>> the s&p here's lost to 1%. >> technology stocks are among those having a crazy day. only to rally back into the green. >> and oil falls for a six year low. when will the pain in commodities and? -- end? matt: good afternoon. mark: thanks for staying with us. let's take a look at the markets on this monday. what an incredible day. we are not done yet. , thes dragged lower numbers on the screen telling

the story. the s&p 500 slid into correction territory for the first time in four years but it has recovered from the nearly 5.5 percent decline. the dow jones industrial average down sharply. remember, it was down nearly 1000 points in early trading. that's an improvement in the nasdaq composite and you see also lower the three indexes down for the year. next take a quick look at the volatility index. it's highests that levels since october when china unexpectedly devalued the u.n. -- yuen. route extending to commodities. down.i, it is trading

matt: julie hyman has an exciting look for us. >> we do see this recovery in the markets. are still is that we lower but it is much less of the selloff when the dow fell 1089 points. now only down about 150. it is sort of a garden-variety opposed to the once a year or once every two-year selloff. tech is really the area we have seen the most recovery.

some of the tech stocks have been the momentum stocks for the year. we are gains in the chipmakers right now. chip stocks have not performed well for the year. the past few days, it only exacerbated the performance. of concerns about fundamental demand and memory chip pricing as well. these are guys that are bouncing back. micron and site works and intel a little bit lesser of the degree. apple is one of the highfliers on the year. his stock is negative despite the gains we are seeing. some analysts coming in and saying it was a good buying opportunity and tim cook in a letter saying that chinese iphone demand is relatively strong. that and the fact that it has sold off so much. remains the best

performer even after the selloff. they have made a full round-trip and is up by about 3%. a lot of the tech names are helping minimize the losses today. a pretty stunning recovery for some individual names. take a look at where the markets are now. tom, thank you for joining us on this very busy day. you just heard julianna give us a synopsis of where things are right now. give us a timeframe of where we are. >> it looks like a market that opened in stunning fashion. a full-blown panic and a lot of stocks dissipated. i think the market trading started last night because we

were really busy dealing with a lot of incoming e-mail traffic. i think people had a genuinely hard time sleeping last night. even though people looked at the , the market was looking like it was tipping. can't not because of their own conclusion but because of what they were seeing. you know, it is remarkable because it is turning out to just be a regular read day. markets are still down here today. where do you expect them to finish out the year? laszlo brady saying that he thinks there will be a recovery.

image, but we will regain what we've lost. >> i think that you will have a huge bounce. other markets that have been selling off, and people think the u.s. really deserves it. these markets are up double-digit. the s&p has been flat all year, so it's hard to make the case the s&p should tip to the vortex of massive declines. the fears we have seeing, is there a possibility those fears are overblown? >> it depends on who you talk to. there are folks much more involved in king that the devaluation was an attempt -- their currencies were pegged. they do not want their currency

to strengthen. it looks like it was done a little early. the devaluation was only a few percent. to only be vietnam and cosmic stan. if you are betting on chinese growth at 7% and it's not even five, that's a little scary for global commodities prices. >> that's right. how much damage is the global economy going to take if it is only growing at 5%? i think the reason that you can be bullish on the u.s. is there's a lot of things that can take the mantle from here.

u.s. housing, u.s. investment spending. remember china's surge in investment was about $1 trillion over seven years. is $1 trillion today. mark: investors are trying to create a little bit easier than we've had overnight. climateerious market equilibrium? -- how do you see the market finding it equilibrium? >> mergers could continue. theould be that now that dollar isn't as strong as early the headwind for earnings is less. you have used the word

confidence. it does that mean this is more psychological? clients were not actually selling, but they knew there was a lot of selling. it could be computers trading against computers. matt: what you think about corporate buybacks? investors may be think they can do something better with the money and everybody likes to get little bit of money back. are we going to see that continue? maybe even apply? sex i think buybacks only makes sense when the return on your buyback is better than investing your capital. look at our -- earnings versus are away or r.o.i. c.

the last six months, buybacks have not helped the stock market. but companies that have raised guns have been outperforming the market since may. that are hiring and really expanding are doing better than the companies that can't think of anything better to do then buyback their stock? >> correct. it is outperforming the market and has not happened for four years. matt: we'll look you'll stick with us for a couple of minutes. i want to take a look at the top stories from bloomberg this hour. if you think your portfolio looks bad, let's look at the losers. mark zuckerberg lost $1.9 billion on paper and just as this was down $1.8 billion. warren buffett lost $1.7

billion. the companies all down today in the billionaires. i'm finding it difficult to feel sorry for those guys, mark. have multiple billions left, i think you're going to be ok. the price of oil keeps falling. west texas intermediate is down. below $39.18. week, they said they could get worse with oil falling to $32. down below $44 for the first time since 2009. a new survey suggests a vast majority of economists expect janet yellen to raise interest rate before the end of the year. believe themists

fed will raise rates but only 37% believe it will happen us in a september. to an economics professor at dartmouth college and former policymaker of the bank of england. understand that you may be at a turning point but you often don't know that you are. where the rate rises off the table and maybe the next move is actually loosening. that movement is coming closer by the hour. mark: matt miller mentioned that the survey took place before today's global market selloff. the interest rate will eventually top out at 3%. say the fed is about to make a dangerous mistake. he warns that raising interest rate would be a serious error that threatens the major

objectives. price stability and financial stability. that is a look at the stories this hour. bloomberg market day continues in just a moment. ♪

matt: take a look at what would

look pretty bad if you hadn't seen the markets earlier this morning. down 103 points. so it has come back. the dow jones industrial average back about 900 points since the drop at the open today. not a bad day for recovery. in the nasdaq still down. only about .5%. the one s&p 500 group is gaining today. mark: interesting to see all that read on the screen and realize it was much worse than it is right now. matt: i was genuinely freaking out. the dollar, a lot of the stories said investors are scurrying for safety of so and so asset. back to the dollar. it you can see that we have come

down considerably in the past 1, 2, 3, 4 days. i have a four year chart on my terminal. that's not because the dollar is in safe, right? that's because the fed futures show that we expected a total increase, and now, not. >> think it is relative interest rates driven by bank policy. these will, a lot of multinationals have had a tough time because the dollar has been so strong. on the other hand, most of the stuff they buy to sell to us is from overseas, right? >> yes. that industrial companies compete with europe are not only

losing market price but their margins are getting's least. i think it's been a real problem for the ones to sell overseas. about global stocks? what is this flattening mean? >> when you average currency and compare year-over-year, it represents either the headwind or the tailwind. essentially up 20% year over year. talking mid-single-digit by the second half. and even then next in the first half. so what i think has been a huge headwind, we have seen companies talk about market pressures. even if walmart is facing pressure overseas, it does do about 40% of its business overseas, and compressing margins. stores of other big-box

selling stuff into a housing market that is booming and the stuff is cheaper and cheaper. >> lower prices is a large tailwind. correct. i have beennd asking people if consumers will spend this money and it looks like in the first half -- >> they held onto it. matt: or they paid off debt. they bought a new car, and they were paying off debt. now the savings they will continue to get at the pump. >> when consumers saw gasoline lower, they were hearing on the news or whatever that it was temporary. now that it has stayed lower, i that we start to see

people may start to spend the savings. with all that has gone on and , doese are seeing today it give janet yellen and policymakers cause? will they rethink raising interest rate as most able seem to think they will do next month? >> there is what the markets want and what might happen. i think markets would prefer rates to go higher because they are tired of the artificial rate. and i think it interferes with price discovery. you can see it in your bloomberg function, investors are pushing off the dictations from september to december. i know economists are thinking the more your base is, economic factors justify doing it in september.

if the end of the day, it's not inflation and employment, it is things that would drive both. our survey shows that fewer and fewer expect a rate increase. the functional bloomberg shows the markets only a 24% chance now of an increase. a week ago, it was more than half. there, think you for joining us. golden opportunities in silicon valley. that's story, coming up. ♪

mark: a lot of money lost in made in silicon valley today. and are nowway down gaining or even close to even. matt: cory johnson's in san

francisco and back where he belongs. corey, it is a pleasure to talk to you via our light. any way of predicting which stock will get hit worse or which ones will recover? you look atsee when moves like you saw this morning? >> today was fairly remarkable. we still have a little bit of time left here and we will do what happens rest of the way. when you think about a source of cash, you think about what names of been defined by the trading and the momentum play that has had tremendous runs. companies like netflix, electronic arts, ea. other companies involved had to have an. , lot of those companies

without any corresponding gain in the cash flow or profit. those are the gains that have gone up because they've gone up. those places, the big money managers might take a little money off the table if they sense a change in direction here in the markets. not for a couple of days but the next few months and beyond. mark: they might be a victim of their own success. what about their level of exposure at this point? >> you can write a book on trading netflix alone over the last year. the company has made a conscious decision to throw money to marketing and content costs and give up on the pursuit of profitability. the prophets have not been there as a result.

is been the biggest mover and correspondingly, earlier today, it was the biggest loser in the market. i talked to one analyst that told me that talking to a hedge fund trader, he was told that the biggest winner this year, he said netflix. sell that one. inhink that is not unique times of panic like today. mark: cory johnson, think you for joining us. is this market selloff made in china? bloomberg market day continues in just a moment. ♪

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bloomberg market day. with mattrumpton here miller. let's get straight to a check of the markets. julie hyman joins us on a day that has then all over the map the opening bell. >> and it continues to be, mark. we were at the height of the session ended it back down a little bit today. still not anywhere near the magnitude that we saw earlier with the s e 500 defend by more than 5% as he got underway this morning. wehave been monitoring it as have seen the volatility down 1.6% right now. see, definitely at the upper end of the range, take a look at the bloomberg terminal. this is the fifth day of the selloff. as you look at the trajectory, these are individually the intraday charts. see very clearly, a change in

direction. we endedhe other days at the lows of the day and we are still several hours away from the close, so don't want to make any bets on where things end up but the trend has definitely changed, the direction has definitely changed. in terms of the competing elements in the s&p, the broadest benchmark we can look at, here are the biggest declines. relative to their size and their market cap, which are dragging down the s&p the most? exxon mobil representing what we continue to see in energy. a selloff in oil prices and energy stocks. wells fargo in financials. down, but definitely coming back. in terms of what contributing most any gains, we are limiting the loss in terms relative to

rate. intel upup by 1% and by 2.3%. both stocks recovering from declines. the company being acquired by southern company, that stock is up 29% because it is being acquired. we have a deal that has been out throughout the day. mark: senior market for us on in julie hyman. it has been a stunning day for the markets. the s&p down 5.3%. matt: it had been down this morning about 21%. joining us is associate portfolio manager. thanks for joining us. i wonder what you make of the moves. calmly told us that he thinks a lot of the trading at the early

open was computer trading that took us down so far. but who is behind the buying is the question i have. >> you have two problems that are somewhat interrelated. one is the problem with china that was really an act that it waiting to happen. thing has been continuing since last october. i think what has happened, you have a collapsed interest rate. ec asset allocation funds moving are more andhat more attractive given the very low rate of interest. i think the asset allocation are gravitating towards the consumer sector. largely domestic companies with

-- the price of oil declining will augment consumer incomes. they are going to be spending. areas, then consumer auto-parts companies leading reasonably strong stock. today, you see apple with a monstrous amount of free cash flow. netflix which i personally think is overvalued. they are pretty good. it will reflect the problems and give us a bit of economic

growth. there are very little places to put it. how significant are the liquidity problems? with the buffet camp that you will see where the problems are and most of these problems are in the emerging markets funds. particularly in the energy-related credit. i think you'll find when the dust settles, it may have been maintained through a computer system. we seldom the price. certain thatly

carl is going to be proven to be right but we will not see exactly the problem. you mentioned all these companies have so much cash. apple is a huge example of that. timely was just on and said that capex or that boost forecast it do better than companies that are just buying back shares. >> if you're going to have a return on the project, the world is not need more shock and all. industry, it is a perfectly well-managed and monstrous amount of jobs.

advised notbe well to spend the money. moneyot think spending creates wealth. it is allocating capital properly. i think a good example of a great capital allocator. have about a minute left but i'm curious as to what your rules of the road are and what you would suggest your guidelines be for investors when they go through a rough time like this. >> the first thing is to believe in yourself. put your money where you have the most confident. understand where you are. is keen percent to 25% cash

flow. that is pretty good when the rate of interest is 1%. gets in yield. fund.is a government bond it is not going away. there's the peter lynch there he. there are a lot of obvious investment opportunities. as winston said, keep commentary on. larry, thank you so much. let's check some of the other top stories we're following on this monday. the white house press secretary speaking to reporters and says the treasury department has been closely monitoring global markets, including the financial markets in china.

>> there is no doubt the global economy is more interconnected. there are a variety of reasons for that. technology is not the least of it. but what i would encourage people to evaluate is the ongoing strength of the u.s. economy. mark: they declined to rule out president obama endorsing someone and the president plans to vote in illinois for the primary. he said everybody is pretty interested to find out if mr. biden will enter the race. will a u.s. senator support the nuclear accord with the islamic republic. she has repeatedly backed sanctions against iran to drop its nuclear program, pressure to do that. but these measures haven't worked. harry reid has come out in favor of the iran new year deal.

reportnt obama needs a if the republican-controlled congress passes a resolution rejecting the deal. matt: traveling -- mark: traveling to las vegas, the government spent millions of dollars for a solar technology project. there will be a $1 billion loan guarantee program. matt: i am going to split right now but i will point out that a -- i will anchor a special show from 6:00 to 7:00 into talk about what happening today and was going to happen tomorrow in terms of this meltdown. turmoil willis crude also hit his six year low. bloomberg markets continue in just a moment. ♪

to theelcome back bloomberg market day. sony plans to enter the commercial drone business. it's sunny will offer drone services to construction, logistics, and agriculture industries. they will capture high definition images and transmit them for analysis. it is seen as the holy grail for medical researchers. scientists are getting closer to developing a universal flu vac mean that will work against the number of strains of the virus that could eliminate the need to come up with a new vaccine every year.

the police chief says the investigation into last week's bomb attack has been hampered by broken security cameras. the bombing killed 20 people and left hundreds of others wounded. they have released an artist sketch of a prime suspect seen on security footage and walking away about 15 minutes before the blast. no injuries reported following several explosions and a large fire at a u.s. army depot near tokyo. says thearmy japan building that exploded was stirring compressed nitrogen, oxygen, freon, and air. french president francois hollande ordered three americans france's highest decoration. they received the legion of honor for helping oil what could have been a mass shooting on a french train. they spoke at the residence in paris.

>> the gunman would've been successful. i want that lesson to be learned going forward. don't to stand by and watch. had been gunman flagged by police as a radical islamist. he is denying links to terrorism. that is a look at the top stories. stocks were not the only thing falling today. the price of crude oil in london in the u.s. dropped to the lowest level since 2009. joins us. where do we stand right now? alix: the theme we have seen throughout all of the market, oil fundamentals are not justifying the ice route. however, ubs did lower the low end of the oil range this year. on the low end, it's about $40.

and they are looking at about $30 as well. those continue to proliferate. what you are basically looking at, and this is what goldman tax calls the three these. -- d's. you have a u.s. economy better than emerging markets that is cause for a stronger dollar. local currencies are lower and you will keep producing it even because yourlower cost has gone down 20% or 30%. a backdrop of deleveraging. they change the way they structure their government and economy and are not going to be buying as much raw materials. >> we see them trading at lower ranges. his heart and parcel of what

we're seeing in china? alix: if you look at the bloomberg commodity index versus the world index, will we continue to th sea stocks divere or will they record relate? -- recorrelate? this canng how bad possibly get, you can see that they moved in tandem. they have really decoupled. do commodities have the opportunity to bring stocks lower? we see all the numbers and all this red. what does this mean for the average consumer? alix: if you have a car, you are excited about that rises the in lower. enough to off the decline, and concerns about the global

economy and the financial threats. is it enough to the markets and our pockets to entitle us to spend? i interrupted you. mark: matt miller brought it up and we were talking to tom lee about this. earlier this year, americans, unless you want to buy a car, they really weren't spending. they were pocketing this money. alix: that is different from europe. i have no idea. perhaps there is some financial shock, pay down some debt if there is any left over from the financial crisis. money onending the gas. we are traveling and we are using it. the cars that we use are much more fuel efficient. how many miles we drive does not correlate right away to gas

demand due to that fact? >> you're going to be talking about this and a lot more starting this afternoon. we have a one hours vessel for rock p.m. to 5:00 p.m.. going to get marks take about what is happening in the market. about gold and see what he says about that. he made the call just in the beginning of august. he turned bearish and he sees much more to line when it comes to talks. he measures the breadth of the market to see where the s&p is going to go. mark: how smooth is our crew? microphone problems and they hand you one of these. >> i feel like a rock singer right now.

still ahead on the bloomberg market day, little discuss with the market moves could mean for the u.s. federal reserve. perhaps not so fast. more on that when we return. ♪

welcome back to the bloomberg market day. he's already on your screen today, but we should stress it is better than it was this morning. the markets are off their lows of the session. moreday coming a little than three weeks before the fed gathers their september meeting. photo today's market screen give pause about raising interest rates? , thank youeporters for taking the time out on this easy day.

things.one of those it can you really anticipate this? going well but there is some geopolitical factor that may weigh in on how fed policy makers think. >> i was a bond traders and currency traders are putting a lot of money on the fact that the fed is not going to straighten in september. -- hike interest rates in september. it is a lower percentage chance, ofut 24%, down from 34% as friday. it has been a big shift down. and you see the dollar plunge against the euro. this is the bet that people are making. that the fed is not going to proceed as people had expected. something younot can see on a chart, is it? >> you even see some defections among the community of

economist. one of the themes is how much more dovish the market has been relative to economists. we have some economists saying it will be pushed back to december. it remains to be seen if it is going to happen. they will put it through some serious this. >> barclays moved it from september to march of 2016. if the fed does not hike in september, what does this say about their credibility? their ability to be independent of markets and move forward as they he fit? mark: can you really be independent of something like this? >> independent in what sense? they are responding to the fear felt in market. i have not seen one person really quantify just have significantly the china slowdown will affect the u.s..

thate question policymakers will be asked him. they're going to be asked in those kinds of tough questions. what is the transition mechanism that will affect the u.s. economy? there's a difference between the u.s. economy as a whole and the end he market. the last time we had a high in of s&p 500, it was october 2007. it was after libor and the concerns of the housing market. >> is the u.s. economy strong enough to withstand these headwinds? >> when i have talked to sources in the market, you see a great deal of bearishness coming-out of weeks and weeks of buying. it 30 year treasuries, longer dated corporate bonds. this would not make sense if you

are really bullish on the u.s. economy because if inflation does pick up, these bonds would not be as valuable. on thecould be bullish u.s. and bearish on the rest of the world. and when the fed goes, whenever that is. is of the biggest questions what happens at the long end of the curve versus the short end of the curve. we will have to leave it there. thank you both so much. coming up, mark father joins. to talk about the turmoil in the markets. that is at 4:00 p.m. new york time. stay with us on this while day on wall street. ♪

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mark: it is 11:00 and san francisco and 2 a.m. in hong kong. olivia: this is the

bloomberg market day. mark: good afternoon and thank you for joining us on this market day. this is mark crumpton here with olivia sterns. >> what a turbulent day has been -- a selloff across the board, even if we are off the lows of the session. julie: turbulence indeed. we are seeing stocks move back down a little bit with a loss of 2% across the board. we saw them make a run at recovery and then fail at that. let's look at the s&p 500 to get an idea of what we have seen. we saw it fall as much as about 5.25%. now it's turning back lower. person that bloomberg crunched the numbers and found the last time we saw an intraday swing of this type of magnitude from a loss inta