted measure the sentiment -- one way to measure the sentiment is to look at the

foot to call ratio. at my bloomberg terminal. this is from a story today. ratio. the put to call sentimentflecting the to the direction of where the s&p 500 is going. the higher this is, the worse the sentiment. another measure is the stock we have been watching closely. earlier, we talked about fat five. twitter has not been so fab. stock that gets pushed around a lot on days like this. pushed around so much that twitter earlier today touch the low was price. take a look. i have a chart of twitter since its ipo in 2013. you can see a lot of ups and

downs but i does never gotten that close to $26 until today. this is one of the items of suspense. will twitter fall below the ipo price? alix: you have to think there will be some sort of buy sell order and what kind of momentum selling we might see after if we do close below the level. thank you so much. got to a look at some top stories. shares investigators claim to recommend prosecutors filed a vehicular manslaughter chart against caitlyn jenner. investigators found that gender was driving unsafe for the road conditions because her suv rendered -- rear-ended a lexus. the case will be presented for final review next week and if convicted, gender would face up to one year in county jail. getstill have the chance to

a fabulous sum valley estate owned by the lehman brothers. forspread has been delayed more weeks. you'll have to make a $500,000 deposit just to make a bit. a pinball machine from the simpsons is among the items coming for auction. the show creator died from: cancer in march and their selling his entire personal collection memorabilia, . items include a simpson machine with a presale estimate of $2000. those are your top stories. hyperloop, the project to revolutionize the way we travel, just got more real. the company announced it has secured key partnerships to assist in the development of the futuristic railway and joining

me to discuss is matt miller come in for emily chang. who did hyperloop partner with and why is it such a big move? matt: hyperloop has partnered with a lot of different companies. they are formed out of a crowdsourcing group made up of employees from boeing, nasa, spacex come and a number of different contributors that get equity stakes in return for their contribution. but now they are partnering with the company that invented vacuum , theology and aecom world's biggest construction and engineering company. they are preparing to break ground on the first real hyperloop in 2016. it is incredibly exciting and i very excited to talk to the ceo and bloomberg west at 4:30. how cool would this be? they will travel 760 miles per. alix: if that could happen to

take me from here to massachusetts, game changer. talk about elon musk. this is kind of his baby. what is his involvement? matt: not really any at all. he wrote an alpha light paper describing the theory and the idea and then said i am really busy right now, someone else do this. that is what derek and his group have done. they have 400 employees working to build this first prototype, a five-mile stretch between l.a. and san francisco just to test it out and see how it works. it is fascinating how little energy it will use. the whole thing should be powered by the solar panels on top of the hyperloop and windmills that will be set along the hyperloop along the way. what you do is suck all of the pressure out of this tube and make it incredibly low pressure

and you can shoot the thing back and forth. there are skeptics who stole a believe it will ever work and there are some people who say it could work but it will be way too expensive to build. i, for one, hope they have been going everywhere. alix: i have cory johnson sitting next to me and he says people don't think it will happen. cory: tesla would be a viable company. alix: a good conversation. thank you so much. tex companies are expected to report after the closing bell. -- tech companies. we will hear from salesforce.com. here with a preview is cory johnson, a bloomberg editor at large. which company is the most important right now? cory: i love both of these

stories. i love hewlett-packard stories. it is a culture at your so deeply about and at the same time come a total disaster. it is hurting more than many of the big enterprises out there. their transformation to be in the cloud has been a disaster. they have a revolving door of ceos. meg whitman seems to be clearly in place right now but these earnings will be very important for this company because one of the things they will need to sell is we will have a free cash flow. we look into the numbers and the failed shrinkage and how bad that could be. within the last hour, one of the analysts lowered his estimate come bringing the average down -- estimate, bringing the average down. we see what numbers they will beat.

what is interesting is to see the scope of the shrinkage of this once mighty company. alix: in the meantime, a global selloff in stocks and real concerns about china in the government's ability to profit. what might we hear about these macro themes? biggest macro theme affecting hp is the change in the world of computing. they don't want to buy as much. i will add that you saw on the results from cisco that enterprise purchasing is happening. we saw those results in tech data today. the companies are buying technology, just not hp technology. grow but salesto growing at the slowest pace in many years. the company has been unprofitable.

finally, they are targeted on going after the same companies with bigger marketing dollars spent. you could not see them much in the last year because they did so many acquisitions. billions andg acquisitions, they have seen improvements of millions in their sales. whether we see the slowdown continue -- 20% growth is good. we can but it is not what saw a couple years ago. when you look at the losses, $232 million last year. this is something to be concerned with is the environment is changing. alix: and there has been an m&a premium and the stocks. how much more is in that? that we know there was a bid. there has been some speculation it was microsoft. we'll know what kind of bid it was.

was it far below the current trading price where they are putting a put in there saying if you ever want to sell this for $40, we will be here. we know it is not to the liking of the sales force. it was not good enough for the board of directors. you have to believe the future is going to be very bright to believe this company is worth this price. the board of directors decided not to take the offer. we don't know if it served. microsoft has never come back so it might have been a one-time offer. alix: thank you so much. we are looking for those numbers after the closing bell. a lot more coming up.

kazakhstan the latest emerging market to give up its control of exchange rates. a look at how it is hitting u.s. and global markets at the close. ♪

kazakhstan relinquish control of its exchange rates, triggering a 30% slide. mike regan joins us now to talk over the selloff will world. ot just in the u.s. emerging market stocks are not in great shape. what was the trigger? : china's stock exchange down more than 3%. as extent has a lot of people worried about where the next -- causing's down -- if you start adding up all

of the other countries in the region that have currencies that could devalue further, not only in that region but asia. our team had a story out today looking at the vulnerable currencies and most emerging market currencies are at multiyear lows already and there is a concern there is further -- to go. for alix: what is the direct correlation? connect the dots. mike: it causes a lot of uncertainty about what the global demand for u.s. products will be as these currencies get --ker and weaker will start weaker. if you add up these nations, the demand for our products will go

down. some of the best-performing -- netflix,e year apple, facebook, amazon -- are taking some of the hardest hit it's because people sell the winners at times like this. stocksf the highflying are momentum stocks that are trading with a lot of optimism behind them. when you need to sell on a day like this, those are the ones you see. alix: thank you so much. bloomberg stock editor mike regan. ahead, we're looking at the carnage in stocks. intoerating the downside the close, the s&p 500 off 40. be right back. ♪

alix: moments away from the closing bell. i am alix steel. joe: and i and joe weisenthal.

♪ alix: u.s. stocks closing of the lowest level since march. the selloff in emerging markets. joe: but the question is what'd you miss? more turmoil in emerging markets. when will it end? eyes on september. the bold prediction the fed will still raise rates next month. we take a look at those odds. joe: americans are moving south again. we have three charts you don't want to miss. alix: we have to begin with stocks. a brutal day in the streets for the markets. we really acceled