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're looking at

complete destruction of stocks on the day. it really accelerated into the close. i most the s&p stocks are in the red. although sectors are lower. we really want to dig deeper into the carnage we saw today. we want to get to matt miller in the newsroom. losses forbig indexes across the board and commodities as well. a lot of asset classes some big losses. not golden treasuries, but i will get there in a second. take a look at the big major indexes. close, a five point -- 500 point laws. we are recovering a little bit from that. averagejones industrial having a tough first day of september after the worst august it had in 17 years. the s&p had the worst month in four years and now we are kicking off september with a 3% loss.

a question we been asking since this morning, will we touch the law -- the august lows? the nasdaq negative for the year, down 3%. of just about 3% across the board. take a look at my terminal here. i pulled up a chart with two things on it. the green line you can see here s&pwall street strategist 500 forecasts for year-end. the blue line is the s&p 500 itself. i'm just looking at this because a number of analysts and strategists, adam parker of ,organ stanley brought his down not a huge drop but moving closer to consensus. gape is still a pretty big between strategist estimates for the year and the s&p as it stands right now. nothing kind of gap you see very

often in this five year history of the s&p and strategists forecasts. take a look at commodities as well. gotten crushed today, the biggest drop since november of last year and one day. 8.2%. we were seeing a 30 handle for a lot of days there the last couple of weeks. it does bring enough damage to pull down a lot of the producers. murphy oil one of the biggest losers on the s&p. energy companies are kind of the biggest weight on the index along with financial companies as well. financials and energy dragging down the s&p but all 10 industry groups were down on the s&p 500. atrlet: let's take a look where it all started this morning. i want to look at world manufacturing data. it wasn't just china that we saw

disappoint. ups represents the pmi china, russia, and france. big declinel had a lower starting last month. we really look at this 50 line right here. that signalsw and we been in contraction for a while. the last month we think all of them decline, not just china. there are problems all over the world. scarlet: when you look at europe, unemployment in that .rea unexpectedly declined 10.9% was the lowest since early 2012. not every single data point is that discouraging. i want to look inside my terminal as well and show you globalce i tracked the flow equities. this is one of my favorite functions. it doesn't make much of a difference here because you don't see much of a move.

here is where european markets open for trading. you see this big long decline, that is when the u.s. market opened for trading. ever lower declines and were just off our lows there. over a one-year period -- there we go. that we reachow back here in october 2014. over the longer term, over five years, this is still a chart that would encourage those who are long global equities, still up 46%. that's great perspective when we look at the global markets. sing -- senior global market strategist who joins us from miami. and mike reagan has been looking at all the action throughout the whole day. catherine, i want to get your

big, broad take when you look at a market selloff like this, i one point down almost 550 points. one regard is the fed. once we have a decision that will more stability into what direction are going as far as monetary policy. comes with an additional stimulus, which i think is the most likely scenario, i think that would also dispel some of the fear driven volatility that the market is encountering at this point. the u.s. economy is up and down. the concerned about velocity of the recovery. .anufacturing, exports i think this confluence of factors is hitting risk, not

just emerging markets but obviously global equities. scarlet: certainly there's a pattern at work when it comes to u.s. equities. mike reagan, you have been covering the markets for a long time. september is traditionally a week month. it's the worst performing month of the gear for all three indexes since 1971. here is how it breaks down as the month continues. stocks tend to start the month off relatively strong. they peak about midway through and then you get a pretty steady decline after that. end do you know about the of the third quarter, start the fourth quarter, that encourages this level of selling or pessimism? average s&pk the decline is about 1% for september. the big story with these markets , volatility is becoming its own catalyst. it is pushing people to sell,

i'll briefly as you pointed out the economic data is weakening. that is certainly part of it. but these huge price swings are causing a lot of your more sophisticated port olio's -- portfolios are levered off under sanctions that you have eczema volatility going forward. now they are looking at -- you amount of volatility going forward. that's why were seeing these heavy futures trades bringing the dow jones down 400 points even before the markets open. the volatility itself is its own catalyst and exacerbates the selling. point about a great the volatility becoming its own beast. what stems that so we stop the flood of selling? kathryn: i think it has a lot to do with what's going to happen in september. the real risk is if the fed does

decide to hike, which will be on -- some of the next two weeks data will provide some clarity. if we get a strong number on , iday, let's say 300,000 think the fed could very well kickoff in september if they want to. if we see a good data point on friday, i think that is the real risk. the threat i think to the market, and the reason i think if in the case the fed hikes and turns hawkish. if we see the long-term terminal -- as the fed chairman said today -- and i'm paraphrasing.

it's not when we kick, it's the magnitude of the ultimate hikes. i think that will be critical. so it has to be like goldilocks, not too hot, not too cold in any direction. coming up, what massive country has been hit so hard in the second quarter? a hint, it is not saudi arabia this time. ♪

alix: before the break, we ask what large country is getting hurt so bad by oils to client its gdp is shrinking? scarlet: the answer is canada. his first quarter contraction has been revised to 0.8%.

it's a tough time to be running for reelection as prime minister stephen harper is. it's really alberto that is feeling the pain the worst. alix: it's still really brutal when you base your budget around oil and all of a sudden it is under 50. we're back with kathryn: catherine as well as michael reagan. let's stay with oil and talk about one of the biggest movers of the day. oil prices down about 8%, dragging the energy stocks down as well. mike: obviously we had this huge rebound in oil, like 27 percent over three days as opec in their bulletin suggested maybe that would start thinking about cutting production. i guess people just forgot about that are just didn't believe it. again today,uge

energy stocks once again leading the market lower. that rebound in oil was short-lived. thought, lot of people can you really trust what opec has to say in these bulletins. they sort of follow through with what they're talking about. look at energy stocks, do they need to read price more in terms of lower prices? kathryn: i agree with mike, there is intense volatility. today's decline is not giventher that surprising the last couple of days. i think were going to see oil prices turned to the upside. with the topic of opec, you have iran which could disappoint in terms of velocity of how quickly they can come to market. and finally to see how production declines out of the shale producers which at current

levels, many of them just are not profitable. termld say over the longer , we are expecting to see oil turned back to the $65 a barrel region. scarlet: oil was another leading indicator for many people. flagswere clingy of red left and right. -- plenty of red slacks. witharkets of session credit spreads might be a little overblown. they're far better than that were back in november and december. quiterket is being discriminating in the high-yield market. as we were talking about this, what the chart doesn't show is where the volatility will -- will come from. how do you view it, and what is

your take on it? kathryn: in the high-yield market, credit spreads are extremely high. i think at the end, the real threat here is the question of recession, if the u.s. is slowing down, the fed is going to hike. i cannot imagine a bear market or credit spread in ticket of of a contraction unless the economic data manifest that, and it hasn't gotten there yet. i think a lot of the fear we talked about in the beginning, this is a fear driven market. the credit spread is widening. it has to manifest some clarity before actually see some recovery. alix: if you look at the bloomberg world index, we have not yet seen it leaked through to the economic indicators. kathryn: that's exactly right. from the u.s. perspective, i'm expecting a deceleration in the second half. i don't think we will retain the

amount of inventory accumulation. i think that will retract. i think the strong dollar is a real risk and that's part of the reason why the fed is going to be reluctant to hike in september. great stuff, thank you so much for helping us break it down. when we come back, which major country just held raising interest rates because it believes the u.s. fed will delay an extreme increase? the answer, when we come back. ♪

alix: i'm alix steel. scarlet: and i'm scarlet fu. "what'd you miss?"

the answer is australia. changing language on expectations for rate hikes, but very vague. the: it's really reading tea leaves, but that causes having ramifications for monetary policy and other countries. scarlet: currency markets are coming off the most follows -- most volatility in eight years. we want to bring in a global head of currency strategy at citigroup. thing that was pointed out this morning that has gotten a lot of traction online is, they say the one trend that matters more than anything else is the rising correlation between the dollar and the difference between the dollar and interest rates. this is coming back up. what does this tell you?

grexit indicates that the interest rates are leading the correlation. you have the expectation of the fed moving center against easing. this brings some downward pressure on the dollar. the market is probably still long dollars. trade.l is a crowded alix: look at the trade weighted dollar index. bank of america speculated 2% of the 14% rally is due to the fed. meaning there is a lot more dollar strength to go before the fed actually hikes. what do you say to that? grexit depends on how fast the fed hikes. it could be a different reaction , as we continue to get numbers they will keep hiking until the numbers get to level we think are sustainable. a lot depends on whether the fed

hikes and apologizes for hiking or if it says we're doing it because the economy is stronger and and take it. else that washing pointed out is that the euro has been strengthening the last couple of days along with the yen, which is unusual given that both these countries are doing their best to keep their money really cheap. if you come inside the bloomberg terminal, there is a chart of euro dollars and $10. you can see they boast had it -- both had a big boost at the end of last week. the correlation is the highest since 2007. what is the ecb response to the they had?ng think on the margin it helps the currencies but it helps exporters and their profit margins much more than it helps activity in the eurozone. the other concern is a bit of an impact on inflation.

when you see this kind of correlation, the first answer is basically seeing the dollar move. alix: it's not about the euro, it's about the dollar. >> the yen and euro or both appreciating simultaneously. scarlet: so is it the carry ifde being unwound, and that's case, how much more that is left? >> they were funding currencies against the rest of the world. once that short is completely eliminated, we could go back to the carry trade. be dollarsay not against euros or dollars against yen, even though that's what we think about every morning and we wake up. againstck moving commodity currencies, because in a sense, those are relatively

safe havens, diversified economy. it is exogenous to the rest of the world and that puts them in a better position. will have the pleasure of speaking with our guest once again after this. alix: where could you get an on yourld -- return investment, especially if you like fish? the answer, when we come back. ♪

we ask what is the investment that's just returned 800%? scarlet: the answer is fish from the north atlantic.

soaring.h exports are 800% sinceeturned 2011. globale're back with the head of currency strategy at citigroup. stephen, you were looking at the anatomy of a flash crash and the implications to the broader market and the economy. we found that when you have a big move simultaneously in equities and currency markets, it seems to define the episode of a flash crash. alix: that's what we're looking at. 2010 andalk about october 2014. the economy did just fine after that and the financial markets did just fine. painful forat it's us in financial markets when

these events occur, but there are not many lingering effects. four -- 4% swing in the dollar yen and a 6% swing in the 10 year yield, you would think it would cause a major panic in the economy, but not so much. farlet: the indication so is that they seem to have a handle on the devaluation. >> that is true. there are two elements. there would be a lot of competitive evaluations. the second part is controlling the currency by controlling the symptoms, you can do it for a while, but it's the underlying issues of the chinese economy, even if they manage to be stable for a while, we could see a lot of upset. alix: thanks for joining us. scarlet: we will be right back on this special one-hour edition of "what'd you miss?"

scarlet: welcome back to a special one hour in addition of "what'd you miss?" alix: stocks getting hammered today, the major averages falling about 3%. matt miller he joins us now with a look at the best and worst s&p performers of the day. i'm guessing there were about two stocks that were the best performers of the day. matt: there were three, in fact. i will take you through all of them. i can take my two of them were gainers. not cablevision. it was up 2%. i'm still trying to figure out why.