. matt: 10 markets hold onto a turnaround? alix: sticking to a china selloff -- the great year for who he is and how he is doing it. here for who he is and how he is doing it. i am matt afternoon, miller here with alix steel. alix: let's look at the markets. for now, we see a 400-point rally on the dow and the s&p up by about 47. i say for now because we know what happened yesterday at 1:30 p.m., the steep decline into the close, and a brutal end to a tuesday. stocks are holding a. overall volume for the dow is up 44% versus the 10-day average, peanuts are we saw on friday and monday. matt: yeah, the trajectory looks a lot different today. with an hour left in trading, it

appears we are climbing into the close. take a look at some of the other assets we are looking at. you and i have been talking about oil. commodities in general have seen a selloff. i say that because gold as well as falling. 3878 arude right now, barrel. that is a drop of $1.35, by the way, as inventories saw a draw. that is a real drop. alix: i should point out energy stocks are holding up. oil prices diverging from the stock market, they tend to move in tandem sometimes. watch the level. a lot of trinity -- traders are telling me $38.50 is the level to watch. matt: a rising tide lifts all boats. a lot of stocks are holding up. look at treasuries -- a selloff as people move away from the perceived safety of government debt. rising 66ar note

basis point. rising the basis point on the year and the 10-bond. alix: it was really about a said president coming out -- dudley -- and saying we may not see a rate increase in september. that is less compelling. you see a move out of treasuries. we now have a 24% chance that traders are expecting of a hike in september. that is down significantly from a week ago. matt: lockhart said the same thing yesterday when he spoke. more fed governors are coming out and saying hang on a second, it might not happen in september. some adjusting people talking with us today -- michael feroli with jpmorgan says october might be the time for the move. no one talks about the possibility for october is the professors are at the september and december meetings, but the fed could call a presser anytime they want. at the end of july

it was 46% and that is deteriorating. i want to look in the bloomberg terminal for what i was watching -- the volatility in the shanghai composite's. sharesasures how many a are trading. -shares of thea domestic market. x: it is the steepest drop. until that comes down, you will not see volatility in the other asset classes. if you want to see him as a massive spike in volatility, look at the vic's index. alix: max it out. it is high, the press max. max. -- but press matt: i'm looking at one year. if you look at the financial crisis on, and i will take it from 2011 on, it it does not look that different.

it has been a huge spike. alix: it has. absolutely. now you look at stories making headlines this hour -- a gunman described as a disgruntled station employee suspected in the killing of a television reporter and cameraman has died. earlier, virginia state police say as they were pursuing the suspect on interstate 66 he ran off of the road and crashed. he was found suffering from a gunshot wound. hospitalt nova fairfax from a self-inflicted gunshot. the general manager of television station wbdj said alison parker and adam ward were shot and killed on live television earlier today in virginia. was interviewing vicki gardner. she was also wounded, but is in stable condition after undergoing surgery. matt: reaction from the white

house after the shooting deaths -- press secretary josh earnest says he is not spoke with president obama about the shootings, but addressed reporters. ernest: there are some things that only congress can do that we know what have a reducing gunct in violence in this country and its congress could take those steps in it -- if congress could take that would in a way not infringe on the constitutional rights of law-abiding americans. matt: the white house also sense thoughts and prayers to the family -- families and the examples are "another of gun violence it is becoming to comment in communities across the u.s.." alix: walmart says it will stop selling weapons like the ar rifle this fall, but it is because demand is declining.

walmart plans to replace the gods with other types of rifles as well as shotguns and other hunting merchandise. colorado, james holmes has formally been sentenced to life in prison for mass murder at a movie theater. he was convicted of murdering 12 people and trying to kill 70 others in 2012. jurors rejected his insanity plea, but they could not agree on giving him the death penalty. alix: in france, the suspect in the foiled attack on a train has been charged with terrorism. the man is a moroccan who authorities say had links to radical islam. his lawyer says the man only wanted to rob passengers. the attack was broken up by three americans and other passengers. one of the americans, 23-year-old anthony sadler, returned home, walking off a commercial plane at sacramento international airport, a company by his parents. the city of sacramento is planning a parade for all three men who grew up in the area. those are your top stories. matt: u.s. stocks are heading

higher as investors trying to find the floor to the steepest losing streak in four years. globalcott wren is a strategies -- equities fargo.ist at wells your target -- how do we get there? scott: one way we get there -- people have more confidence that here in the u.s., growth is better. eurozone, better. japan is going to do all right, and there is stabilization in china. i think the growth fears about china are overdone. our international strategy team has a 6.8% gdp estimate for china this year, literally below where the government is at, but needless to say, they are looking for some stabilization. the work we are doing in equity strategy says we going to see some international stabilization. that is when to be a confidence builder. we have to form this bottom, and of course, here in the states,

we need to see earnings come through in a better second half. matt: scott, what you think about the possibility that the fed not only moves its interest rate hike forward from september, which we were expecting a week and a half, two weeks ago, but even pushes it out to 2016? you,: well, matt, i tell we thought the highest probability was in december, and you talk at the top of the hour about a lot of probability, at least based on the futures, that we will see a move in october, i still think it is not going to be september. that is a low-probability event. saying that, between the fomc minutes, the turmoil we see in the markets, and international uncertainties over growth, it would not surprise me at all if the fed put it off until 2016, but saying that, i still think there is a high probability that in december we see a very minor rate increase. though, youheless,

are looking at stocks that are, sort of, battling lower commodity prices. we have a chart comparing the s&p with a bloomberg commodities index as well as the inverted high-end yield credit spreads, and you have seen both the inverted, high-yield credit spreads come down. how do stocks resist that and stay higher? scott: well, i think when you look at commodities, we obviously have a supply problem. there is a demand issue as well. what i think we have not seen analysis is team's telling us is that the benefits of lower commodity prices -- we have barely begun to see those in the economy here in the states, and if you look historically, when you have big drops in oil prices, things like that, it is very, to have a big game in s&p earnings over the course of the next year. --gain -- gain in

-- earnings over the course of the next year. it will benefit a lot of segmenting the economy, industrials being one of them. you think that outweighs the problems of the slowing growth in china and the contagion in the asia-pacific area, not going to affect the u.s. as they do other countries that are dependent on china more as a customer? scott: as i mentioned, i think we will see china stabilize. growth will not drop as quickly as some fear. you have to remember, the chinese government is in a controlled slowdown. now, that is easier said than done when you have 1.3 billion people, but that is what has to happen for us to get to our target, for us to get to our earnings number. you need to see stabilization in china and not see growth collapse because obviously, if it does, that is going to be a problem.

matt: some people are saying the currency is overvalued by 20% or 30%, interest rates are still way too high, and expelling all of the corrupt politicians is still something that is going to take time. i mean, it does not seem at the country is in a good spot right now. scott: well, i think there is a lot of uncertainties there because you are a communist government trying to create somewhat of a capitalistic type of monetary system and economy. so, they are trying to transition to that type of an economy. more open markets. it is only going slowly. to generate domestic demand, which is really what they want to do, and not count on us to buy their stuff so much, i mean, that is a multi-decade transition. a lot of people are assuming this is going to happen quick. it is not going to happen quick. we are going to be talking about

this 20 years from now and the chinese financial system -- there is some fragile things about it. there are a lot of bad loans on the books. clearly, there is a lot of growth in that economy and i think we will see better quality growth as time goes on. scott, we're looking at the dow up by about 520 points, really looking at the rally picking up steam into the close. you mention the catalyst would be better confidence here in the u.s.. take a look inside my bloomberg terminal. you are looking at pretty good confidence. the consumer confidence index, quite frankly, is at its highest level, if you max this out, since 2007. what more do you have to see? scott: that is right. that was a great read on confidence. we see the university of michigan sentiment number this thursday. alix, i know you and matt solace earlier today, but the -- saw this earlier today, capital

goods -- it is a great gauge of futures goods capital spending, up way more than the market was looking for. that is a good sign. we have been looking for more business capital spending. it has lagged in this recovery you have consumer and business confidence higher. that is going to help. matt: i want to point out what is going on in the markets right now. we're looking at a gain on the dow jones industrial average of 509 points. i'm having a message war with julie, who says it is the biggest gain since november, 2011, but it is not -- as big as the losses we saw on monday and friday. scott: do not jinx us, matt. matt: i am not, but my point is the volatility is off the hook, right, scott? scott: it is unbelievable, and it is not going to stop any time soon. it will take a wild to form a bottom. you will not bounce straight

back up. yesterday was a great example of that. i think it will take a little bit of time to form this bottom. days like this -- get used to it in the near term. alix: you seem very constructive, might i call you, positive, scott. what would change or thesis -- what would make you more bearish? were wrong on chinese stabilization and wrong on the chinese growth rate -- if we saw something print down the near 6%, that is a problem. that is not what we expect. we need china to be stable. i would still argue that the global recovery is going to be anden right now by the u.s. buying them in the developed, international markets, like the eurozone and japan. so, we need a few components moving in the right direction a 6% growth rate in china is not going to help things and the market is not going to like that, if that would happen, which i don't think. matt: you see a difference between a 6% plant and truly 6%

growth in china -- the you think the print that we see is representative of the real rate? scott: matt, most of us suspect that maybe those rates are not exact. what you try to do is look at some of the other economies that are big trading partners of china's that have better data, more reliable data, to confirm what you see from china. you could argue all day long whether the government's 7% target, if it comes in there, is real or not, but we will have to go with what we have and definitely rely on the data from other countries that have reliable data and our big trading partners with china. matt: let me ask -- i get that -- when you go to bed, what is the last thing you look at when you go to sleep and what are the first indicators when you get up in the morning? bloomberg al up my

before ip gop to bed, check it, see were the futures are. the first thing i do when my alarm goes off, i pull out my bloomberg app and see where futures are. it is the last thing i do it for i go to bed and the first thing i do in the morning. .att: is a very nice app i cannot live without it. alix: shameless plug. matt: it is. i think a lot of other people are doing exactly the same thing in this market. absolutely, and i definitely check oil. that is my thing. thank you very much, scott wren, wells fargo, very positive. we see stocks up 3% on the day. details,an has the which are anderson, considering we had fed speak saying we're not going to raise rates in september -- which is interesting, considering we had fed speak saying we're not going to raise rates in september. matt: which is why. you want more juice?

julie: except that he made those comments before. i do nothing we can pin this on bill dudley. the timing does not match up. yes, matt, we have not recoup the losses we experienced in the last few days. you are correct. however, i want to point out the trajectory of today's move. within my bluebird terminal, the days.0 for the past two yesterday, we were plugging along just fine and then we saw the plunge in the last hour of trading. today is exactly the opposite, almost the inverse. stocks doing well, dipping mid day, and now coming back again, and now are at their highs of the session is the -- instead of at the beginning of the day. ending on a high note is seen by some technicians as potentially a good sign. the advanced decline ratio in stocks overall has been improving as the day has gone on. right now. 3.7

volume is relatively high right now, 83% above the 100-day moving average. we see conviction in the rally, but to scott wren's point, that does not mean we will not see continued volatility. in terms of what is driving us higher, it is a broad-this rally, but technology is playing a big role. netflix, google, amazon, all three of these stocks are above their 50-day moving average. we seen so many stocks fall below that momentum indicator. google, in particular, recommended by goldman sachs in .he conviction buys netflix, amazon, also participating in the rally. i also want to look at retailers. here we have some fundamental news from the likes of express, and she goes, and democrat -- co's and democrat he and fitch. best buy was given an upgrade.

nike was updated at susquehanna. under armour getting approval to split into two shares. that said, there are some laggards that i want to point out. we talked about schlumberger and it's acquisition of cameron. we are seeing that stock pullback. transocean, and freeport-mcmoran copper & gold also declining. alix: think you very much. the dow up now 540 points. matt: all right, now we are of more than we lost friday, but not as much as we lost on monday. coming up, we are going to talk donald trump. we are a sneak preview of his live interview tonight on bloomberg tv. something you do not want to miss on "with all due respect." ♪

alix: we want to turn to politics. donald trump making headlines

yesterday again when he temporarily banished reporter , telling him to go back to univision. matt: he is not the kind of guy that holds his tongue people we're looking forward to his interview tonight with john heilemann and mark halperin on "with all due respect" john: it is not just an interview, it is a celebration, live at trump tower. i could not believe that ramos, givenorge he has such a poor standing already with latino american voters per view but thinking want to strengthen that portion of the demographic. think he think about it that way to think he thought he was being rude and interrupting the press conference. matt: he was on point there. john: people were sympathetic to

not been, that he had called on -- that he was just turning his question. others said he had to be called on. i think you should be called on. i think both sides had a point. jd, i would say he did bring orge back and give him a chance to ask questions and they had a long colloquy, so it's not like he did not get a chance to make his point. alix: nevertheless, to matt's point, you have latinos, women -- he has gotten aggressive heat for megyn kelly. can you win the white house without that support behind you? oft: he has the support women. it is different with hispanics. to get tofirst track be president is to win the nomination in your party. done,, everything he has

which makes a lot of people and company, including me on some occasions, has worked. he trashed megyn kelly. he won that battle. his phone numbers keep going up. he is looking at in a short-term way. is this working for me now -- my poll numbers keep going up, why should i stop? some would say it might come back to her you, but yes to get over the first hurdle first. matt: what are you going to ask tonight? what he looking to get out of the interview? are looking for laughter, tears, news, revelations, personality -- you are trying to get inside of the mind. matt: does he really want to be president? does he generally want to be president? john: would you want to be president? alix: no. matt: no.

i would call you. i think i would do a terrible job. i am not qualified. is donald trump? thoughthave always nobody runs for this job unless they come on some level, wanted, and i do not know if when he started out he thought he had a good chance, but at this moment when he is the front runner in south: a, new hampshire, and many other states, i know it must now be in his head. i have seen other candidates, they started longshots, and then they become the front runner and start to think they could be the president of the united states. matt: the sarah palin effect. nope? john: she never ran for president. matt: vice president. polls,he sees the big the clouds, they get caught up. human nature, right? alix: we will tune in. mark halperin, john heilemann, speaking with donald trump on

"with all due respect." it will be awesome. matt: looking forward to it. alix: looking at the markets -- the dow up 534 points overall. average volume is 50% higher than it is on a 10-day average and it is the biggest rally, matt, for the s&p since september, 2011. matt: true, but we lost more than this on monday. alix: but we recoup the losses we saw on friday, and frankly, the rally is brought-based. you have text, health care. consumer discretionary really leading the way. matt: one week ago, we were 2000 points higher, so, it is interesting look at these markets. coming up, we're going to take a look -- alix: you are leaving. ♪

>> welcome back. we have a big rally underway. we will look at top headlines this afternoon. alix: investors in mexico's

largest construction company are showing desperation. -- chose the most in emerging markets. the steepest in mexico's benchmark. their decision to sell their stake after declaring it untouchable is showing a cash crunch. says it istsipras time for the people to decide on his record. that outgoing prime minister says he has no mandate to continue governing. facing aposed -- growing challenge. food ist times recalling more than 2 million pounds of turkey bacon products, that is because they may be unsafe and good spoil before the best used by date.

the safety and inspection service also says it has received reports of the book getting sick after eating the vacant, the products included were produced between may 31 and august 6. beer and sports. it is a simple philosophy, but one that has enabled buffalo wild wings to grow to more than one a lot -- 1100 restaurants. we spoke with the ceo, sally smith, who has been the boss for 19 years. >> wing prices are higher this year, so it has been difficult. as we have introduced guest experience captains, some increasing wage rates, and as it compns to become a workers and medical. alix: she also said that the chain could become bigger in the

next 5-7 years. rallyw back to the market underway. stocks are up 3%. joining me now is my co-anchor of what did you miss, joe weisenthal. days, thisast three is a rally, but we have not regained all losses. joe: obviously 500 points is a huge move and earlier in the middle of the day like yesterday, we had a surge in the morning and then the market started to creep over. then everyone has this sick feeling that we were going negative again, but at that point, the market started to show resiliency and, you never know. it looks like we could end up with a nice rally. alix: the question to me is, if you take a look at the terminal, the two year yield, it is rising .06% and you could say

that september might not be a good case, not necessarily because of stocks, because we genuinely see a tightening that won'timply we don't -- we see a monster rally here in -- australia. falling, youet is might have the impression among not go, then that leads to a rally. another factor that would be driving the two year yield potentially would be no october, people talking about the volatility puts september off the table, but if things quiet down and data stays solid, maybe in october rate hike. that would put pressure on sensitive short

rates. alix: we saw this rally in the s&p 500, the biggest since 2011, but if you look and get perspective, this is the s&p 500 versus moving averages, these are the long-term trends that many traders look at. man, does that look ugly. we are so far below all the averages, so much to go. joe: it is extraordinary how they just fell out of bed. you look at the chart and a lot of things like currency things, you lose two years worth of games. -- gains. we will have some charts coming up that show how extraordinary -- but wewas, but the do have a long way to go. alix: during the break we talked about what was puzzling about the rally and you pointed out the long-term yields, if we look at the 30 year treasury, we are approaching the 3% level here,

but what would you think it should be if we saw 500 points in a rally? joe: you figure everybody files into treasury, but just a little bit ago there was a tweet from bill gross, wondering as china was selling treasuries and that was putting pressure on. there are other theories. that has been one of the more heads catching aspects of this selloff -- head scratching aspects of this selloff. alix: good thoughts. thank you, joe weisenthal. thaninto our show in less 30 minutes. we will dive into all the charts you need. coming up, we are still watching markets. and the dow is up 550

point, a monster rally underway.

alix: welcome back, i am alix steele. now a look at the markets, there is a monster rally underway. we will put it in perspective. julie: take a look at major averages going toward the close of trading. highs.re rising to the doubt up 550 points, this could be on a point basis one of the best days on record. up in that if we end top spot. the nasdaq and s&p 500 trading since-- their highest

2011. we will take a look at this chart. the trajectory of the day here. we were rallying, then we did it dip,, but we have rally back. very different from yesterday. i want to show you again what we looked at a few moments ago. , these are s&p 500 up here, but we are still down here. we have regained losses, but still nowhere near the levels where we were before, 9% below still. all of that said, we are at her since october, and talking about perspective, we will look at a five-year chart. this is the five-year chart on s&p 500. selloff, a a big correction, but it comes on the heels of an enormous rally.

something else, another chart have been watching, one that comes from citigroup, this is looking at the dividend yield versus bond yields. we are looking at the s&p 500 giving 2.25% above the 10 year bond yield. other times when we see that, we have seen stocks rally. investors are drawn back in. yields, looking at the tenure, are we -- 10 year, are we seeing the same thing in bonds as in stocks, more or less. we are looking at yields go to the high of the session as people continue to sell treasuries. i would looking at it in the dollar? -- you can seeis it rising. we are not really seeing it in

the commodity. we are not seeing this with the oil prices, not like we have seen for the others. still, oil prices are lower on the day. not necessarily a move across all classes. i have to say that the move in a yields for the dollar is fascinating given comments today that we -- it is unlikely now that we will see the fed increase rates in september. it is confirming what a lot of market folks have been talking about. alix: absolutely. text.txtappening with stocks?- techs corey is with us. we are talking about fangs. the stocks that have led the way

, -- those fangs. a very few highflying stocks that have carried much of the growth in the s&p 500, to the stocks inother 495 the s&p 500, maybe you did not enjoy such gains. maybe you did not own for example, apple. apple is one of the best-performing stocks in the s&p 500 today and the other indexes. 5.2%, the- up other market only 2.2%. so that kind of rise in that one stock tells the story. the deeper and you look at other stocks, i mentioned 2.2%, netflix has been one of the beens that has really driving the market. when the market is up, netflix

is up a lot, when it is down, netflix is down a lot. now we see it up seven and a half -- 7.5% for the day and it is proving that it is the definition of momentum stocks. if you are a tech committee right now, you are leading the way, month and -- momentum leading the way. and as we saw from emc, the giant analogy coming out of -- technology company out of massachusetts, they say that they could be acquired, this is very big and important, they typically do not move 7.5% in a day, but it's happening right now. go downstream and look at a company like violin memory, maybe -- it has been completely blown up in the last year. it is getting a strong bid the

day before it comes out with earnings. this stock is moving dramatically today. -- up.memory of but when he market catches -- when the market catches a cold, these stocks have a fever. alix: the question is, how long can this really last? i will show you a chart. it looks at netflix versus 100 days, those moving averages. it is trapped between those levels. how long can something like this last, or does that moving average really drag it down? went so high, only went so low. they just keep doing that and they make money. the question is, when does the market change those stocks that fundamentals, or

this is a business that has yet to prove itself. can makeke a profit -- a profit, but the question is when sentiment is going to change. we see that from the economic activity in china, where we see important businesses in china that were about luxury and brand . the suggestion that there is a change in the sentiment in the way that the economy works in china, we wonder what that means for mercedes, bmw, coach, you name it. all of those companies talking about a change in the way the business works in china. you wonder if investor sentiment when this record level of day after day new volatility, you wonder if that changes for investors and at that point that is where you see different level stocks. there was a great no out thatier today- note today

valentina new. but there were days of volatility. that is to say, systems were so settle down, that this volatility felt like such a shock because we had not had volatility and that is the shock that can change minds about what we are willing to endure in the market. alix: absolutely great. thank you, cory johnson. bloomberg editor at large. julie is with me. stocks are picking up steam. i have not said that sense in a long time. sentence in a long time. be theand this could third-largest point gain. nonetheless, we are of 4% right now, the best single day since

november 2011. that is true for three major averages. we are talking about perspective, that comes after a big decline and you have major averages close to correction, if not having entered that. now they are going out of correction, potentially. this chart is so different from the chart yesterday, where we had the plunge at the end of trading and now have again. -- the gain. we have been watching this closely. 84% above the 100 day average in terms of volume for the s&p 500. on the a close eye advanced ratio. we could see this indicate that this is not as robust as it appears on the surface. ,he ratio of stocks overall this is declined 4.1, so that has been improving throughout the day. another metric we can look at is

the decline in s&p 500, only 12 stocks falling right now. pick a metric, they all looked decent. alix: if you look at the markets overall for the last year, the fromq is just 1% off positive territory on the year, ,o talking about corey's point it can have a dramatic impact on the industry, these stocks like apple and netflix. julie: the other thing to look at, if you look at highfliers or the leaders, have watched small caps today, because they sometimes lead them about we saw a gain, not as large as the overall market, but up 2.4% even as the s&p 500 is up a full percentage point above that. that is something to keep an eye on. leadingconductor index,

indicator, of 4.8% muscle it is outperforming. -- 4.2%, so it is outperforming. we have talked about a lot of charts, what we're looking at to figure out what will happen next, but when you have a surge in volatility as court talk about hims corey talk a you have these sharp reversals, it becomes difficult to predict in the short term. alix: think you, julie. also with me to break down , peter and -- are here. peter, why are we looking at probabilityonly 24% that we will see a rate hike in september? >> we have achieved a lot.

people are looking for value. there is a discussion about pension funds, they are trying to match the proportion of treasuries and equities, so because of this performance, they will have to buy equities and sell treasuries. i could be what we see today. alix: some more technical rather than fundamental? best,hink julie said it trying to predict these days is, you could make a big mess. if there are leaders on any given day, but it is more the home market is being bought and sold at once, there is not really a leadership that you can gain of as driving the or down. whenever there is a big day like today, there is obviously a ton of buyers in the market today and it can create problems at the closing auction where there are more buyers than sellers. most mutual funds trying to buy

or sell at the closing auction price to get the days mark. people try to get in front of that and anticipate, more buyers at the close. they can cause added exaggerated swings. don't take these so seriously. but what about tech stocks, you apple andhe dow, goldman. what happens when we have these -- this lack of breadth moving on not a lot of news? >> people still have to sell holdings. this volatility is insane. you start here, then by the time you look over, you turn your back and -- alix: ages. >> it isn't healthy for the market. we still have to play through this, people have to adjust, we need to return to normal

volatility. that is a reason i said yesterday, we were disappointed with the fed, we would still like to see them raise rates in september. they have conditioned everyone to sell volatility. every time it comes down of it, they market up. they're slowly damaging the market and that is what has happened these past couple of weeks, these wild swings for no reason. there is not enough data to justify these swings. alix: walk this out for me. you want the fed to raise in september? >> stocks will act positively. the reason that these are moving, they are asking when will the fed come in? the dollar could strengthen, but for the first time, the fed could cut rates. it would postpone talk about the next hike and it could be healthy, the market could stabilize and that is what we need to push to new highs, getting the fed out of the way.

this rate hike is speaking spooking people. >> i talked to people on the weekend, they ask, will the fed hike in september? what do you care. >> that is right, we would be much better getting this behind us. get rid of the bogeyman. the market moves on. i and probably willing to make the bet that the fed will be very cautious about raising rates. a good buying opportunity for people who sell off. and it gets out of the way and we can go back to talking about what matters, much more than the timing of one hike. does nevertheless, what this do for the fed and how do you handle this, oil. this is a simple chart.

it is dramatic. oil over the last year. this is a bear market. we are importing it here in the u.s., other countries like china also suffering, how does the fed and market hold -- handle this? >> everyone is talking that this will increase consumption, with the fed. we are largely a service economy, much more so than a manufacturing economy, so what will deflate is good that we import, but people will spend extra money locally. it could help inflation locally where we have people who have savings, they will go out and eat more, so i'm not worried. the fed has been adamant that oil is transitory and they will stick with that view and cannot be right. mike, looking at stocks. this compares oil to energy stocks and pretty much move in correlation, but oil is much lower.

does it have the power to drag down the market? >> the thing about this song -- ump, is that energy stocks are a tiny part of the market. single digit percentage that they make up. the smaller they get, the less impact they will have on the market. it is at the point where the energy industry is -- has about as much influence as apple does over the market. >> you see the high-end bond market stabilize, so we see the ,igh-yields doing well today but that is because the reacted first should this drop in energy. so with the energy bonds, they could stabilize and do better. alix: is this 600 point rally last until tomorrow? i need a crystal ball. you are -- peter?

>> i would be tempted to say, take some chips off the table. i think it will take a little more time for people to clean up their books. they will have to do this in the face of volatility. i think again, this is a market you want to trade in. hopefully by 300 cheaper tomorrow. i wouldn't shift money into the high-yield market -- i would shift money into the high-yield market. get a decent yield and your high off capital structure, so that is where i would structure money. >> there is a chance for lows in the high-yield market. alix: thank you so much, peter and mike. the dow is up 600 points. ♪

alix: we are moments away from the closing bell..

. am alix steele joe: and i am joe weisenthal. alix: that is some serious cheering, this is been the worst decline in almost four years, but the dow up today. "what'd you miss?" the big surge. is: we will ask them a what next. alix: the china factor, what it means for the market. joe: and we look at saudi arabia. alix: first we begin with the markets, it was an historic day on wall street, the dow jumping 637 point, closing off the level, but the s&p 500 has the biggest gain since november