scarlet: good afternoon. i'm scarlet fu here with alix steel. alix: we have to get straight to the markets. the dow is down over 400 points. scarlet, you are looking at stocks headed for their worst quarter since the fourth quarter in 2011. all s&p sectors are lower and likestocks -- something four s&p stocks are not in the red right now. scarlet: this is another way of illustrating what the moving has been like today. 218ad our low at about p.m., so about 40 minutes ago. we have come off of the worst levels of the session, but really a down day. today on an intraday basis, it

has flown more than 400 points. howive you an idea of things are over the last couple of months, this is a year today -- year to date chart of the doubt, s&p 500, and the nasdaq. it was all kind of copacetic until it kind of sellout. we went down, came back up, and are on our way down again. alix: a big part of this move was about oil. energy stocks got hit the hardest. if you talk to investors, it oil pricesthe lower not truly reflected in the stocks. they thought it was kind of a one quarter off situation. we did see that rally, and now we are seeing a feeling of "we are going to see lower oil prices for a while" and that is really helping drive down the market. we heard from adam parker and his number was 22 on the s&p

from 22.75. -- from 20 to 75. scarlet: there was an argument couple of months ago is containing the energy. -- is contained to energy. it is not necessarily affecting the other sectors. at spurts. ask the -- the experts. john is stored has from wells fargo management fund. always great to see you. the declining oil is now spreading to energy stocks. ? will it infect the overall market john: -- will it infect the overall market? john: it takes a while for it to get there. you get the bad news up front and the that result upfront front, but there is an offset to it down the road. alix: it seems like in the u.s.

we are not pending it will stop europe spends it -- we are not spending it. europe spends it more than we are. it seems the advantages are outweighing the -- the disadvantages are outweighing the benefits. ton: it is cheaper today philip, but might not be tomorrow. after a while, it works its way into the system. it goes both ways. scarlet: what has surprised you the most and your clients the most about the red arrows they see every minute? i really do think this is a situation where it is momentum. momentum builds on itself. one of the things that makes it more difficult is that stocks have done so well over the last four years and a lot of people have pretty good profits. it is kind of like a playing and

it starts defending without a real reason. i still may use my parachute if i have it. unfortunately, it does not go away right away. everyd through 1998 and gray hair on my head as a result of days like this and there are a lot of them. alix: in the last week we have seen volatility picking up. i want to show you what i have a my bloomberg terminal comparing what the motility futures have done in the past month. this green line is what traders were expecting volatility to be just a month ago, pretty much nothing. about 12 right now, and then maybe 14 and then 16 in a few weeks. at flashforward now, -- but in septembernow, we're looking at 26 and october, 22. it is still a shocking reversal from what we saw just a month ago. the: what is working in

markets these days is momentum. buy strength and you sell weakness. they bring more on themselves. think they hold sway for a while. i do think fundamentals matter. i am a fundamental analyst at the end of the day. volatility may increase before gets better, but the fundamentals are not indicating a recession and i think a recession is essential if we are going to have a truly terrible market. scarlet: is momentum driving everything? i think someone like david einhorn would agree. it is headed for probably it's second year of decline since he cofounded it. what do you do when the value is there and you continue to chase the momentum? to a certainure it degree. you could switch policies and say i become a momentum investor, but there is an old

adage on wall street -- if you are going to panic my panic early. i lived -- if you are going to panic, panic early. i live through this in 1998. so far, the fundamentals have not been that in the u.s. or western europe. they are not terrible in china. but we are leaning into it and anticipating things in a negative way. i would like to flip it around. if i were two-seamer positiveness, i would be more concerned. see moreere to positiveness, i would be more concerned. valuations are ok right now, but not compelling. alix: you mentioned 1998, and beenis something that has percolating. i charted the s&p back to about 1997. what we are talking about is this pretty severe dip of about 15% that happened in 1998.

what do you anticipate we will see now? john: i didn't think we would see this. i think we could fall another 5% to 10%. , 1998 was of the year transitory, not ephemeral. it was full of sound and fury and at the end of the day did not signify that much. day, i don't the see those things that normally make the markets hot. i have been wrong before, but i don't have a fundamental reason to turn negative yet, and that bothers me. i like to go with the flow. alix: how do you factor in china? about 60% of the august selloff can be exhibited to china according to some calculations. what you do with those figures? john: you have to ask yourself how bad china is really. i have heard for years china is going to collapse. maybe they are right, but i

don't see it in the numbers. the numbers that came out today were not really that terrible. the nonmanufacturing part of the economy was growing. the manufacturing part was contracting, but not an enormous contraction. i think this is starting to build on itself. it could get worse, but at the end of the day i think fundamentals matter. fundamentals matter, but there is a seasonal pattern to things as well. september will be an awful month for u.s. equities and you could say we are headed in that direction. do you continue to sit things out right now, or is there a reason to get a now if your belief is that valuations are good enough to want to stay put? john: the violations are fine. it depends on your time horizon and what you are trying to do. the valuations are fine. it depends on your time horizon and what you are trying to do is stop why not step in their?

--there? i'm just not sure that happens right away in the next two or three months. alix: do you think it scares people out of the market? john: it scares me. alix: or do you think it's there's them from getting back into the market? john: he didn't in 1998. -- it didn't in 1998. two months from now, someone who would not buy a stack -- buy a stock at $10 has to have it at $12. thele who would not tell market now have to. mind do get change, but they were himself back and that is the essence of wool or bear markets. onx: very calm john manley this very dramatic day. thank you for joining us. scarlet: coming up, a day of right across the board for the equity markets.

we are watching this -- the stocks in the final hour of trading. ♪

scarlet: welcome back. and -- scarlet fu here with alix steel. alix: right now we are holding steady near the lows of the day. matt miller joins us with a look at where we stand. in about 45 minutes is the close. it feels like monday or wednesday. matt: it happened on one friday and basically, to mondays. we are seeing big drops on the dow jones industrial average more than 400 points. we have been down more than or 51, but i'll -- more than 451,

but a lot of times when you see a big number at the close it can accelerate. be mindful of that. and i want to just point out as you probably know, circuit breakers are no longer into effect when you get about 25 minutes to the close. we are not there, and am not trying to be alarmist, but say we were down 6%, if you then 10%, no circuit breakers can really hold back losses when you get into the close. 2.6 percent.own both the dow and the s&p are as 10%er at -- bigger than losses from there may high. the nasdaq is down 2.5%, negative for the year. and we haven't seen losses like this for three or four or five years. -- for three years, four years, five years. dow, august was the

worst month in 17 years. oil.a look at i have been talking about oil all day, but it seems to drop even further, now down 8%. interestingly, american airlines and delta are up. obviously, fuel is a huge part of their operating costs, plus they got an upgrade from deutsche bank. there are some stocks it is helping, but a lot more that are hurting. if you take a look at murphy or noble or pioneer natural, they are down. they are among the top 10 losers on the s&p 500. the biggest loser of the day is netflix. interesting because bank of america came out and raised , its price target to $133 per share because it is

starting in japan and going worldwide. tree came out with 15.3 billion dollars up to $15.6 billion per year and analysts were looking for a little more than that, so short of estimates. and it got a downgrade on top of copper prices continue to fall. these are the top three losers on the s&p. a lot of losers and not too many winners. it is going to be exciting as we go into the close. obviously, along -- a big problem if you are long on the close. a lot of people will be white neck going the close. the close.uckling alix: a lot of traders i talked to last week were like, thank god for last week, because we

actually made money. a lot of volatility here. scarlet: i was just looking at a headline that said for out of five on the s&p are lower. now for a look at some of the top stories crossing the terminal at this hour. president obama is on the verge of securing enough senate votes to sustain any resolutions rejecting the iran accord. 33 senators, all democrats and independents all back to deal. av --gic number to uphold a veto, 34. alix: and google is changing its logo. the company says it is to better reflect the world on its devices. google says the changes are meant to make it easier to identify the search giant on

even the smallest screens. scarlet: speaking of logos, scrapping the logo for the 2020 games. thelgian artist claims that lefton the right -- on the copies his on the right. and the sameonth story for new markets. the emerging market economy that has driven much of the growth in the past few years has hit a wall. and it raises the question of whether china is seeing real trouble. alix: is this part of a cyclical downturn or longer term changes in the global economy? joining us now is just an. a great article out today. what is your conclusion,

structural or cyclical? up to: i am not concluding it, but there are signs that there is this structural shift going on where the world is headed toward a plateau in how many things we buy, how much stuff as opposed to other economic activity that actual take the form of goods that you need the resources to make. scarlet: there are several transfers of wealth happening. there is a transfer in that we do not buy concrete goods, but virtual things, and we pay for services. all of that does not always get reflected in the data very neatly. the charts might be deceiving when you look at them. justin: right, and there is this dramatic shift in the u.s. economy from being in the 1950's and 1960's mostly goods. most people spent their income on two thirds stuff. and now it has flipped and it is one third stuff and two thirds

services. scarlet: the trajectory has really increased. there is a similar trajectory in other developed countries. what is happening in the developing world is this is happening as well, but much earlier in development for a lot of countries. that is one of the issues in china right now. clearly, there is a slowdown in mand for natural resources there. and not just slowdown, but absolute collapse. chinach of that is cyclically hitting a wall, and how much of the economy is intentionally shifting away from being manufacturing focused and moving toward services? alix: i-40 out that not only is it -- and pointing out that not only is it slowing down, but accelerating, too. justin: the one thing about that is a lot of the up to date trade data we have about the biggest economies in the world show a drop so far this year.

a lot of that is that will prices have dropped a lot, so trade volumes drop a lot. scarlet: what about the demographics? we talked all the time about how we are all kind of turning into populationge elderly and not enough of a birth rate to keep things going. this is the case in china as well where we are expecting most of the growth to take place. justin: the u.s. it is population forecast just last month and basically, their median forecast is that by the end of this century the global population will be reaching a the 11 billion range. it's a lot more people than are here now, and there is growth, but there is this sense that there is this sharp growth trajectory and that it is slowing. clearly, that has already happened in the developed world. especially in europe and japan,

less so in the u.s. how quickly will emerging markets make that turn? because of this enforced rule, although they are starting to back off on that. but it will be interesting to see in india, the middle east, and other places. scarlet: it points to how he might need other metrics to look at how changes in the global economy are taking place. alix: like maybe your smartphone app is a better indicator. justin fox, thanks so much. scarlet: still ahead, new bloomberg des moines register poll numbers show that donald trump is in the lead in iowa. ♪

alix: now onto politics. the latest rolling out of iowa shows donald trump leading. scarlet: then carson at 18%.

ted cruz, number three at 8%. everything suggests that trump is making headway in large part because of quality that conventional politician and wisdom with a would torpedo his campaign, instead he is just getting stronger. john: it is true, also he is a great man with great hair. the des moines register i what poll, which is the gold standard of pulling in iowa, we wanted to understand what is going on with tropic. has businessat he experience. they like that he is wealthy, because they think that means he is beyond being brought by potential donors -- box by donors. by potential the number one thing that people like about him is that he tells it like it is. people do not necessarily say

donald trump tells the truth about everything. it is that he speaks his mind he is not constrained by political correctness and people like that in their candidates as well as their friends, i guess. scarlet: he says he's not going to cut social security, not going to attack some of the entitlement programs and that has played well within a certain demographic within the republican party. socialot cutting security plays well with everybody. but he has attacked the hedge fund industry and has said, these are people getting paid to get oil with murder. securities interest should be taxed like ordinary income, and part of thea traditional republican party. but it is part of the tea party part. trump is doing something a

little unusual, but getting benefit from it because he has tapped into this part of the party that has been hard to reach. alix: which is ironic, because he is really rich. but also like with bill clinton, when he has been asked if he favors higher taxes, he has said, i could pay more taxes. donald trump says the same. people kind of like that. alix: john heilemann, thank you very much. tune in tonight at 5:00 p.m. eastern. scarlet: we have much more coming up. we will take a look at it will prices. ♪ -- oil prices. ♪

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i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. alix: welcome back. i'm alex deal here with -- alix steel here with scarlet fu. scarlet: officials are saying

murder rates are rising across the nation. with the summer not it over, 104 people have been killed in milwaukee, an increase of 17% in 2014 -- 2015. had anities that have increase, washington, st. louis, and baltimore. baltimore, for example, was up to 215 over 138 at the same time last year. alix: kim davis is refusing to issue licenses for same-sex marriages despite high court ruling last night. a federalen called to court hearing on thursday along with her deputy clerk. so called boomerang employees, workers who returned to their previous employees are on the rise. in the past, employers have written off an employee that has gone to another company, but

three fourths are now saying they are more accepting of former employees than they were just five years ago. researchers at the national institutes of health say being overweight or obese at age 50 may affect the age years later when alzheimer's strikes whenstop it will take -- alzheimer's strikes. they will take larger studies to fully discover this link. researchers say healthy weight at any age is better for your overall health. there were worries by some in the alcohol industry that legalized weed would cut into existing profits. but in colorado, alcohol sales are up. the two can be viewed -- can be mutually beneficial after going head to head in the fight over legalization. alix: those are some of your top stories of the day.

a quick check and i should point out, we are around the lows of the session. it is a pattern we saw quite a lot last week. if you have a lot of algorithms buying, that will trigger it. no one wants to be wrong overnight if you are going to get any it out from china or perhaps result. we around the lows of the sessions for the dow. torlet: it is in contrast what you are seen in china in the past four days with government coming in and buying to push the indexes higher off their lows. that is not happening in places like the u.s. but when you have so much nurses nervousness, and people are so quick to freak out, it picks up the pace of buying and selling. alix: currently for the dow, volume is off by about 2% when you compare it to the 10 day average.

it is going to turn into labor day week, and that is a treating -- that is contributing to the volatility. crude ended the best three-day rally in 25 years. from a, let's bring in gianna , who joins us now from chicago. seeing 7% moves daily in the oil price. that is not the typical standard. what do you make of it? gianna: a lot of volatility in the market and we will see this as it sorts itself out, but i would say that crude fundamentals have not changed. i still think we will see some downturns before we see any kind of long-term up sick in crude oil -- uptick in crude oil markets. scarlet: what do you make of

what opec said, or the remarks ,hat were published yesterday that they are interested in fair prices, even though we do not know what fair pricing would mean? do you take it at face value, or was this a political move? gianna: there is precedent for this. in 2008, they did reduce production of the global markets and they did that in the form of a large assembly meeting, as they do periodically. i don't read too much into this. i would say that it is premature. when used think in terms -- when you think in terms of cooperation, what do you mean by cooperation from an opec producer? then you are looking at all of

the shells and chevron's of the world. then you look at countries like norway, brazil, mexico. how do you get all of these independent producers to fall in line and reduce crude production output? i think it is easier said than done. with indeed, especially the likes of iran, who just wants to pump the matter what. what will set the floor of the gianna --this point at this point? at the if you look floor, that was in about 2008. that is are really only guide -- is really are only guideline. ring withinbegin to the opec organization. now we've had markets pull back up. awayt is still a long way from saying you are out of their

territory. i think there is a relief rally in crude oil prices, but it might still be premature. i think it is very premature. they were still a lot of supply on the global markets. scarlet: and if you look at how will christ our trading today, that would back that idea up. come in i -- how crude oil prices are trading today, that would back that idea. coming to our chart. we are the worst performer, down 22% since june. gasoline also off by 21%. gianna, when you look across the otherity complex, what fuels or oils do you look at? is oil leading the way, or is it coupled with other commodities? isnna: i would say it

leading the way. and china is playing itself out across the commodity complex. oil is leading the way down, but markets will be looking at china to see how china works its way through this economic slowdown. the slowdown is playing itself out across the whole commodity gasoline.th oil, china is the biggest consumer of the asia pac, if you will. industries.fect all in crude oil has been in bear market territory as it leads commodities. alix: thank you so much, gianna -- gianna bern. be4:00 today we will

miss?"ing "what'd you scarlet: we will get pretty nerdy. ♪

alix: welcome back. i'm alix steel. we are 20 minutes before the closing bell and picking up steam into the downside of the close. we need to head over to matt miller. part of that is oil, even after the market close oil keeps trading and that has really broke ited as well, down level for the day by about four dollars. matt: that is right, they settle at 230 on the nymex, but then

they continue to trade after that. we are at the lowest levels of the session, just breaking through a loss of 500 points on the dow jones industrial average. 16,025 the level he there -- the level there, and the s&p 500 sliding 3.2% and the nasdaq down as well. you have numbers like these, they will get bigger and bigger as we get closer to the closed positions. people want to just get clear before they go home for the night and crack a beer on the long island railroad. i want to show you something i've been talking about all day and a lot of people have been interested in being. -- in seeing. you can do any commodity really. it is the sag function.

a lot of you have gotten to this screen. you can go over and clicked on heat map. i have made it a 10 year breakdown. the columns are the months and the rows are years. i'm using the dow jones industrial average now. go over here to august and you can see that the average loss for august is 8/10 of 1%. we lost 6.6% in august, so it was the worst august we've had on the dow in 17 years. look over into september. september is typically a gain of 6/10 of 1% over the last 10 years on average. the day 3% here. but the worst septembers have and 2011, both of them right here. 2008 was the financial crisis and 2011 was the big correction we had there. the same was true in august.

it is a great function. you can use it for oil, commodities, indexes. you can see where the risk is seasonally and how we are doing compared to different years. you will have outlier years. very interesting function a lot of people have been asking me about today. i want to bring it up and show you how you get to the heat map button so you don't just see the lines there. now you've learned something for the day. because we have been talking to pretty much in the anchor seat all day and we have been talking about the big drain on the indexes, but now i want to show you the financials. j.p. morgan chase and goldman sachs among these two alone are responsible for a 60 point drop on the s&p.

these two taking away 60 points from the s&p. we get back to oil, to copper, to gold, to alix's realm here, the breakdown of commodities. crude now down a percent. -- 8%. we haven't seen a drop like this since february. this goes back since before february. doing as badly, and gold actually up a little bit. i'm hearing my producer, jamie, now telling me crude, the worst day since november. it should not be so hard to deal with. and definitely seeing airline stocks rising. murphy oil, freeport mac moran, and goldcorp here all down. andthe biggest drop here

goldcorp not doing as poorly. interestingly, the gold miners aren't as much of a way to get into the underlying commodity as they used to be because people are using etf's. i'm sure alix could talk about that. i want to whip around and show you how is the beginning of the day people were going into treasuries the same way they were going into gold. down sixeld we are basis points because people are buying these 10 year treasuries. 2.51% is what it is yielding. i have left you with what -- with a lot to talk about their, ladies. .bviously, a banner day a 9% drop in oil and there is so much to cover. alix: it is just me, matt, so you will have to stick with me. look inside my bloomberg terminal, you can see the money turning into the 10

year yield. obviously, money goes into muscle there is more demand, and the yield wiser going down in reverse correlation there. what you see moving is gold. it has not been a typical safe haven for a while, but today it is getting a little bit. it is up by about five dollars. the ideas to put your money somewhere instead of stocks and commodities. we can interview this to china manufacturing data that came out overnight, quite disappointing, the lowest level in about three years. selling over there in china. eventually those markets closed and it spread to europe and here. matt: i thought it was ironic on a great day that william bassett junior comes out with a great chart showing us how china does not hold us anymore, they prove .hat they do

they can throw the entire global equity markets into a selloff that last three weeks. china is an think issue for the u.s., then you are not long equities because it is really a problem rippling around the world. asant to point something out we are just 14 and it's a way to the close. there are only two gainers on the s&p. american airlines, which got a -- an upgrade from deutsche bank. and a lot of industries don't mind seeing the price of oil come down another 9% today. and cablevision is the biggest gainer on the s&p 500. onfigure, the biggest winner s&p 500 today, even as apple is looking to make its own content, people are buying cablevision. alix: that is a great point, because if you cannot buy chinese stocks, you will end up buying commodities.

own commodities and therefore it spiraled. chief investment officer is joining- krishna us from his firm in new york. what you make of this day? it is the same set of issues. i think we reacted positively to dudley saying all sorts of words over the weekend, and stanley fischer also saying harsh words and reacting badly. at the end of the day, it is about growth. growth is slowing down and we have to slog through all of this. -- how muchny more more leg does this have as we get into the spillover from august krishna -- from august?

: they either have to have a selloff or they will have to say they are not going to do anything. right now, the fed doesn't have until 17, but maybe the employment report will provide a bit of a stock. alix: and all of our joins us from bloomberg news. -- oliver joins us from bluebird news. -- bloomberg news. still not dramatic shifts. 21 people that we surveyed, 17 of them still have the same estimates that they had pretty much toward the beginning of the year. pointed outing we earlier is that adam and other folks that have brought down their estimates, they are not bringing them down by a huge amount. from one saying that he

will move the s&p lower, and i say that carefully. move is about 2200. it is no small feat for stocks. they have a long way to go, especially as the said rate hike -- the fed rate hike is now back on the table. it does seem like we will have a few hurdles to get there. does theshna, how much pricing of the market have to do with things like oil prices? it seems that is leading the energy prices lower. thehna: oil, it can take market significantly lower, but the probability of that is probably small. the story here is not oil. oil is reacting to china just as much as the rest of the market.

the central story is the slowdown in china and what, if anything, the fed does to remedy that situation for the u.s. economy. aix: that was also the story year ago. what is the difference? krishna: there is not much of a difference. thing is that the markets are slowing down and -- the only thing is that the markets are slowing down in china a bit more. markets didty violation -- and evaluation. this oliver, what part of did you find in your research versus just models? there is no config -- no quinton's that you see every are volumes -- there is no coincidence that you see happier weumes and deeper selling as get into this every day. oliver: a few things have cropped up, one is that we are

back to a volatility regime that is a little bit more normal. it is quite at higher than where we had been, but not outlandish compared to where it normally is. i will say that something that you do here, there is a lot of choppiness. rule 48 has been here to make sure that you operate smoothly. and theyle get online feel there is going to be this trading rule enacted that has only been used 75 times in the past seven years, it definitely indicates we are in an environment that is not the complacent default to bullishness that we have seen. and when you look at the vic's vix futures are right now, they had jumped up to my but about week later they have come down. we had thin and pretty high,

around 25%, 24% three months at -- out. that tells us there is more rocking as down the road. it really affects what we see in the future. with,o you compare that let's say, january 2016 and we are at 23% on the bigs in the the vix on the-- futures market? doesna: the fact that it remain elevated for two or three weeks, i would find significant value in that piece of information. at the and of the day, it comes down to whether we will see some data point that gives the market some level of comfort to keep it from going off a cliff from a growth standpoint. and the policy, including the

fed, will remain supportive. that will drive things more than willing else and the vix adjust itself as we go. everyone knows about it, so it is sort of captain obvious at that point. int happens with the market ?eptember, does it come down what is your prediction? krishna: the likelihood that the calms columns down -- down, i think the fed would have to pass in september. or it makes it obvious to everyone this is a one and done kind of thing. because the markets will probably react more privately. we are just down by 473

points on the dow. at one point, oliver, we were down by 547. going into jobs friday, how does this set us up? oliver: going through the bull for jobst meant a lot because people were extrapolating on the fed. at this income, i feel like we are at the point where people really want to have more confidence in the u.s. economy. was, ok,le there it jobs numbers are coming in strong and that could he perceived as hawkish. over the past three months or so, the volatility surrounding some of these economic numbers has subsided a little bit. if you take that into account and you think people are less concerned about what a volatility rate hike will bring, you could see that recoil by the

market. is that something that will propel us higher? that is hard to say. alix: krishna, what is on your shopping list as we have these down days? : as we have these want output,ys down in the and is probably good. rates will stay low for a long time and in an environment, equities do well. but i would say a diversified portfolio of you -- of global equities, especially european and in that context. alix: krishna, they could for joining us, as well as oliver here in new york. scarlet will be joining me for a one-hour special. ♪

alix: where one hour -- where

moments away from the closing bell. stay tuned for "what'd you miss?" there is cheering, but there is a brutal day for wall street. the dow jones industrial average losing more than 400 -- more than 450 points. the question is, "what'd you miss?" august.miserable we have the breakdown of the meltdown. are china and its ever-changing rescue plans really to blame? housing,s all about housing, and more housing. it's a bright spot. what does it mean for the fed? we begin with the stock market. it was a wild ride. volume did pick up into the close, about 5% above the 10 day average. but overall, you'oo