selloff. is the buy-in here to stay? ism: the chinese government reacting to the cutting rates for the fifth time. will it do any good? matt: the secret to being a great stock picker might be involved. one bond manager says that his high-yield bond research is help them figure out which stocks will rise. ♪ pimm: good afternoon, i am pimm fox. introducede already myself, but i am matt miller. but again with a look at the markets at this moment. rallyiously have a underway. after the steepest 2 day drop since the financial crisis, we have seen markets recovering some of the ground that they lost.

the s&p is up 44 points and the dow is gaining 300 50. you can see the dow over 2 days. the big drop yesterday morning. we closed down 588. this does not tell the whole story. it closed with a loss of more than 500 points on friday as before,0 points the day 162 the day before. it has been a rough week for the dow. this the rally does not do it at all. is higherstock market today by more than 2%. let's look at oil and gold. oil is gaining 3%. crude is up 1.5% in europe. alling. f let's look at the bond market and look at what is going on with treasuries. a little bit of a selloff going. selling.u're yesterday it was one point. i think the 10-year was below. it shows a lot of selling going on in the treasury market. let's look at this, it is

gaining a little bit of strength. 1.14 against the euro. the yen have yet to devalue their currency for a long time. the pound sterling is giving up a little bit of gain. 157 -- 1.57. matt: it was down yesterday, down friday, down thursday. pimm: the selling of the dollar. are: investors are running looking for safer assets of they're not going to the dow -- pimm: bailey say sabr assets, but we know they are's -- they always say safer assets, but we know that they are selling the dollar and buying something else. let's look at what is going on in the s&p 500. asked by is the best-performing in the s&p 500, selling televisions, iphones -- they will increase the amount of for space devoted to apple products. matt: 13%. -- 14%.

pimm: they will also reach reduce the apple watch. it will be in all of the best buy stores at the end of the much. netflix shares are also rising. let's go right to our top stories at this hour. the chinese central bank is trying to stop the stock market row since the fifth time since november. they're cutting interest rates and lowering the amount of cash that chinese banks must set aside. that is before the decision by the central bank, the shanghai composite index fell more than 7% today. since last thursday, the chinese .tock market is down 22% let's turn our attention to oil. the price of oil is gaming today. west texas intermediate has been up as much as 3%. right now.75 yesterday oil fell more than 5%. since june, crude prices, they are down by more than one third survey,g to a bloomberg

it might show that oil stockpiles rose once again. matt: moore signs of progress in the housing market in the u.s. 5%e prices in 20 cities rose in june. that is compared to the same month a year earlier. nationally, prices rose 4.5 percent, stronger demand that surged during spring. a limited number of available properties propped up the prices. all 20 cities in the individual city survey showed year-over-year gain led by a ,0.2% increase in denver probably because it is an awesome place to live. new home sales rebounded in july. sales rose five point 4% last month, that is the biggest game this year and it comes after new home sales fell almost 8% in june. demands for new homes are expected to keep growing because of stronger employment, low mortgage rates, and tight inventory. there's not a lot of supply.

arehomes, a lot of people into existing homes. americans a more optimistic about the economy. consumer confidence index came in higher than expected. those with a larger household income with a more confident, and those that had 35,000 were more confident. it was a massive 10 point gain after an unexplainable nine point loss the month before. pimm: the shares of best buy are higher. televisions, phones, selling more of these, as well as major appliances. analysts have missed estimates. best buy will dedicate more apple products in its stores. this is the executive. bywe are very excited gaining early momentum in the apple watch in our stores. we have made a strategic decision with apple that we

would expand the rollout. pimm: the apple watch product will be offered in all locations by the end of september. highestill bestow its honor on a fourth american who was credited with foiling an attack on a high-speed train. mark was a teacher and artist who has lived in france for more than 20 years. he will receive the legion of honor medal when he is released from the hospital. those are your top stories at noon. matt: coming up in the next half hour, argentina does a tricky tango when it comes to energy prices. we will tell you why oil is still $77 per barrel in south america's second-largest economy. strategiesf the best for retail investors who are concerned about their retirement accounts, particularly with the market volatility -- we will ask.

we will ask the chief investment officer of charles schwab. drop ine 7% market china, they are taking action to stimulate their economy. matt: they will cut the one-year benchmark interest rate by 25 basis points. it is the fifth rate hike since november. -- it is the fifth rate cut since november. jason, what do you think about -- coupled with another $23 billion injection last night. will this be enough to shore up the chinese markets and satisfy international investors that were all clamoring for chinese policymakers to act yesterday? rmb devaluation was chinese policymakers away from overvaluing the fixed exchange rate toward easing fixed financial domestic conditions. china today,em in

in my view, is excessively high real interest rates. real interest rates, after accounting for the impact of deflation and producer prices are 5% upon a one-year basis. affective real interest rates on a long-term basis for the 11%,trial sector is over compared to global interest rate in advanced economies are zero or negative in many instances. this is a positive step in the right direction. it will be a slow and gradual process toward easing domestic financial conditions and ultimately putting a four under industrial input prices in china. pimm: can you tell us why we have not heard directly from chinese officials about the stock market drop? if the u.s. stock market dropped more than 22% in a month, i think there would be a lot of talking heads from the government to speak about this issue. how come we do not hear anything directly from the chinese leaders? jason: i cannot comment on leadershipade by the

in china, chinese authorities, in terms of what they wish to communicate about the market. for a time, there was concern that the market decline would present a systemic risk because of the large increase in margin credit. i think that policymakers have recognized that resources would be better spent easing the messick financial conditions and supporting the real economy with less attention paid to the stock market. it is important to recognize that the stock market in china has certainly exhibited signs of casino behavior over the past year. again, i think i focus on the real economy, domestic financial conditions, rather than the stock market, is certainly warranted. matt: basically, you're saying the chinese are shifting over to a more free market, i guess, market policies, monetary policies, etc.. that this implementation will be very difficult for the chinese consumers to deal with, so we are looking at a multi-your slowdown as a result of this

integration, right? , for: what i anticipate domestic financial conditions to become easier. that means that borrowing rates will go down in real terms. you have a large entrepreneurial sector in china, private businesses, smaller businesses, that will benefit from lower real interest rates as a consequence of this move. you have people are aware of very large debt loads in china. it will make the cost of servicing that debt easier. tried it is in the midst of a multi-your slowdown. that is concentrated in production. that slowdown has been 30% increase in the real effective exchange rate over the past five years. a 50% increase over the last 12 months. while the slowdown will continue, i think the rate at which it occurs will be moderated by a more accommodative monetary policy in

china. pimm: could you speak on a crackdown on corruption the government has been pursuing and how that is affecting the economy? jason: that is issuing the purchase of luxury goods. if you look at high-end automobiles, you will see a noticeable deceleration in sales in china. that has been the biggest impact. i think it is very important for --itimacy, for rule of law and i think that it is a positive step. clearly, there has been a market deceleration in the sales of a number of items, and that has affected, primarily, european manufacturers of luxury goods. matt: yesterday i was talking to and harmon from isi and he said the chinese government should implement a cash for clunkers like policy. do think that is a good idea, and you think that is something we might see t boost

consumer spending? data in consumption looks strong. the issue is not that household growth is declining, there is rapid growth in employment that are higher value added services were incomes tend to be higher. real consumption growth of 9% or 10% looks to be sustained. the issue is the deceleration and heavy industry, fixed investment, construction. that is leading to declines in demand for industrial inputs. you have concerns, globally, that as demands for these goods in china slow, energy markets are oversupplied, commodity markets are perhaps oversupplied, and that is led to rapid -- that has led to rapid drops in prices and a large x.uction in cap o clement that is used in energy

production, mining, sales of this equipment has plummeted this year. i think that that is really where you see the most meaningful impact. the consumer in china, in our view, continues to do quite well. right, jason, thank you very much. jason thomas, the director of research at the carlyle group. pimm: still ahead on the market day, we are looking at the s&p 500 continuing its rally. more, next. ♪

pimm: welcome back to the bloomberg "market day."

i am pimm fox. some markets are recouping of yesterday's losses with some of the worst performers coming back to check. here is julie hyman. bige: indeed we are seeing gains, the biggest we have seen all year for the major averages, but not making up for yesterday, and certainly not making up for the past several days as we had the correction in the major averages. in terms of the individual movers, you mentioned best buy. i want to reiterate what we surely, that the turnaround is happening as not just a result of cost cutting, but revenue growth picking up. that is something investors have been looking for. he also talked about apple demand saying that the apple watch will be sold in all stores by the end of september. that apple watch demand has been strong.

that is also helping to contribute to the gains that we are seeing in apple. in a lot of analysts' commentary, that we have seen an overcorrection in the apple shares. wells fargo is upgrading those shares to an outperform. look at the correction, it was more than a correction, we saw a drop of 22%, which is commonly a bear market when you see a drop of 22%. the record close was in february. we were close to it in mid july, july 20 to be exact. the velocity of the drop was rapid. i do want to mention latebreaking news that we just got a little while ago. the d.c. utilities regulator is saying that it will not support fordeal exelon buying pepco $6.8 billion. pepco shares are down 16% as a result. this would have made exelon the largest utility in the country

in terms of the number of customers. this throws into question whether the deal will still get done. things may much, julie hyman. with all of the volatility taking place in markets, what happens next? will the events of this month have any influence over the federal reserve's decision to raise interest rates? us on the phone from east hampton new york is the president and founder of seabreeze partners management. we were just talking, you say the markets are broken. you wrote a piece on that. what does that mean? i would say that the genesis of the breakdown in the market mechanism has started the regulatory changes in banking and investment industries. in a nutshell you had also three and dodd-frank. that has basically served him to reduce dealers incentive and abilities to provide liquidity.

as a result, risk-free assets have grown larger on bank balance sheets while riskier shrug.have this is when retailers have exited the market, meaning that high-frequency trading and delivered etf's have taken a more dominant role in daily trading activity and capping for as much as 70% of volume which is double the historic role. remember that price momentum taste chatterjee's are agnostic to balance sheets and income statements. momentumer that price rates are agnostic to balance sheets and income statements. it is reminiscent of portfolio insurance in the 1980's which many think caused the 1987 market massacre. these price momentum strategies exacerbate short-term moves. the high-frequency trading boys are growing on the is this networks about how much money they made in the market they are

built for, which is the market that they made. the regulators are asleep, or worse, which is terrifying to me. matt: it all started with -- in cannot put the genie back the bottle as my good friend says to me a lot. shouldn't a retail investors just stay away from daytrading and focus on stocks or bonds that they like and it makes sense to hold for five-20 years? have the problem that we with that, it seems like most individual investors are more daytraders and less warren buffett holding with the timeframe forever. pimm: after break-in. with that include people that use their 401(k)s to plan for their retirement? it does not seem as though those are trading vehicles. doug: i will be honest. the people i know, which i think his representative, use their

401(k)s as trading vehicles and not as investment vehicles. inm: you can never program human intelligence. itg: i'm not saying that makes sense, i'm just telling you the reality of the situation. rallyyou were shoring the this morning. it made sense, and must of paid off for you. it was strong, we did not open that strong. how did you know to do that after the 2 days of 500 point drops, and what are you doing with your money? sure.you never know for yesterday looked like a classic a near-term capitulation low. were four orwe five standard deviations below the 50 day moving average, which is usually a good sign. selling climax which theown days, in total down volume exceeded 90% of total volume.

in the past, you get a brief rally which last a day or two, which i think we are getting a brief but sharp rally which was .xpected, but you have a retest i maintain a very cautious ,egative view to summarize global fundamentals are very wobbly. i think a major broad market top was made in this year's first half. i believe the s&p could deliver somewhere between a high single digit double-digit returns for the full year. i think bear market value is probably around 1990 or a couple points above that. we always move in excess or below equilibrium levels. pimm: we have to leave it there. thank you very much. doug kass joining us from seabreeze partners. we have more coming up on "market day." ♪

matt: this is the bloomberg market day, i am matt miller here with pimm fox. we will look at the news stories crossing our terminal at this hour, starting with universal pictures international. they continued their banner year by smashing international box office records. they have grossed $3.8 billion for the highest grossing year ever. universal has a four of the top five international blockbusters including fast and furious 7, jurassic world, and 50 shades of grey. don't say it. warner bros. wants a chunk of the world's fastest-growing movie market. they are negotiating with a state backed investment house in china to begin producing films locally. china is expected to become the biggest market for filmed entertainment, even as its economy decelerates. last year rocks office receipts and the totals in

the united states and canada $10.4 billion. matt: that is changing this year. the chinese box office topped the u.s. box office receipts. it is becoming a bigger market than the u.s.. pimm: six of the 10 top grossing films in china this year were made in china and our domestic releases. matt: it makes sense, they want to see movies and their local language, shot and local locations. pimm: i believe this in your capable hands. matt: i will talk about emerging markets and liz and saunders -- liz anne sounders. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. matt: welcome back to the bloomberg "market day." i am matt miller. a want to give you a quick look at the stories making headlines

on the bloomberg terminal. jeb bush might be making himself look worse instead of better after using the term anchor -- anchor baby. yesterday bush tried to justify the term many latinos think that it is offensive. he said that it is more related to asian people that come to the u.s. and have children. that has marked a new demand of apologies from asian leaders. he is digging a hole. i know what that feels like. rather than wait until voters select a candidate, so far the president has her main neutral. there's speculation that might change if vice president joe biden decides to enter the race. the national security advisory susan rice is going to china. she will go lay the groundwork for president xi jinping's visit to washington next month. she will be in china on friday and saturday, visiting as the country is grappling with a

falling stock market despite government efforts to stop the slide. she will meet with president obama at the white house in late september. china cut interest rates for the fifth time in nine months. the central bank says the benchmark rate for a one-year loan will be cut by a quarter of a percentage point to four point 6%. the rate of deposits will fall by a similar margin to 1.3%. we spoke with a chief global strategist at jp morgan funds. >> i think this is better than trying to control the stock market, but i do not think that it will fundamentally change the economic growth story in china, but it will bring stability to stock markets locally, but i think that is a positive all around. matt: the bank has increased the amount of money available for lending by reducing the minimum reserves banks are required to hold. before that the shanghai .omposite index fell the chinese stock market is down 22%.

the ceo of alibaba is urging workers to stay focused and more plunging stock market shares. shares fell below their ipo price yesterday. they have lost 128 billion dollars in market value since its november peak. that is a look at the top stories at this hour. i now want to focus on oil. industry veteran tom petri explained to bloomberg why he thinks oil is headed lower, possibly as low as $20 a barrel before it goes higher. tom: it would not surprise me to see it work lower. it turns a lot of what societies do. they're coming under a pressure from the other members of opec. they believe that at the point that they can begin to see a rollover in u.s. production, and they have seen none so far. when they do see it, i think that is when they will begin to change. it does not appear to be imminent. i think late this year or early next year is more likely.

a point that i have been making is the fastest route to getting back to a longer-term sustainable range of oil prices, which is something like $55 to $70 in the next couple of years, then after that, more likely $60 to 80 five dollars, the fastest route to do that is for oil prices to come lower sooner. there are producers in the states. the most effective producer in the bok and has said that they are beginning to see signs that their productivity will rollover. they think others are in the same boat. when that starts to happen, and if you get three months or four inths consecutively of a dip u.s. productivity, i think societies may well be at a point when they start to rethink the strategy. without a big fanfare, they will begin to back off from the price that they are putting out. a petriat was tom petri partners on his oil outlook. stocks in argentina are trading at their cheapest levels and 50

months after the benchmark index tumbled. while stocks are cheap in argentina, oil is not. it is hovering around $77 a barrel, while u.s. crude is under $39. that is because the argentine government is trying to turbocharge domestic reduction or joining us to talk about argentina and other emerging markets is the founder and ceo of great not capital management. i will use the cliche, you cut your teeth on the argentinian debt crisis back in the 90's. you know a lot about what is going on. you continue to invest in the argentinian market. a lot of times, the stuff that they do is crazy, isn't it? >> the oil price that they have now to stimulate domestic reduction is one of many distortions in the economy that is laying the template for, regardless of who comes out in the election, is the winner for probably really good economic

performance going forward. you cannot come up with a worse structured economy. thatis point, i think people have reason to be optimistic in argentina. you have an educated population, a reasonably decent infrastructure, you have really competitive international industries, and an economy on the sovereign level and corporate level that is completely unlettered. all you need -- unlevered. all you need is political change. it was pretty clear that there went on.for a that there were massive demonstrations that came into the street. -- thedidate se candidate found himself in a corner because if he is associated too much with the mismanagement of the past decade he might lose the election. these candidates are going to be a welcome change.

matt: we heard the same thing from jack rivkin. he manages money now and has spent a lot of time in argentina. he said the number one place to invest, as long as there's decent change in the election. is it always on that? took a think people little bit of a pause with a little bit of rhetoric. he is trying to maintain a enough support to get that part of the vote. argentina looks like the best investment on just about any level. there areke arguments better debt levels in emerging markets, but the probability of the sea to change in argentina postelection is almost a done deal. i think you can pick up assets very cheap. you are not betting that

argentina becomes not greece, but more like germany. venezuela all of a sudden took over the lead at -- as the most mismanaged economy. you can argue that argentina has the most advantages and the most mismanaged. about, some ask you many people have been comparing what we are seeing now with the chinese devaluation that led to vietnam and kazakhstan, with 97 and 98. i know there are differences, but how do you see this emerging market crisis as compared to the devaluation that we saw in the late 1990's? hans: the 1998 crisis, we had the asia crisis and there was a bit of a setback, the 1998 crisis came out of russia, and it was an investment in long-term capital over leverage that was on russian instruments,

and the effect that went through the markets. i think that we have seen the repercussions on the equity side . on the fundamental side, it is probably, potentially, you have to pay more attention to china, just because it is such a driver for any academ -- for any economy exporting country. i spoke to a friend of mine before i came here, and he was saying from his point of view, and i would encourage people to look at his research, china is faced with the bad and worse options. there needs to be a rebalancing. they will have ramifications. in terms of market opportunities, this was an a lot of noise and our markets. we barely sought any effect at all. things got marked down, but the equity markets -- we have just gotten into the realm of a motion at this point. in terms of the economic developments coming forward, there is a lot of potential, the rebalancing that might come out of china is a positive. matt: what needs to happen?

the currency needs to be devalued further? hans: they have a massive domestic debt issue. they might be looking at either not an overt, but a covert debt restructuring of some form. or the potential in the last decade, like japan had. they need to restructure. everything that made china successful over the last decade is causing the problems they have now. at some level, they need to stimulate domestic demand, put more purchasing power to the man on the street -- it is a balancing act were central control is may be part of the solution and may be part of the problem. one thing we are paying attention to is the anti-corruption, it may have caused a lot of this, because a lot of anti-economic activity gets slow down because everyone is looking over their shoulder. matt: we heard a moment ago from jason thomas that luxury goods becauseselling as well

of the crackdown on corruption. yesterday, i was talking to ed somen who was suggesting kind of effort from policymakers to spur domestic consumer demand. hans: exactly. they need to figure out a way to get cash into the hands of the overall population. you do not want to stimulate the demand of luxury goods, you want a more broad-based consumer demand for basic goods. it goes beyond just purchasing luxury goods. it is economic companies that have to be careful about making bold moves at this point in china. if they make a misstep, the rules of the game are changing. the corporate leaders have to look over their shoulders. matt: you said it does not affect much of the market is that you play in, or it has not affected much so far. what are you doing? have you made any moves over the last few days? the equity markets have been

amazing to watch, currency markets have been unreal, commodity markets -- how is this stress data and have you done anything? looking for dislocations. we usually stay in hard currency, but in these dislocations you see domestic localssues and the currency get sold off faster than the international bonds. we are looking for for sellers in that area. after our call yesterday morning on the back of the opening, my idea was, let's pick three things that we would like to buy and put a bid of it'll but above the bid and nothing. there is no volume on the debt side. the mice and not moved that much. we will see how this market sentiment -- the debt has not move that much. we'll see how this market sentiment plays out. china is changing, but that does not mean the world is over.

they will still consume and produce goods. commodities will always find a price. you could make a strong argument that commodities are oversold. everyone has a strong thing about oil. i do not know if it will be $20 or $60. we will have to see. matt: thank you for coming in. still ahead on "market day." we will check on the markets u.s. stocks that are staging a rally after yesterday's massive drop and friday's passive drop andthursday's big drop wednesday's big drop. hopefully you are not long starting on tuesday. we will look at which stocks are moving the most on the bloomberg "market day." ♪

matt: welcome back to the bloomberg "market day." i am matt miller. let's go to bloomberg's julie hyman for the big stories. what are the trading issues? julie: the big story would be the rebound that we are seeing. the major averages, of course. we're seeing the big one-day gain for the s&p and dow. for the nasdaq it is getting the most that we have seen in several years, and about three years, for the nasdaq with a 3.3% gain. we're not recouping all of yesterday's losses, but we are making progress in that direction. going into today, there was talk about the exhaustive nature of the selling that we have had over the past few days. a huge spike in volatility. the volume was the highest that we have seen in four years. all of that is setting up.

a lot of folks are setting up, the rebound that we are seeing. another measure is looking at the global market cap. this is the global market capitalization. you can see the huge decline over the past several days. yesterday, it was 2.7 trillion dollars by a top of the value of global markets. that was the worst single day in about four years time. that brings home the global nature of the selloff that we saw. it was certainly not just limited to hear in the united states. let's look about what is going on in the united states today and the sectors of the s&p 500. utilities have turned red, because earlier we had washington, d.c.'s utilities regulator saying they will block the acquisition of pepco, which provide service for customers in d.c. by excellent. that is pulling them down, in addition to what is going on with rates. care, theary health broad-based rally comments in the rest of the market.

we will talk about rates. this is the 10 year, it was dipping below 2% for the first time since april. a very seeing significant bind, today we are seeing a selling of treasuries with a higher yield, 2.1 1%. the drop in utilities tends to coincide with a higher yield. we are seeing a rebound for the dollar. yesterday it was trading at a seven-month low after china cut rates. the dollar is rebounding by one point 4%. the dollar is having its best day in two years. commodities, let's take a look there since we have been talking about what has been going on with commodities with the rebound overall, if you look at the bloomberg commodity index, they are rebounding from a 16 year low. oil and copper in particular are rebounding. they are bounding from very low levels and very long decline. matt: thank you.

julie hyman, our senior markets correspondent. a hedge fund manager that was out front predicting the emerging markets stock route is making another call about the fed. fed willthat the likely delay raising interest rates. joining me is mark crumpton to talk about this exciting story. mark coleman it is interesting. he was talking about this in the spring in april. you will look at that, and obviously, he hit it on the head. at some point, as we were to the yesterday person that covers markets, this has been in the markets for a while. it seemed like a perfect storm. first, it was oil. the price of oil was falling. all of a sudden, with what is going on with china with the devaluation of the yuan, and the central bank of china deciding to cut that key interest rates,

markets are taking a hit, and he saw something coming. paulson-like call. he is dividing these hedge funds are telling them how to make their bets. it is cool that he made this call two days from the market high. when emerging market had hit, especially in asia, their highs, he made this call. my favorite part of the story is that he does all of this from deal,fice in colorado. i would work ski patrol after making a deal like that. mark will stay with before our next guest, doug bower, the ceo of try point group, one of the biggest home-building companies in the u.s.. stay with us, you're watching bloomberg "market day." ♪

matt: the recent turmoil in the market does not seem to take the

foundation or the outlook of those in real estate. new home sales rose by 5.5%. us is the man with a crane's eye view, doug bauer, the ceo of tri pointe group. he joins us from los angeles. thank you for your time. after all of this market turmoil, one of the good pieces of news that seems to be coming out of the dust is housing. give us your review. what are the numbers telling us about the state of the u.s. housing market? for havings, guys, me on. the state of the u.s. housing market, we are in a sweet spot. we have stable pricing, good demand, low inventory interest at historicall lows. overall, the housing market has reported today that new home sales rose to 500-7000, which is

07000,- 500-7000 -- 5 which is a 20% increase. matt: is there anything that gives you pause? doug: obviously, the stock market and what has happened over the last 48 hours. i was watching the news yesterday morning when it dropped over 1000 points. it is concerning to people. if i remember right, i do not think the market has had a correction in 4.5 years. story is ag market big one. the chinese i think are about 15% of the worldwide consumers. it is a big story. is one part of the overall

economy. when you look at the u.s., and i who wasening to fisher speaking yesterday, the old federal reserve governor, and all of the indicators in the u.s. are heading in a very positive direction. do you think about affordability right now? we have seen, if you look at the case schiller numbers, in june of this year, they are up 5%, prices. in june of last year there was a 6% change, i am talking about prices again. in home prices at significant numbers. if you look at the pay increases, you only see 2%, two .2 percent wage increases. home prices are rising at a much faster rate than people are getting raises. does that concern you? doug: what happens there is really a function of interest

rates and pricing and affordability. if you look at the markets that we serve, we are in 8 states across 12 metropolitan markets. the actual cost of owning a home is decreasing as compared to the cost of renting in the markets that we serve. yeah, it is concerning that wages have been percolating along, but if you look at the balance sheets of the consumers in the nation today, they are at their strongest level than perhaps in the last decade. overall, i think the consumer is in a good spot. i think that when you see housing prices in greece -- housing prices increase in the low single digit that creates a nice market momentum. mark: after ask about the state of the jobs and labor market. is that giving your market, the housing market, the momentum it needs for sustained growth?

doug: someone asked me the other day what is my biggest concern. i have 2. one is looking for land and a great locations, the second one is the labor market and the housing industry. that is a constraint. it has caused constraint for us in denver. it is causing constraint in seattle. different submarkets react differently, but the labor markets are a concern overall. mark: thank you so much, we appreciate it. matt: coming up, liz ann sonders the chief investment officer at charles schwab says how she is advising her clients. stay with us.

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matt: good luck in san francisco, 1:00 in hong kong. mark: this is the bloomberg market day.

stocks at the comeback trail at the comeback trail in a big way majorday after the selloff that three major indexes are all posting games north of 2%. matt: yesterday's extreme volatility meant huge profits for some firms. with a high-frequency trading firm that had one of its best days ever. goingcommodities are not left behind in today's rebound. oil and metals are leaving the game, commodities are advancing from a 16 year low. ♪ matt: good green afternoon, i am matt miller as stocks rally. mark: i am mark crumpton. let's look at the markets on this tuesday. what a difference a day makes. a day after concerns about slowdowns in china's economy led to a global market sello