. 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 2011. joe: extraordinary.

the first half of the day felt like yesterday, then the market were selling off and we had a sick feeling, but extraordinary buying in the afternoon and it took off. huge moves. great economic data this morning. pretty positive day. alix: the dow finished with the third best gain on record and it was very broad-based, all sectors higher, tech was leading the way. joe: as with yesterday, cyclicals leading the way and he cannot forget that the fed basically seems to take september off the table for rate hikes, not 100%, but traders were probably excited to hear that. alix: more money, more time to buy stocks. we were just talking about that. a deep dive into my bloomberg terminal, looking at china. chinaou are looking at is

and other energy consumption. the reason to care, we want to measure growth. it will either increase -- it has increased since february, 40%, it is seasonal. andeconomy is growing factories are running and people are moving, they are using energy. this would imply that china is not in a hard situation. joe: for a long time a consumption was a dominant metric that people used to gauge the economy there. people have questions about their transparency, it was noted that we saw solid gains in electricity consumption there, so maybe it is not falling like people say. alix: there are more worries about valuation, but nothing about fundamental chinese growth. joe: i want to look at my terminal, speaking of china,

bute are china questions, these two lines, the white line is that the volatility over the next year over the hong kong dollar. the yellow line is saudi arabia. in optionsbig surge implied and expected volatility. people are thinking that economic pressures, the slowdowns, that is going to force these countries with ing-standing tags to loosen some way. it is a chicken match. a lot of people think there is no pressure on them to budge. but traders think there is a possibility. alix: it was done just last week. in cosan stand. i think that these are a little more stable than calls next on -- the country cause extent, but absolutely. inx: we are going to bring

some folks. they join us, thank you very much. toby, thank you for staying with us. george, how do you think about the rally today? >> i think that predicting short-term price movements in this kind of market is hard to do. it is nice to see a solid rally at the end of the day. the last two days, not only with the opening drops, but also the inability of cash equities to find buyers late in the day, demand kept going on, so it is nice to see buyers come in at the end of the day. our view on this is that it will be really hard to call a bottom. you cannot look at a chart and davis is the logical place where things bottom out, it is a wildcard market. joe: bigger picture, you have done a lot of work looking at market valuations. where does this take us, what

we've seen recently, and what can we look at going forward? >> the market, you have to think there is value there, but has come into context of deteriorating fundamentals and valuations of a variety of --, you mentioned the high-yield earlier. equities are playing catch-up now. it has been a function of the oil route. it has been a fraction of deteriorating growth in emerging markets. the u.s. economy just being fine , you consent to think about the hike coming through. that makes it confusing for the u.s. stock market. they are expected to be on fire, but it is not definitely see some stability. alix: does that mean your pain more for earnings -- paying more for earnings? >> on the global level, earnings

are lower than three years ago and your pain 40% -- paying 40% more for them. in the u.s., earnings have been gradually improving, but you pay a lot more for those earnings to come through. so there has been valuation that come through now and the market is where it should be, in the context of other asset markets like high-yield, emerging-market debt, and equities. there is opportunity out there, but even though there has been a sharp drawdown, we haven't said, let's quickly go by the market, we're looking for things we already like and the better opportunities to buy them. joe: george, you look at similar stuff in terms of stocks and high-yield, how do you make of the gap and the closing of the gap in recent days? >> is important to sort out what

is going on in these markets and has been similar in both the energy, looking weaker than everything else, we did a study last week at the increasing spread for the credit swaps on debt. up until last wednesday, it was due to commodities. inwe can find a true bottom crude oil and at least move sideways, that will have an impact on credit markets. i think that there is a lot of moving pieces, but toby is right in saying that the market is not screaming by -- buy. there are a lot of things that look attractive. i think investors have made out well this week on some of them. alix: they'll, you like japan, tell us why. >> japan has been a great story.

in most developing markets you pay more and more, but in japan you have seen earnings almost double over the past few years with valuation hardly moving. you have seen great rallies, but you are not paying more for the same earnings. the quality of earnings has improved and there has been held coming to the market, and that makes the market right for a big move up. so, one thing we have been doing in recent days with this is adding more to japan. joe: what do you make of u.s. equities at this point, in terms of global, is the u.s. compelling at this time? market..s. is a quality they have a decent level of earnings. but we find it on compelling -- uncompelling.

there's a lot of tightness and a stronger dollar. so those earnings will be less dollars. so it might be challenging going forward, there is a great eddie from the new york -- study from new york about which pressure -- wage pressure. those things make us nervous. so it has been unexciting, but it does not mean that the u.s. economy is falling over. the premiums that you pay there, versus everywhere else in the world, we are not sure it is. about thedudley spoke market earlier. >> from my perspective, at this moment, the decision to begin the normalization process at the september meeting seems less compelling to me than it was a few weeks ago. normalization could become more compelling by the time of the meeting. joe: george, you have been on sweater -- twitter, saying they

should just do it. cab driver said that as well today. i tweeted from inspiration from bradford, who said go for it. there is so much about this economy that signals boom conditions. if you look at services, revenue, net percentage of companies in the richmond fed cash district that are reporting above average revenues, it is the net percentage of 30 firms at an all-time high. i am looking at this yesterday and saying, there's a much about this economy that is healthy and being ignored. the fed should just do it. alix: just do it, use nike. toby alix:anks to

and george. when we come back, which country has provided refuge for stock investors? that answer after the break. ♪

askedbefore the break we which country provides refuge for emerging market stock investors? joe: the answer is:. check out this chart, showing returns over emerging markets, poland is leading the way. it is up there. i'm emerging markets, there has been talk about eastern european markets as being separate from the emerging-market route, but enoughlso does not have

characteristics as others. even within this -- there are some pockets. have: really does not exposure to china and that in itself insulates it. thater, i should point out there is a high risk that poland may actually reduce costs, but that is a knockoff on the ecb. we want to get straight to top headlines. a good man suspected of killing a reporter and cameraman during a live broadcast has died. virginia police say the man was a disgruntled former employee of the station in virginia. he died of a self-inflicted pursuit.ound after a he later died at a hospital. the general manager of the station identified the victims as allison parker and allen award -- ward.

an official was also hit by gunfire, but isn't able condition. joe: in colorado, a sentence for life in prison for james holmes. he fatally shot 12 people and injured others in a movie theater in 2012. jurors rejected his insanity we, the but cannot -- but could not agree on a death penalty verdict. --, thed the company retailer says demand for the firearms is declining. walmart will replace it with other hunting merchandise. those are your headlines. joe: back with us is george perch. got a lot of attention today, because you looked at the extent of the abruptness of this fall and noted that we have not seen anything like it in 75

years. explain to us how you measured it. >> the markets have not been this oversold relative to their trend on a three-day closing basis since the outbreak of world war ii. i think we will show a chart. this chart shows the song of the last three days reading for -- a reading we like to use that shows standard deviations below the 50 day moving average. the simple explanation, this is a summary of how oversold the market is. we have not been as oversold since there were german tanks in france. can we assign a standard aviation? -- deviation? of -- 60% of all reading on something to take place within a one standard deviation of the mean reading.

on a normal distribution. joe: so basically when you see these charts, falling straight like a cliff. it is one thing to see it creepy and lower, but this shows how extraordinary it is to go straight vertically down and slice through moving averages and put them in the rear premier -- rearview mirror. >> we were in such a tight range of until we sold off vertically, so that creates a more extreme reading. we are about at the close today, we soldthird as much as off in 1940. alix: this is actually the chart measuring the s&p 500, the same that we saw in 1940, and what we see now. these are marrying each other. >> this is an overlay of the two different.

periods. we got an extreme oversold reading. you can see the darker purple line, that is the current s&p 500. there is an overlay. our reading on this was not that it was 19 when future returns would come but we thought it was instructive. the looks like it did at africa be want war. that is significant. it has been damaging. read, note necessarily that those prices in the future will follow this chart, this is just more to show the -- the intensity of the shallot -- of this selloff. alix: awesome. week'sming up, this volatility in market may not be the only thing to worry about. we will show you an indicator

showing signs of stress in the u.s. economy. up next. ♪

oe: "what'd you miss?" alix: there may be a reason to worry about the u.s. economy. .oe: things are slowing the gauge that the chemical industry has slowed, there are these tiny indicators that we never talk about, like architecture building index. and the chemical industry has its own chemical activity and it has been rolling over and it is a sign that maybe industrial

activity is is -- is not as good as we hope. alix: and this has been jogging for the last 30 years. it is something to watch. obviously, an historic day in the market. is mike regan and julie hyman. julie, i want to start with tech, because that was a huge mover. seeing its best day ever for the s&p 500 tech index in the last years. .ulie: more than 5% it makes sense that they would lead us today, tech would have been leading today if you look at individual tech leaders like apple or netflix. you have major averages, tech is a heavyweight. the dow, the point gain that you pointed out, that is the third-largest ever on a point basis. the thing i keep me back to is

the trajectory of stocks throughout the day. this showshart and tick by tic. yesterday, we had a rally and this blew up in the last half-hour of trading, and an opposite effect as we watch today with gains coming in the last hour. so a very different day than we had yesterday. as we have been talking about, this is something that might was talking about, -- mike regan was talking about, this is difficult to predict what is going to happen next. joe: what are those things you are taking away from the last couple days? we could talk about mohair. alix: there is a price index for that? joe: -- >> what i keep thinking about is i cannot wait to read the hedge

fund letters for august. whinesly one of the big you have heard is that trading volume hasn't dwindled over the years. as prices go up, you might be trading the same dollar amount of stocks, but the amount is going down. that is not good for companies that make money off of the volume. now, if you look at a chart of volume. alix: i have it on my terminal. >> this is a great chart. look at the spike on the right, over 14 billion shares traded yesterday. 10 billion traded today. that is blockbuster trading numbers that will be good for a lot of companies. your schwab's of the world. but again, whatever -- whenever there are these market dislocations, there is chatter about hedge funds, i have not

heard a lot of that this time. but it wouldn't surprise me if you hear that. one thing, you are interested to see who is capitalizing on this, to the winners are at the end of august. alix: absolute. -- absolutely. julie, what is the number one thing you will look at tomorrow? upie: i think i will wake and see was way the wind is blowing. picking up on what you said about hedge funds, something that was brought up this morning, it is interesting to look at bonds and how they are performing. and the double line capital. .075.up about i actually pulled up the chart. -- janis is and

fund that looks like it has not done well recently. some stocks have held up better in his environment. alix: thank you so much for talking about the last four days in the market. joe: we will be right back. ♪

alix: "what'd you miss?" tiffany earnings out tomorrow before the bell. take a look at my bloomberg terminal for the one thing you need to know. how sales are doing in asia. joe: another thing tomorrow, we will get the jobless and i really like this because it is high-frequency. we get it every week, has been low, but is sensitive. if the economy is about to

deteriorate, we will see their first -- there first. alix: have a wonderful evening. it has been a crazy day. it has been a crazy day. joe: ♪ ♪ ♪ 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.

emily: technology companies once again leaving today's rally, but some venture capitalists say don't get too excited. i'm emily chang in this is "bloomberg west." coming up, when twitter may name a new ceo. an acquisition may be inevitable. plus, youtube takes on twitch with a new gaming service. and what is it like to work -- i will be joined i a confidant in the upcoming js