scarlet: angela merkel says we are faced with a defining moment. she urged the eu nations to share the burden of taking and refugees. where lawmakers have just 12 working days to conclude a deal to prevent the shutdown of the federal government. scarlet: good morning. i am scarlet fu. pimm: i am pimm fox p we are 90 minutes and the trading day in new york. thatstocks rising after late rally in chinese markets. s&p 500 gains 1.5%. the dow jones adding more than 1.5%. 50 points away from the 2000 level. nasdaq gaining 2%.

a lot of that is apple. scarlet: apple and amazon. nasdaq is positive for the year. pimm: apple, everyone getting ready for the announcement tomorrow from apple. amazon.com up 3%. wells fargo leading the financial shares. netflix, two of the stalwarts of the technology industry. competition with netflix. scarlet: they ended that contract for couple programs or movies from paramount. people wondering whether they should renew the netflix membership. .imm: competition from amazon

amazon video picking up steam. scarlet: let's go inside my bloomberg terminal. going long on volatility has become the trade over the last few days. the vix coming down a little bit. off its highs on august 24. still elevated when you consider 17.03. everyone was going short the euro and the yen, buying up higher-yielding assets and those intree collapsed august. you wonder whether everyone is going to get into that trade and it becomes a crowded trade as well. pimm: everyone rushes to the exit and people are left losing their money. let's look at how bonds are trading right now. a bit of a selloff going on across the old curve. -- the yield curve. scarlet: near for your highest.

our-year highs. pimm: the japanese yen gaining a little bit. scarlet: the australian dollar getting a big boost this morning , up 1.2% versus the u.s. dollar. there was an improvement in business conditions and that overshadowed any concern about china, which has been dragging currency.ussie over the longer term, it has been one of the bigger losers. pimm: we saw a week ago, this trillion central-bank not changing their interest rate. -- the australian central-bank not changing their interest rate. let's take a look at the top stories at this hour. dick cheney is blasting the nuclear deal with iran.

the white house is firing back. cheney spoke in washington. >> i know of no nation in history that is agreed to guarantee that the means of its own destruction will be in the hands of another nation. particularly one that is hostile. president obama is asking the congress to do something unique. historically and dangerously unique. the result could be catastrophic. pimm: the white house responded by posting a video montage of cheney's statements about the iraq war. blackstone group has purchased strategic hotels. a deal valued at $60 billion. scarlet: there is another deal,

this one will create one of the largest owners of network television affiliates -- it is valued at $2.4 billion. the new company will be called meredith media general. the distinction is the amount of debt. pimm: they will have to borrow some money. scarlet: the plan to start their parago nexteover of week. trying to persuade shareholders to accept it. verizon will unveil a free ad supported mobile streaming video service aimed at 18-34-year-olds. horizons has 70% of the age group watches video on mobile first -- verizon says. it is a dubious

distinction for harvard university's endowment. the managers are the highest paid by the endowment has the worst performance of any ivy league school in 2013. scarlet: we will be speaking with the ceo of a mobile startup called invoice to go. china's economy struggling to regain momentum. of the, the president council on foreign relations and spoke on the issues that china faces as its prepares for a visit to washington. >> china is going through structural problems that far transcend everything you just talked about. i don't care up the government intervenes on currency in the markets. that is technical. china faces enormous problems. he comes to washington with the most difficult inbox of any world leader. everything from the financial system to the underlying economy plus demographic challenges and environmental challenges and

political challenges. this regime is nervous. their legitimacy is based upon economic growth that they cannot -- >> do you believe their legitimacy is threatened? >> i do. the idea of widespread unrest in china cannot be dismissed. china cannot have business as usual. the model cannot work. their turn to make this shift from export and domestic. there is not enough demand. there is not the confidence in the economy. this regime is uneasy. >> do we have confidence in this regime that they know what they are going? >> they don't. look at the spasms of market intervention. the old tricks are not working. >> like the military parade. >> that was playing it safe. we tried out the new toys, thanks, the missiles on the rest. tanks, the missiles and the rest.

you cannot find your legitimacy in nationalism. china being more muscular in the region to compensate the loss of economic performance. that has to be one of the messages. >> china is a little different from here. we get a president elected and that is the height of his political power and that it goes downhill. the chinese come in and they have to build credibility. how much credibility does the president have? >> he is the strongest chinese leaders since mao. that is a risk and a plus. he has eliminated any other excuses. if things don't work, it falls on him. the anticorruption campaign is a political campaign as well. it is strengthening his base. if this economy does not turn around, you will see significant pushback. >> i give you credit for being centrist.

if i look at the announcements by the present administration, they mention this and this. back to your book about get your house in order at home. has president obama had a successful foreign policy because he read the book? >> i don't think it has been a successful foreign policy. the biggest weaknesses the middle east. his principal legacy will be in the middle east. you talked about the migration crisis in europe. there cannot be a continental solution to a crisis if the middle east is going through something that looks like a 30 years war. more than half of syria's population is uprooted. there is nothing the outside world can do. it has caused this migration -- >> absolutely. i'm not saying he is the entire fault, but absolutely.

much.edecessor did too president obama has done too little. legacy, theama's single biggest blight will be what he did not do in syria. >> is there some sort of imposed balance of power in the middle that would bring that fighting to a halt and leave us with a status quo? >> we may have 26 years ago go, which is not an optimistic than. the battles of the 30 years war decimated europe. i don't think the locals or the outsiders have the capacity and the consensus. you need to things. balance of power and a shared sense of consensus about what the rules ought to be. scarlet: the president of the council on foreign relations speaking with tom keene this

morning. talka merkel held a crisis to the weekend to discuss the problem with coalition partners. scarlet: with europe widely divided, the chancellor wants a european union wide asylum system. she also agreed to increase spending by $6.7 million to help deal with the influx of migrants. billion. germany has agreed to take an 800,000. hans nichols is in berlin. us a bit of detail about what the chancellor's program is and what its reception has been. : the number of asylum applications they are expecting, the german government has not given a firm figure out how much they will accept. when you see the numbers are accelerating over the last couple days, news has spread out

on social media in the refugee camps in turkey lebanon. will startes arriving in germany. i spent the day yesterday in the main receiving area in berlin. i've is that people there. -- hundreds of people there. another forwarded hundred 50 arrived in berlin this morning. bracing government is for a difficult challenge in brussels, trying to get an equal distribution. -- another 450 arrived in berlin this morning. theel wants to send economic migrants back more quickly. the vice chancellor in germany was talking about 500,000 refugees per year for some time going forward.

they can be 2 million down the line. reporters try to push angela merkel and whether or not she agreed with that number. she did not reject it or deny it or embrace it. that seems a potential ballpark figure of what germany will have to do your after year. ,hen you look at the numbers the number they are talking about, european wide, 160,000. a classic merkel response. clearly, germany is the leader here in europe and responding to this crisis. how unified is her government in confronting this? splitshe faces a bit of a within her own coalition. over the weekend, you heard a lot of politicians from the

sister party in the south criticizing this plan saying it was only going to accelerate and invite more refugees, or migrants to germany's shores. it will exacerbate the problem. merkel has rejected that. she is with the social democrats who seem pretty much on board with what she is doing. pimm: thank you very much. the political ramifications of this crisis. still ahead, let him eat cake. warren buffett joins us next hour. winner ofng with the his charity lunch option today. we are there. ♪

scarlet: welcome back to the bloomberg market day. pimm: let's go straight to julie hyman with a look at what's happening in the markets right now. julie: stocks holding steady in terms of rallies. the broad-based rally was all 10 industry groups higher. we are not at the highs of the session but holding steady. technologies helping lead the game today. i wanted to look at tech movers. apple shares fell with the rest of the market but recovering today ahead of their annual product announcement coming tomorrow. that.pation surrounding ipaddes for the iphone, companies coming on apple tv.

we will see what happens when we do get those details tomorrow. we are watching amazon.com today. the company said it was going to be rolling out a new cheaper tablet for the holidays. a you dollar tablet that is a six inch tablet -- a $50 tablet. competing with some of the other tablets out there on the market. shares are better than 3%. the company rolling out a new pilot program, food delivery service in its native seattle. then, there is netflix. the stock is going in the opposite direction today. not a lot of news driving it. we have seen netflix falling pretty consistently over the past week or so. shares are now below a technical milestone. it is still the best-performing stock for the year to date, this is the year-to-date chart.

you have the wonder day moving average. -- 100 day moving average. it has moved below that technical indicator. it was higher earlier in the session but is now below that technical indicator. .hank you so much we play catch up to a day lost from yesterday's holiday. up, harvard university has the largest endowment in the world. why is it at the bottom of the list when it comes to investor performance? ♪

scarlet: welcome back to the bloomberg market day. pimm: let's take a look at some

of the top stories crossing the bloomberg right now. antitrust regulators in the united states say they have approved ge's acquisition -- they still have to sell some assets to an italian rival in order to complete the deal. is trying tocutive return the company to its industrial roots. google says it plans to test delivery of fresh food and groceries later this year. the trial will begin in the san francisco area. the move puts google in direct competition with amazon.com. online grocery delivery is currently in $11 billion a year business. amazon preparing to release one expensive tablets on the market. they will sell a $50 tablet that will have a six inch screen and will be available in time for

holiday shopping. it is currently half the price of the fire hd tablet. scarlet: disney is adding amazon and microsoft to its cloud the service now talludes 450 digi movies. it has less to do with the specific programming. it has to do with how people are consuming the programming. individual and smaller devices. if you want to watch something, you watch it on a handheld. scarlet: you can do that with netflix. pimm: the software and the ability to navigate -- it's as good as the competitors.

let me talk about the competitors. have enoughrats now votes to give the president -- congress just returned to work today. : powell weekend,: and debbie wasserman schultz announced support of the arend deal. -- iran deal. dick cheney issued a warning this morning. cheney: i know of no nation in history that is agreed to guarantee the means of its own destruction will be in the hands of another nation. particularly one that is hostile. what president obama is asking the united states congress to do is unique. historically in dangerously unique. the results could be catastrophic. pimm: for more, we are joined by

jodi schneider. i'm wondering if you can explain what exactly the 41 votes mean and what is next for the iran treaty. last hour, we had come out andors say that they support the deal, given the president enough votes if all the senators choose to block it to block the deal from advancing to a final vote. they all may not. 41 democrats say we support the president. enough ofent has had votes that would uphold a presidential veto of the legislation. if the disapproval resolution comes across his desk, he will

veto it. the real question is, will they even proceed? pimm: what is the benefit of proceeding with a disapproval vote? senators believe there is a benefit in having a discussion and allowing everyone to vote. congress pushed hard for this vote. the president was going to veto legislation that said they should even have a vote. he said go ahead and do your legislation and have your vote. they will start debating as soon as today. pimm: more from you from washington. scarlet: you have much more coming up. ♪

pimm: this is the bloomberg market day let's look at the top stories at this hour. the iran nuclear deal may come to a vote in the senate.

democrats have 41 votes in favor of the agreement. that would be enough to keep republicans from advancing the measure. is strongly urging lawmakers to vote against it. approval of this agreement will not prevent a nuclear iran. along with a pathway to nuclear arsenal, president obama's agreement will provide iran with the regimeeapons will use for the support of terror, dominance in the middle ance ofd the further their efforts to destroy israel. pimm: the white house launched a preemptive strike. the ministry should posted a video of his remarks on iraq saying he was wrong then, he is wrong now. two republican presidential hopefuls will meet with that kentucky county clerk in jail. cruz havebee and ted expressed their support for kim davis.

she was jailed for refusing to grant marriage licenses to say sex couples. -- same-sex couples. the new law allows for fast track decision to be spent a principal find the procedure. an ole miss have been criticized for being complicated, costly and out of reach for many catholics. anulments. unicorns has jumped by a third. take a look at this information. according to digit capital, the ratio of mobile internet exits to investments has plunged over the past six quarters. joining us to tell us more about this, greg waldorf.

also, joining us from san francisco, cory johnson. abouti want to talk invoice to go. i think it reflects how many people have mobile systems. it tells you the way this technology boom is different from 1999 when so few people had fast online connections. we look at now, when the ability to distribute software all around the world, when you read one of these , you can actually is being sohy there much value ascribed to mobile software. as myiness is available software is available in 100 countries around the world. more than 10 languages. never before were businesses and small businesses able to

download and access the types of software they need to run their business more efficiently, a paid faster, a real sea change driven by smartphones. pimm: you were the former chief executive of eharmony, the online dating site. i wonder if you can talk to this issue of investing and try to get your money out right now. people want you to be successful, but they want you to make them a lot of money. this incredible unique time where investors are ofing to play the momentum companies growing very quickly. ,hen you are an operating guy we are focused on the people who use our software. our investors have to figure out their own timelines. all we can do is add value for our customers. gig -- isared to this

it easy to raise money? eg: it is always challenging because it's a treadmill in the slope always gets higher. fast you are grown, they want you to grow faster. cory: you came into this -- you've seen the better venture capitalists. they arering what thinking right now with a cd thesert valuations -- valuations. what do you think they are thinking right now? >> when you see markets like they were a couple mondays ago, down greatly at the open comment causes people to question the underlying value of the

ies they invest in. these companies are real. we provide software to small businesses around the world. it has enabled -- was enabled by mobile technology. for the hundreds of thousands of businesses that use our software and pay us a subscription fee to send a million invoices a month -- this is not something where companies are out there delivering something for free or have negative gross margins. software is a classically good business. the best investors are making sure that they are in businesses that can really disrupt the market. posit that some of the companies are not real. pimm: the business you are in,

providing an invoice service to companies, is this different than just going after eyeballs. >> absolutely. on theour focus businesses that demo our software. think about a gardener coming landscaper, somebody who comes to your home to fix the air-conditioning, a plumber. instead of pulling out a metal box with a three-part form in and keeping the pink copy, this is allowing that mobile professional to get the invoice out when the work is done. pimm: why has it taken so long for this to happen? why are people still using paper? >> like most things in technology, the software is harder than it looks. it took a real focused approach

to say what is a small business need to help improve their cash flow? pimm: this is something that runs on your iphone or android. , tablet, web,roid we can do it all. the insight we have was that the benefit to the end-user was it improved their cash flow. if you say new technology for technology sake, that appeals to the easy person. if you say this will improve your cash flow, everyone will download that. >> you want to make sure you're going to get paid within 90 days. >> the sooner you send the invoice, the sooner you will get paid. cory: small businesses are much bigger businesses -- it's hard to throw out the names because there are so many. opportunity.igger >> it is totally enabled by technology adoption.

the big apple announcement tomorrow, you will be covering it from the features standpoint. , our appt goes on sale store downloads will increase because more people but a better phone, they will search in the app store and say how can i make my small business better? it is driven by the enablement ar around the world. pimm: do the investors have there is more value per transaction or employee because you can scale big even though you have a small workforce. >> my company was founded by our chief product officer. in the central coast of australia. if you can start a company in a small town, it shows you can do it anywhere. >> do you think if they announce , that will be a

greater benefit to you than a better smartphone? >> i think tablets are huge for our end-users. if you have seen the press over the summer, apple is making a push realizing that their apple stores are this great focal point for small business. that's where small business goes to learn to use their product. they are offering more and more information about what are the apps that will make you use or tablet and smart phone more often. pimm: thank you very much, greg waldorf. to, of course, my thanks cory johnson. coming up here on the bloomberg market day. harvard university's endowment lags behind in returns -- it is first in line to raise pay. why compensation does not match investment performance. warren buffett is scheduled to join us next hour. he is joining us from the

restaurant in new york where he is dining with the winner of the harity lunch auction. ♪

pimm: let's begin with a look at the top stories crossing the bloomberg right now. baltimore bullpen more than $6 million to the family of the man fatally injured while in police custody. freddie gray's death led to rights in the city. six police officers have been charged. -- united auto workers will they choose either gm, ford or chrysler to negotiate their

contract. the talks will determine the contracts for 140,000 automobile workers. microsoft teaming up with delta jumpstart sales of its surface tablet. dell will sell and provide surface.for the asia, the hang seng gained 3.25%. 3%.ghai rising the nikkei down just under 2.5%. new economic data from china and japan. china's latest trade numbers show august exports down 6% with imports plunging 14%. the data highlights the mystic demand -- domestic demand.

the devaluation led to a decline in exchange japan, a-- in better-than-expected revised -- thequarter gdp report economy contracted at an annualized pace of 1.2%. pimm: harvard university has always been at the top. top number of applicants, top-tier education and now coming in at the top for chief investment officer compensation. having a large endowment and a large chief investment officer pay packet doesn't always lead to great performance. in 2013, harvard had the worst investor performance of all other eight ivy league schools.

scarlet fu has more on how harvard's chief investment -- this waspaid 2013. scarlet: it's kind of old. when you look at the number in terms of how much he got paid, $9.6 million, a 99% increase from the previous period. a portion of that was a bonus. harvard lost money. the about nine times what president got paid in the same time. the concept that this was partly made up by a bonus paid for a year that lost money. scarlet: you go back to the idea that manage money for an endowment is a nonprofit job. universities are nonprofit entities. pimm: technically, yes. have your choice.

you can go work on wall street come up to work for a hedge fund or get paid a lot more money. up.need to pay it's a big controversy. this is probably the only area of higher education apart from division i football coaches where you compete directly against the for-profit world for talent. they have to hold onto talent. it's hard to do it when you have state lawmakers criticizing the amount you are getting paid. the return for harvard over the past year is pretty terrible. you and i were looking at this --ction, the function what you see here is a ranking of the different endowments. harvard is the biggest because it has almost $36 million of

assets under management. you look at the one your return, it is not anywhere on the first three. for -- go to page page four. you have to keep going all the way down to number 68, harvard university with a one-year return of 15.4%. pimm: cal berkeley has 69%. , they as the managers will point to the fact that they look at a long-term chart -- is $9 million consistently across the board what other money managers who manage large endowments make? scarlet: bruce zimmerman is the highest-paid. he got a 27% increase in 2013.

is $2.5 million. in terms of his performance -- three-year performance, 9.2%. part of that compensation was a bonus. state lawmakers criticizing the returns that paid for some of these guys. pimm: we have the endowment is -- has therelion been any reaction from any comment from harvard university? scarlet: harvard declined to comment. we've heard that harvard's alumni have reacted about the high pay of its endowment cheeks. of 1973ard class criticized one of the ceos.

maybe you can put it out there that you could probably get a lot of very good money managers who would do it for a lot less than $9 million. scarlet: he probably could. persone wants the best in that position. like,holarships and the the operating expenses come from that endowment. pimm: they will be looking even more closely at it this year. thank you. coming up in the next half hour, warren buffett joins us before he sits down to his annual charity lunch here in york. ♪

pimm: this is the bloomberg market day. i'm pimm fox. it's time for today's options insight. julie: we are coming up on the top of the hour. let's look at how the major averages are performing. off the highs of the session, but still holding onto gains pretty steady here with 1.5% gains or more. we had that rebound in the chinese stock market. let's talk about the options perspective today. joining me is kevin kelly, chief investment officer at recon capital partners. one of my colleagues pointed out the streak in the vix. it is the 12th straight session

over five. is it here to stay? -- over 25. kevin: it was at a 12.6 i -- a lot can happen in a month. it should be here to stay above 24 0 for a while. nobody really knows what the fed is going to do. are they going to move in september or december? there is a lot of uncertainty around that move. that is leading into the futures market for volatility. before the fed started going on vix wastitative easing, around 19 and it averaged there for 20 years. we are getting back to normalization. we are overcompensating for it right now. julie: is it quite expensive now to buy volatility?

kevin: the interesting thing in the market, it is more expensive -- it isrest of 2000 more domestic-based. below thel 2000 was s&p 500 volatility many days at a time. about globalrried growth, not domestic growth. the hedging is in the s&p 500 and not the russell. last friday, there was a big trade where someone sold puts that were only 3% down that expired september 18. they are relying on the domestic market to be stable. julie: interesting, but not surprising given the volatility we have seen sparked around the world. etf thatooking at the tracks the nasdaq.

talk to me about your trade. kevin: one of the reasons why we chose the nasdaq 100 come at that's where the market leadership has been so far. google, you'vet, got the bio techs which helped lead the market earlier this year -- those are the names that are likely to selloff more. the nasdaq 100 is outperforming the s&p 500. we've even seen leaders like netflix breakdown even to our lower-levelthat's a -- you want to hedge using vehicles like this so the nasdaq 100 -- you want to buy a one-to 96.ke put and buy a you get a 3.5% payoff ratio in

this takes you to the end of september. it will lead you through the fed on an update, it is cheaper. julie: it limits your losses. chemical executor this is great portfolio insurance. exactly. this is great portfolio insurance. they make a move, it will make the dollar stronger. the chinese may lower their yuan even more. other countries may get spooked. julie: we will see about that russell 2000. thank you so much, kevin kelly. stay with us. ♪

pimm: good afternoon. it is 9 a.m. in san francisco, and 9:00 p.m.rk, in hong kong.

-- midnight in hong kong. we will take a look at the health of the real estate market in the u.s., buyers and sellers bracing for a possible interest rate increase from the federal reserve. matt: we will talk with the legendary investor, warren buffett, for a sitdown lunch as it benefits a charity in manhattan. ♪ pimm: good afternoon. i'm pimm fox. matt: and i'm matt miller. let's take a look at markets as they climb higher into the trading day and the late start in a shortened week. tilting gains off of what we saw in china overnight -- building games off of what we saw in china overnight. down one point 5%, the dow jones industrial as

well, adding 243 point 216,345. gaining back what we lost on friday. pimm: let's take a look at the commodity complex. crude falling a little bit. europe, up in europe a little bit. copper futures -- matt: by the way, because we had a holiday yesterday -- pimm: right, no trading. matt: well, they were spreading, but no settlement. this is why the nine axes down while the brent crude is up. this is monday and tuesday traits going in as the brent was settled yesterday. pimm: all right, i want to take a look at the bond market and a little bit of dental -- settling going on across the market. the long bond, 296. -- 2.96. i want to pull up two companies and track their movements.

matt: why don't we just let my terminal? because i was going to pull of copper. if you take a look at my terminal, you can see that copper is basically up to a six week high. as china came out with news that it's important august were up. regardless of the market turmoil we've got going on -- pimm: now pull up fcx, freeport --t moore and -- matt lauren freeport matt moore and -- freeport mac moran. for themmore than 3% today. deal to related energy this has to do with our operators in florida and new mexico. teco energy moves higher today.

they are being taken over by a canadian company based in nova paying forthey are teco energy. matt: let's it to the headlines of the hour. pimm: europe is dealing with the biggest energy crisis world war ii. the ecb president is expected to say that the best way to handle to prices -- the crisis is take in the book of the refugees. >> we can handle the accommodation and integration of 800,000 refugees this year in germany. but it cannot be ripped -- repeated every year. we need a different asylum policy. germany, austria, and sweden cannot be the only countries to participate in accommodating refugees. pimm: german chancellor merkel almostrmany will spend

$7 billion more on refugees next year. and playing with europe, there is some encouraging news for the european economy. the euro area grew more than estimated in second quarter. the eu revised numbers for the 1%, up from/10 of 3/10 of 1% initially reported. the growth will continue, but at a slower pace. matt: it is a deal that will create one of the largest owners of network tv in the u.s. the deal valued at $2.4 billion in stock and cash. the new company will be called meredith media general and will be headed by meredith ceo steve lacey. blackstone group is buying luxury owner strategic hotels. the deal is valued at about $6 billion. there are several well-known properties in the u.s., including essex house near san diego.

an interesting deal there in hotels as well. antitrust relators in the u.s. and europe have approved general electric's $17 billion acquisition of all stones -- power.-alstom is tryingpope francis to update the catholic church 's process for annoying marriages. unknown length have been criticized for being complicated, costly, and out of reach -- all moments -- anullmen have been criticized for being collocated, costly, and out of reach. and a changing of the guard for late-night tv. stephen colbert debuts tonight, replacing letterman, and he will take on jimmy fallon on abc and -- jimmy fallon

on nbc and jimmy kimmel on abc. his first guests are jeb bush and the actor george clooney. those are your top stories at noon. next halfng up in the hour, a new day is dawning for rolls-royce. it is called dawn. we will take a look at special , like market share in china where they have gotten hurt substantially. pimm: and the chief executive of under armour tells us why he is still bullish on china. he's planning to open dozens of locations in the country this month. much more on their expansion plans coming up. and a focus on markets with a rally today. stocks closing higher in shanghai. matt: there is been a lot of news to digest today and over the weekend. including the news coming from

china and the debate over whether the fed will raise interest rates next week. michael rourke is chief strategist at jones trading. a little bit of a rally today, but a falloff in the past six weeks. is this driven by china pouring money late day into its trading? mike: it is partially driven by that. i told my clients to ask that 18 torket to trade in the 230 range. weekusly, it was a holiday and people were concerned. i don't think you are seeing strong follow-through here in the cash or trading -- the castrating u.s. market. pimm: michael, i wonder if you could fast-forward, get rid of september and possibly october.

we are at the beginning of november. what does the stock market look like there? i think the highs will probably hold for some time. pimm: the rest of the year, or multiyear highs? michael: i was say the rest of the year is probably a good bet, but it could go further from there. we are under a secular shift from the past year between qe ending, and obviously the u.s. is trying to tighten policy and we are not quite there yet. at the same time, you have andpe easing, japan easing, china and evaluating its currency. pimm: wouldn't that i'll be good for the u.s. consumer? michael: it is excellent for the u.s. consumer. pimm: why not buy consumer stock? the global gdp comes from the u.s., europe, japan, and china, and three of

those four major economies are easing, and we are either tightening or not easing at the rate they are. what, small or midca ps? michael: you want to be in consumer. it wasn't until the oil started and obviously that is good for the u.s. consumer. overall, this is a means and positive story and not a good story for wall street. let's step back for a second and think about how the fed views what is going on. for example, today, a market rally, of 200 points on the dow, unbelievable. in if you take a step back the last few months, you can see that we are still taking a substantial hit.

datee still down year to 5%. that is not good if we are looking at the ira, if you are a mom-and-pop investor trying to make decisions about buying a car or going to college for your kids. it doesn't matter how much today's rally should make us feel better because we had the second worst week of the year last week, the worst week of the year three weeks ago. how will janet yellen view this as far as what will happen to main street? michael: they have said as long as the volatility dies down, they are looking toward tightening. you go back several months when they talked about the potential for tightening, they said they would ask that market volatility after having a zero interest rate policy for six years. this has basically been something they've talked about and expected. you go to janet yellen's comments and bill dudley's

comments, and it shouldn't be a surprise. do we go to another rate from here, or do we see volatility dry up? matt: do you think we are putting a bottom? michael: i don't think we put in a bottom. it is shifting fundamentals. earnings peak a year ago. was compounding gains in height -- the high teens. which means, maybe resealing gains the future and i need some consolidation. -- maybe we were stealing gain from the future and we need some matt: consolidation. but what if it is volatile -- but we need some consolidation. we are still not down below 25. we haven't been at this height since the 2011 correction. we have volatility that is still on.

michael: but if you look at that chart, you will also notice that most of the episodes and fairly quickly. -- like volatility in in 2011, i would expect the fed to move and not just remain patient. vicks -- vixin the have not lasted more than five days, but this one has. what i, client is, if the s&p 500 is above 1900, odds are the vixwill be lower -- the will be lower and the fed is going to tighten. michael, i want to go back to this issue of the consumer discretionary play. i did a chart in the bloomberg the xl why,king at

the s&p consumer. michael: the reason i -- pimm: the reason i do these you have to go all the way back to october 2 so find that support. if this is really the worst that is going to happen, why wouldn't you buy into this? michael: this is a fantastic example of the market, because the two key drivers in that chart are two stocks, amazon -- pimm: exactly. michael: we have this narrowing of the market. the leadership became apple, netflix, amazon -- pimm: facebook. michael: right, facebook stepped in. when you see that narrow relationship, you see the same thing in 2007 where it was google, research in motion, which was blackberry, and apple, and a handful of names.

what you are seeing in these rolling corrections as markets peak or go through consolidation phases where people rollout the sectors and groups that have weakened. for example, everyone started rolling out of energy last year. pimm: we were just looking at moran.r freeportmac worth a look? michael: it depends on the question. i'm not a single stock person, so i cannot opine on that. about -- people talk about a stock pickers market. s&p 500 gains,se so we have not had a post crisis era. we will get to that environment going forward. pimm: i want to thank you for sharing your insights with us. michael o'rourke of jones trading. matt: the s&p is still trading at 25 times earnings. pimm: but i always look at the

list of new lows every day. tune in tomorrow. we will continue our discussion with the federal reserve potential moves. we have an interview with alan greenspan at 1 p.m. eastern. and still ahead, speaking with the legendary investor warren buffett. matt: he is at a manhattan steakhouse, of course, for his annual charity lunch. bigill tell you forked over bucks to get the opportunity to share a meal with warren buffett. ♪

pimm: this is the bloomberg market day. i'm pimm fox. matt: i'm matt miller.

let's get to julie hyman. julie: as matt riley pointed out, we are's -- as matt rightly pointed out, we are still down on the s&p. the dow earlier was up as much as 330 points. it has pared back to some degree. the nasdaq is positive on the year, but has been bouncing back-and-forth edited in recent weeks. some of the best performers today, particularly in the azerbaijan hundred, tycho energy s&p 500,ularly in the o energy, its biggest one-day about 24%.f 1 -- of the company is waiting in -- wading in at a time that is somewhat tough for other energ

ies. going back about 10 years, the acquisition activity in the utility industry -- you can see this is just for the u.s. and there are a number of high-profile rejections this year. most recently, exelon's acquisition of pepco was blocked. we will see what happens with this one. some of the analysts we spoke to have seen the prospects a bit more positive, in part because canadian acquisitions have been a bit more hands-off. in terms of the other top performers, e*trade is one of them. the company's restructuring its balance sheet to get rid of $440 billion of wholesale funding obligations. it will take a charge as a arelt, but investors

showing it on the balance sheet and shares are up by about 8%. and microsoft is bringing up its lower end of revenue and profit forecast for fiscal second-quarter. but also talking about its update to its acquisition of micro. mike krell -- micro. those shares were up about 8%. hyman,xperiment, julie from the newsroom. supporters are holding a rally this afternoon for the kentucky official who is in jail for refusing marriage licenses for same-sex couples. kim davis has been behind bars last thursday fortifying the order-- for defying the from a federal judge.

today she's getting a visit from mike huckabee. cruz,r gop candidate, ted will see her later today. and baltimore officials have a two point $4 million settlement for the family of freddie gray. he is the man who died while in police custody in april. setting the stage for riots, arson, and looting. officers still face criminal charges in connection with his debt. they have all pleaded not guilty. that is a look at some of the top stories at this hour. much more coming up on the bloomberg market day. ♪

pimm: private equity firm terra firma is standing a firm hand. king ase hired justin vice-chairman. he explained what the king

brings to the table. >> investors have been saying that what they wanted was a private equity firm to demonstrate how they had value. what they were saying to terra firma was that they wanted the best terra firma, not just the average terra firma. i think justin will enable us to be the best and that is important. >> give us a sense of -- you made the announcement today. give us a sense of what the next few months look like. there's a television you may be feeling in the business as a result of justin joining. some exit indone the last couple of years and we will accelerate those. one thing that justin will bring is that he will give a clear roadmap to any buyer of how they can create value. at the end of the day, it will be their decision what they want followed come up and that will

help. and in terms of new deals, it makes an enormous difference when you go out there and you can speak to a seller in the language of that business as an operator. it is really important. sell a business to a private equity firm, that is easy. there are milling out there. which private equity firm you want to talk to, that is important. >> your market testing an increase in -- you are markets have seen an increase in turbulence in the last few weeks. what do you make of the landscape at the moment? guy: it is probably the most difficult investment landscape it -- that i've seen my lifetime. that means there are opportunities. but those are quite short term. you have to grab them and be able to execute them very quickly. i don't think anyone feels incredibly certain. the people who are bears, at the

end of the day it has been very expensive to be a bear for the past seven years. thator those who realize the reason they are there and successful, it's because of cheap money, and as that she money goes, it will be like a balloon bursting. it is an uncomfortable situation to be an. but the good news about that is, alternatives to have more opportunity to add value than the traditional markets. as always you have the right people to do that, you can make money. but you have to be reasonably quick. we seeing opportunities in the past six months that we have liked, but we haven't felt completely comfortable on the operational case. bringing someone like justin in means we can make those operational decisions much quicker. ♪

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call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. matt: welcome back. i'm matt miller. i want to give you some of the top stories crossing the terminal at the south.

president obama has enough support to keep republicans from vetoing the iran deal. senators threw their support behind a deal today. but west virginia's democratic senator, joe manchin, says he will vote against an. -- against it. he is the fourth democrat to be against the accord. it is the first bit of business as congress returns to work today. ick cheney is highly critical of the agreement and the white house is firing back. cheney spoke this moment -- this morning in washington. mr. cheney: i know that no nation in history has agreed to own destruction. what president obama is asking the u.s. congress to do is unique, historically and dangerously unique. the results could well be catastrophic. matt: the white house responded

by posting a campaign style past aontage of cheney's myth about the iraq war. the video says cheney is wrong is wrong now, and is likely more amusing than dick cheney's speech itself. representative nancy pelosi of california spoke to bloomberg about hillary clinton. she says the issue of her e-mail server is being overblown. ms. pelosi: i feel very she did not send any .ail that was not classified i do think the other side is trying to make something of it. matt: clinton told the associated press she has nothing to apologize for about her use of the private e-mail server. first everi's performances in china have been shot through the american

rockers were set to play shanghai and beijing this month, but the shows were canceled because the band used a backdrop image of the dalai lama in a taiwan show in 2010. rock band have been nixed after demonstrating support for the tibetan leader. coming up, lots of volatility in china and around the world. that doesn't stop the ceo of under armour. we will hear why he is playing -- planning a big expansion into china. unveiling the newest iphone and other products tomorrow. and now, a look at the european market close. here is mark barton from london. rose, andpean stocks .t's the fourth day

this after falling as much as 2.2%. import anhe week expert data. by the way, today is the four-week anniversary of you want to elevation -- the yuan dividing ration. some encouraging data from the eurozone. gdp in the second quarter rose .4% from .3%. the data comes a week after the anddowngraded its inflation growth forecast because of a slowdown in china and other emerging markets. let's have a look at some of the big movers across the european equity space on this tuesday session. hamlin the biggest gainer. if the biggest game ever.

it is an insurer on the voice market and has been bought by nad insurances holdings. a bullish estimation of copper demand. 1.4%.so, up by ge winning approval to buy most removingergy business, itsg hurdle to reshape manufacturing business. the industry groups that rose on this tuesday session, every single one finishing the day higher. back to you. u.s., we here in the were reported in the past few weeks housing related data is firming as the economy recovers. home sales are stronger than they have been the -- been since even before the financial crisis. the same can be set for home

prices. but does this mask concerning real estate, such as access to finances? with me is vickie shift, managing partner at mosaic, and lori hocks, president and coo of american residential properties. it is a pleasure to have both of you here. it is great to have you kick it off. as far as residential prices, we have seen a real comeback. but i've heard some people lately using the word "double" bubble" in certain areas around new york, washington dc toyou don't have access financing in the lower third or the lower two quintiles, it is tough. what do you think? thathe coasts are those have moved up the farthest the fastest, but across the united

states there is still a lot of room to grow. if you look at the peak versus , we -- where we are today are still below it. it is probably 10% or more below the markets from the peak. if youou are saying average out the nation, then prices are still 10% below what they were at the peak. aurie: and some are even further below that. commercial isming the same way, vicki. office space in manhattan, san francisco, palo alto, it's more expensive than somewhere in the middle of alabama. vicky: we are hitting peak prices in the market. some investors are looking for safety. certain parts of los angeles are still under peak, but los angeles and new york and san francisco are approaching peak. the cap rates are very low right

now because of the cost of capital. matt: any concern of a bubble in commercial real estate? vicky: in certain markets you have to look at the behavior of office tenant and the need for certain behavior over time. there are certain asset classes we don't include recover, but i think there is some reason to be concerned. matt: having zero interest rates. and financing not as difficult for certain businesses as it has been in the past few years for, let's say, millennials. they don't necessarily have a down payment and for the most part you have to have a down payment, and they don't necessarily have the credit rating. is that why we are seeing a big shift to rentals as opposed to ownership? laurie: it has been a shift from the financial crisis to now.

people needed homes and they could not qualify under any circumstances. shift there is more of a where you are seeing people who prefer to rent. are those, between the millennials, those that have the kit -- the credit capability to buy, and they are choosing not to. but it is not just a millennials. it is a growing class of americans who rather like, we people whoo like the come in and fix their homes, they don't have to pay taxes, insurance, and they expect the homes to be maintained. and they like the lifestyle. as quoting someone from hud, they sent from an educational point of view, people are accessing better school systems where they can rent versus where they can actually buy. matt: a good point, because you don't have to pay the massive affluentt you do in an community in westchester or

someplace like that, and you can still send your kids to school. urie: a down payment is still up to $5,000 on a home. middle america has savings about $5,000. that would only buy them a house of somewhere between $100,000 up to $120,000. are repriceds that in very good school systems that are literally in communities they couldn't afford unless they were willing to spend about $250,000. matt: these are issues you do not have to deal with. you are focused on commercial real estate. aurie, you are focused on residential. what do you have to talk about?

vicki: we are a non-bank lender. we are making loans at levels from dollar one of two dollars 70 on- up to dollar commercial real estate. but things cannot move quickly enough to get to the level where we are. estate is commercial fairly robust right now for private lenders. and we have talked about that in the past right now, how the lenders have responded to that. longe: if it were not for -- non-bank lending, both from where vicky is coming from as well as we are, it has been private equity and for the most part, a lot more recent entries from the securitization market, which is real. but there has been financing from non-bank elements relative

to the sources of capital. that is very real. value-add on aa risk adjustment basis, and incredible return on a hard assets. for those of us that no real estate well, we don't get is near the risk that others would have to take in a private equity play. matt: it is definitely something we hear about on a day-to-day basis and increasing amount. in a wholending, bunch of different industries, seems to be picking up. and the big banks are willing to let that business go. do you have issues dealing with regulators? laurie: i think we are pioneers in this space. our team has a more than $30 billion track record in lending. the way we can react and the levels we can get to, the banks cannot get to it because of the regulatory environment, because of dodd-frank.

banks at times because we sell pieces of notes that we originate to banks. they could take three months to four months ago get a commercial real estate loan done, where we could take two weeks if needed. times, the levels on the construction site, banks are still only about one third of what they were at the beak of the market. and the mortgage rates have filled in some of that with around $30 billion of lending capacity. we don't see that going away at all. we see that growing. matt: one quick question before we had to break. do you worry that down payment can still be as low as 3% to 5%? because that seems pretty tight in certain markets. you could see prices move faster than that. e: homeownership is declining, 52% in recent years and i would say it is going further.

that is not a bad thing. we made the last batch of homeowners into homeowners because of loose credit standards and we burden them with financial response believes they were not ready for. but if we can provide an alternative that is no longer considered second-class, trust the tracks -- across the tracks, the wrong way, then there is an area that could consider a rental situation on par with homeownership. we are not just looking at people on the basis of whether they can afford a down payment. matt: thank you both very much. still ahead on the bloomberg dawn, the meet car rolls-royce is calling is sexiest vehicle yet. it will cost you a pretty penny and it may not do too well in china. stay with us. ♪

matt: welcome back. i matt miller. with it to julie hyman for the big -- let's get to julie hyman for the big market story of today. a rebound. is it a part of what we are seeing in terms of market stories. partrebound in stocks is of what we are seeing in the terms of the market stories. right around the 300 level for the dow. bouncing around a little bit, but more or less that level. the nasdaq has turned positive for the year. it is also a broad-based rally if you look at the map on my bloomberg terminal. all three industry groups are higher right now.

energy was only about half -- .5%, but is now of 1%. everything is higher, as evidenced by the green we are seeing on the screen. tech is one of the strongest areas in the market today. we have some upgrades and fundamental news helping them. micron got a couple of upgrades today, one of them from mk them --mkm -- and km partners to a buy. they have a couple of things chips --ncluding 3-d partnerships. also upgraded sandisk and said the country has -- the company has passed execution issues. way, the semi conductor index is down about 17% since

july 1. even though we have seen stocks overall pullback as a group, the semi conductor stocks have pullback more. also, copper is in a late session rally over in china. that is helping copper rebound since china is such a big market for china. also, continuing the rebound up about 30% from its lows. but it is still down 70% in the past 12 months. apparently hired jpmorgan, according to those familiar with the situation, to help it with strategy as carl icahn takes a stake in the firm. and finally, the vix. an uptick in volatility. x is downas the vi today, you can see the big uptick on the chart today. this is the 12th straight is abovehat the vix

25. it has only done this five times since 2011. this is one of the ways you measure it and clearly show the increase we have seen recently. matt: thanks very much, julie hyman. let's take a look at autos. dawn is making her debut. with a new is out model and the company describes it as, quite silly, the sexiest rolls-royce ever built. about whyth the ceo it was rolled out online and not traditionally at a car show. information,d for and to stream information quickly if the world is raising and raising, so we were catering to these demands. our -- number two, our clients are getting younger and younger. there is a lot of use of online decisive -- devices and media

and that stuff. matt: here to talk about this is my friend, mark crumpton, who will be joining me in a bit. mark: i just said, how cool does he look with his salt and pepper hair standing in front of a rol ls? matt: at a company like rolls-royce where the total globally, the ceo has to act as a brand ambassador. he talks personally and has dinner with their biggest buyers. maybe all of their clients, because you have to spend like $500,000 to buy one. "?rk: why the name ,"dawn matt: it's a new age at rolls-royce, and there is a bit of a glamorous party idea. andcan put the top down

watch the sunrise. they are also going toward a female audience. 70% of rolls-royce buyers are men and they want to skew that more towards an egalitarian look, and they want more young buyers. it is built on the race, which would be jake at speeds j. gatsby's if he were around today. the real's talk about estate matt: index. we all want to know more about real estate. i will see you in a few minutes. stay with us. ♪

matt: welcome back. i want to give you a look at some of the top stories we are following at this hour from the

bloomberg terminal. under armour is not fazed by the gyrations in the chinese economy. this boards where company plans to -- the sportswear company plans to open dozens of stores in beijing alone. president.the he is there as part of a tour with athlete steph curry. we opened our first store in 2010. today, we have a few more than 75 stores here in china. alone,month of september roughly a store a day we will be opening. one thing we will be -- we were modernize is that e-commerce plays a bit of a different role. the fact is, one thing we know, this market is incredibly hungry for the under armour brand. -- burning steph curry year here in beijing tonight at 8

p.m. is a big deal. >> out of the competitors get it wrong? >> they get lots of things wrong, but we are more focused on what we are doing right. the pace of our growth, the acceleration, we are a business that closed 21 consecutive quarters of growth. 96% growth last year internationally. 90% of our to have business coming from north america today. we have a lot of room for that growth. china will lead the way. japan is our largest market, but china is not far behind. >> are you concerned about the slowing growth in this country? and discretionary spending is down. quite a term called "no loser talk." whether the market is shrinking

or expanding has no consequence on us. if it is shrinking, and we see ourselves building new markets. and we have no problem taking shares from our competitors. you will continue to csu that. matt: that was the under armour ceo in beijing. coming up, fannie mae's chief talkingt doug duncan the current state of the u.s. housing market, and more, including a new index that will tell you how much your house is really worth. stay with us. ♪

matt: synagogue in san francisco, 1:00 a.m. in hong kong. mark: this is the "bloomberg market day."

as italy rise in hong kong boosts -- matt: we get a preview of that announcement. what nancy pelosi says about the impact of the tech boom on living and working conditions in silicon valley. ♪ matt: good afternoon. i'm matt miller. mark: i'm mark crumpton. we hope you enjoyed your holiday weekend. let's begin with a look at the market. shanghai, -- ain late day rally in shanghai lifting stocks. gold riel -- rebounding. is higher, the broader market is up right now

1.6%. the same for the dow industrial. all 30 sectors are up. the dow is up 293 points. the nasdaq is turned positive for the year. at 4771. i mentioned the shanghai composite. lookings apparently past trade data showing china's exports fell last month. of 2.3% toom a loss a gain of 2.9%. let's check oil. brent crude is having its best gain since august 31. at 4897..8% the nymex crude on the other hand is down 1.6% at 4528. matt: a technical point. it's interesting when you go back and look at the crude contracts. because yesterday was a holiday, we didn't have a settlement from the nymex. there was still trading of contracts. yesterday's activity is putting today's activity, which is why was see a red arrow with nymex crude but a green arrow on the

red. gold is trading a three-week low. but gold is turning positive right now, up just over .1%. gold has been fairly erratic. the bond market may be the smarter money. you can see there is a little bit of a selloff because obviously, yields rise when the price of bonds go down. across the curve, the 2-year note yielding 73 basis points. the 10 year yield revealing 2.19%, the 30 year yielding 2.97%. holding under 3%. the euro and the pound sterling gaining against the u.s. dollar. we've seen so much dollar strength recently that you get a little respite here on equity prices when they rebound. let's take a look at the top stories of this hour. president obama has enough votes

to block senate republicans from passing a resolution against the iran deal. senators aretic joining him anyway. richard blumenthal, gary peters, and ron wyden threw their support behind the deal this morning. you still have holdouts. west virginia's democratic senators says he will vote against it area he is the fourth democrat to oppose the international accord. the deal have the necessary votes in the senate to sustain the presidential veto. for price president dick cheney is blasting the deal. he spoke this morning in washington. >> i know of no nation in history that has agreed to guarantee that the means of its own destruction will be in the hands of another nation. particularly one that is hostile. what president obama is asking the united it's congress to do is unique. historically, and dangerously unique. the results could well be catastrophic. matt: the white house responded by posting a video montage of

cheney's statements about the iraq war. the video says cheney was wrong then, and wrong now. the iran deal is the first order of business as congress returns to work today. it is agency says mounting a worldwide campaign for equal pay for women. the leader of the u.n. women's agency says a female employment matched male employment or capita gdp would rise 19% in southeast asia and 27% in the middle east and north africa, on average, women in asia make about 30% less than their male counterparts. betty: --mark: it's a deal that will create the largest network affiliate in united states. the deal is valued at nearly $2.5 billion in stock and cash. the new company will be called meredith media general. it will be headed by meredith ceo. microsoft is teaming up with dell to jump start sales of its surface tablet. dell will sell and provide support for the surface in an

attempt to get more big companies to buy the devices. microsoft has just a fraction of the tablet market. matt: the number of mobile internet startups valued at more than $1 billion, also known in a ,liché that i hate as unicorns has jumped by one third in just eight months. that's bad news for some venture capitalists looking to cast in early. investors are logging onto mobile internet startups as more services became available via smartphone. last year alone climb up global media data traffic was almost 30 times the size of the entire global internet in 2000. intra-capitalist may have to wait longer to recoup their investments. antitrust regulators in the u.s. and europe have approved general electric's $17 billion acquisition of a power business. assets to getll the deal to go through. jeff hamilton trying to return its company to its industrial roots.

mark: president obama knows that a playground. the president referred to the new england patriot quarterback tom brady, who is four-game suspension was lifted by a federal judge. president obama: even brady is happy that he has a union. they had his back. brady needs a union, we definitely need unions. [laughter] mark: the nfl players association filed suit to have that suspension overturned. that's a look at some of the top stories we are following at this hour. coming up in the next half hour of the "bloomberg market day," the iran nuclear deal will be at the top of the agenda as congress returns to work today. congressoughts from woman nancy pelosi, leader of the house democrats. matt: we hear from warren buffett as well. he has been eating lunch with the winner of his charity auction here in new york. at a prominent steakhouse. we will bring you that interview live. fannie mae is out with a

new index designed to measure the sentiment of americans when it comes to buying a home. matt: joining us is douglas duncan, chief economist at fannie mae. he's going to tell us more about the index and why fannie mae created a. you just released at this morning. it you have been collecting data for years, obviously. this index will go back about four years. survey 1000 houses a month. we are trying to get to their attitudes about housing. if you think about the 100 questions we ask, each month we have 100,000 data points. we are trying to figure out a way that we could boil out of that the directional indicators for the housing sector. forward, looking because so many of the indicators are back towards looking. mark: does the volume give you an advantage that other indices might not have? doug: we think it does. we think it meets all the scientific criteria, the

michigan consumer sentiment survey or something like that. all of that information is available for the public to assess. focus has specifically a on housing because of who we are. specifically on purchasing a home as opposed to refinancing an existing mortgage. it's based off of six questions really. out of the 100 or so that we ask. it turns out they are statistically meaningful. is it a good time to buy a house? is it a good time to sell a house? what do you expect to happen to interest rates in the next 12 months, and home prices in the next 12 months? are you worried about the stability of your employment for the next 12 months? and i've forgotten the fifth element. it turns out, is highly correlated with four things. the volume of mortgage reclamation's. the level of home sales. -- level of single-family

housing starts, and with happening with housing prices. all of which are meaningful indicators in the housing market. we took the same data out of the michigan sentiment survey, similar data, constructed an index from that, and put it next to ours. hours forecasts what's coming better. matt: what is the outlook going forward? doug: year-over-year, we are still up to the means housing is expected to be stronger for the next 12 months that it was for the last 12 months. months, it last two declined marginally, which suggests going into the fall housing is not going to turn negative, it won't be as strong as it has been. matt: it's very regional. the housing picture is different, for example, in short hills, new jersey then it is in tuscaloosa, alabama. this is a national indicator.

we survey people from all over the country. there is representation of all of the country. but it is a national index. mark: you mentioned interest rates, the fed will be meeting this month to read the consensus earlier this year was that the fed will move on interest rates. but the recent volatility in the markets that some say was spurred by china may have policymakers rethinking that. what did the respondents tell you about their thoughts on when interest rates might rise? doug: one of the reasons of the index is slowed or turned down slightly is because interest rates are at a significant component of that index. they expect interest rates to go up, there's been lots of discussion of the central bank and when it will actually start to raise rates. that would be viewed as a negative from their perspective, especially considering affordability issues. respondents the view affordability issues? we hearing some talk of bubbles in certain regions. the new york area, in the

washington dc area is farcical family homes are concerned. they expect house prices to rise. --doug: they expect house prices to rise, and rinse to rise. there is actually been a shift in the rent own, and it varies from market to market. which actually advantages the ownership part of the market. mark: weirdest fannie mae stand right now, seven years after the sub rhyme crisis? -- subprime crisis? doug: we are still in conservatorship. it takes a lot of be passed to get us out of conservatorship. with regard to the money that was invested from the treasury department, we have repaid more money than what was originally invested in us. in orderquires a law for us to be released back into the private market.

from an operational perspective, the quality of the loans that we have in the portfolio that we ensure is the highest it's ever been in recent times. the link with season foreclosures are way down. we have been profitable now for some time. from a net income perspective. but for us to go back into the private market, as i said, requires legislation. matt: what is the situation with the quality the loans? you say it's the highest they have ever been. are the lending standards still incredible tight from your perspective? are you taking real down payments only? or are you still allowing low to no down payments? doug: we have a variety of offerings. nearly, credit standards of these. on loans that are insured have risen, and credit scores have declined. are they back to where they were in 2004 2005?

no. i don't agree want to go there, given what we know about what happened to those loans. 97%ave made available a value loan, but it's underwritten to standards which don't raise the risk of significant performance issues in that space. what we are seeing within lenders, an addition to serving consumers, to see if their interests massed -- match with lenders. there are some differences. consumers are telling us is easier to get credit then lenders are telling us. i think it's partly because the lenders are accountable for doing all of the documentation. in the consumers just have to provide the data. so is some mismatch in that circumstance. from aasked the lenders, credit tightness perspective, are you putting overlays on the rules we have very about 40% of them still are.

are easing those additional credit requirements, but they are still putting them above what our requirements are. mark: if people want more information about the new index, where do they go? you can go to fannie mae.com. douglas duncan, fannie mae chief economist, joining us in studio. matt: still ahead on the "bloomberg market day," we are watching the markets move higher. we will tell you about the top members of the day when "bloomberg market day," continues. ♪

matt: welcome back to the

"bloomberg market day." i'm matt miller with mark crumpton. mark: julie hyman is a look at the markets. the cyclical it's going on with the major averages with a rally that's been underway since the start of trading. we were off yesterday, but china's rally overnight seems to have spurred a rally in the u.s.. not regrouping last weeks losses, but still making up for much of friday's loss on the major averages. one of the groups i wanted to focus on that's doing well today is the biotech group. if you look at the biotech index, we are seeing a rally there of about 2.3%. just for context, take a look at my terminal. we sought nearly enter a bear market from highs to lows of the year. the pullback here is almost 19%. much deeper than what we saw in the major averages. now the decline from peak to trough or peak to today is

looking more like 13%. it's recoup some of the losses. but like so many of the groups, the momentum groups we've watched, this is a group that has done very well over the long term. this goes all the way back to the beginning of 2002. we saw the bottom there in 2002. since then, the index is up about 800%. obviously the gains of accelerated more over the past couple of years. that 90% drop we are seeing more recently is coming on the back of some stellar outperformance over the past several years. in terms of individual movers we watching within this group today, and within drugmakers more broadly, take a look at mylan, the solder with peridot is continuing. mylan said it's going to begin its hostile takeover for perry go, taking the offer directly to $27.1 billion. it values peridot at 185. we will see what the

receptiveness of shareholders will be come next week when that offer does begin. the shares are not moving that much today. the saga has been going on for a little while now. i also wanted to look at jenna ron and amgen. we saw amgen raised to a neutral. this is on a drug that they are developing in a partnership, which is a cholesterol drug. is underestimating the potential of this particular into theand its sale and of the year. the potential will be the low expectations of market participants. you can see both of the shares are trading considerably higher today. mark: julie hyman, thank you. matt: to the top stories we are following. the kentucky clerk jailed for refusing to issue same-sex marriage licenses is being released. kim davis has been behind bars on a contempt of court charge

since thursday. the federal judge has ordered her not to interfere with the issuance of same-sex marriage licenses. mark: now may be the cheapest time in six years to buy for investors looking to get a piece of shell. they want to bet on a $70 billion agreement by europe's largest oil and gas company to buy bg group going through. according to data compiled by bloomberg, the oil price slide is sweetening the offer premium for bg. it's trading at a price equivalent of just under $22 for shall be shares. the latest valuation since 2009. matt: verizon is making a run a millennials. it will unveil a free ad supported mobile streaming video service. it's aimed at 18 to 34-year-olds. verizon says 70% of that age group watches videos on mobile first. that's a look at the top stories. mark: coming up on the "bloomberg market day," apple takes the wraps off its latest

iphone tomorrow. matt: we have some hints about what these phones will look like. stay with us for the details. ♪

mark: welcome back to the "bloomberg market day." i am mark crumpton with matt miller. apple holds an event in september where it unveils a new iphone and new products. it takes place tomorrow in san francisco. matt: cory johnson joins us from san francisco. found some you have details out, or at least, some possible details about the new phones dimensions. what are they? here is toe blog is be believed, and they've been pretty accurate, we are

expecting an upgrade on the iphone, from the six and six plus to a success and success plus. chips, better cameras, better lge connections. that's the big announcement they have been spending weeks preparing for at the bill graham auditorium in san francisco. they have been spending a lot of time suggesting that maybe there is more going on was siri, maybe there will be an apple tv that might be siri empowered, to the point like the amazon product on the market where you yell to your remote control, hey, siri and it will power up siri is a way to guide through your television experience or your apple tv device. that device has been on the market for many years, and hasn't had a significant up rate in three years. this is more likely to be an upgrade event that a new product event. mark: the product cycle for apple is about a year and a half, two years.

changes we are going to see are more like refinements as opposed to big changes? cory: we are guessing. your question is a reasonable one, even though you are asking a, mark. [laughter] cory: did i say that out loud? is a lot of love. samsung seems to have the upper edge with 18 months product cycles. what we have seen from apple is the sometimes the 24 month cycle is better than a shorter one. they can do more with the time. the interim product announcement , it'sn they add the s meant for less been for the buck. this is important to pay attention to. one of the things i will be listing for the most tomorrow is not just what the product is, but where it is going to be released. under steve jobs, the plan was reduced the product of the united states, and other

geographies, and see what demand -- supply says. what we saw with the most recent iphone was in the entirely different. the most recent iphone, the six of the six plus were released in the u.s. and china simultaneously. it's the chinese upgrade cycle that led to the biggest quarter apple's ever seen with the new six and six plus. it's a one-time item. with a launch in china with the new product last time. now they have to beat those on a year-to-year basis. that's a much more difficult problem to manage. matt: we are just excited. i'm still excited, but i'm prepared to be disappointed. mark: cory johnson. thank you. stay with us. "bloomberg market day." continues in just a moment. ♪ we live in a pick and choose world.

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lot on theire a plate as they come back from the holiday recess. we will get to that later on. let's go straight to the top headlines at this hour. pilots in germany resume their strike today. action has forced the airline to cut half of its intercontinental flights. lufthansa eyelids have staged a dozen walkouts in the last year and a half read they are unhappy over cost cuts. the european union is coming up with a plan to deal with the biggest refugee crisis since world war ii. will him feel -- theil the details great best way to handle the crisis is for all countries to take and refugees. germany has taken the bulk of migrants, he wants the rest of europe to do their share. >> we can handle the accommodation and integration of 800,000 refugees this year here in germany. but it is clear that it can't be repeated every year. when you do different european asylum policy. sweden, austria, and

can't be the only countries that participate in a, aiding refugees. mark: the german chancellor angela merkel says they will spend $7 billion more on refugees next year. baltimore officials have reached a $6.4 million settlement with the family of freddie gray. gray died in april from a neck injury he suffered while in police custody. the city erupted into riots in chaos after his death. the settlement will be paid out over two years, and it's expected to be approved tomorrow by the city spending panel. last week on the judge ruled that the six police officers charged in grace death and arrest would be tried separately. the judge will decide this week if those trials will be held in baltimore, or moved to another location. of a deadlyvivor ambush on live tv is out of the hospital. vicki gardner is now back home with her family. gardner, local chamber of commerce official is being interviewed during the local newscast, when gunfire rocked it.

ever -- adam ward alison parker died from gunshot to the head and body. the gunman died of self-inflicted wounds. those are your top stories. in the next half hour of the "bloomberg market day," we look ahead to next weeks highly anticipated federal reserve meeting. the policy makers raise interest rates, or will they wait? we have the latest. the ceo of under armour tells us why he is still bullish on china. he is planning to open dozens of new stores in the country this month alone. much more is coming up. it's back to work for lawmakers on capitol hill. he returned today from their summer recess. there's a lot on the agenda for the u.s. congress. lawmakers will have to tackle the budget debates, an ongoing discussion over iran's nuclear deal. emily chang caught up with house minority leader nancy pelosi in her hometown of san francisco. emily joins us now. emily: i caught up with representative pelosi at the end of vast -- last week at the

premiere of her daughters documentary. it was supposed to be a movie about the rise of tech in san francisco. instead became a scathing critique of rising income inequality in san francisco. nancy pelosi has a lot of strong ties to the tech community. i asked her what should companies like dropbox and twitter -- what more can i do to help with this problem. take a listen. nancy pelosi: i think the tech community is a tremendous advantage to san francisco. it always has been to the bay area. and that job creation, all of that is good for the community. as long as it doesn't change the character of the community. as they are here longer and being part of the community, they been excellent in attracting people and leaving them in a way that will say these are our needs for schools

and other developments in the inner-city. it comes at the same time where there's an income inequality in the country. so is exacerbated here. it can be addressed. emily: you wrote a letter to the pope, talking about some of these issues like minimum wage and hunger. do you think he can move the needle on any issue in particular? nancy pelosi: i hope so. my colleagues have written to his holiness because it is a challenge in our country. franciscoity like san , where success is so rampant and others are challenged, i would think a group today that the jobs in progress that tech community brings here raises the cost of real estate. that is an additional challenge. byneed to address that

increasing the stock of real estate in our city. and making enough of it affordable. emily: you have strong ties to the tech community. the republican party is starting to make inroads in this community. mark zuckerberg posted with chris christie. what do you make of the gop trying to increase their ties? would you do anything to try and stop that? nancy pelosi: people do what they do. i would like to see them be more progressive in congress, and their policies. as far as the tech community is concerned. whether it's tax policy and the tax credit for innovation, whether it's investments in education, or innovation beginning in the classroom. whether it's investments in infrastructure, which are essential to all job growth, including tech job growth, , for in the respect

buyers tech sector is very strong, we are investing in the basic medical research that enables innovation. ,hatever they do politically the one thing i would like them is have a measured interest in the tech and science communities. emily: i also spoke with congresswoman pelosi about the other major issues on the democratic party right now, donald trump. the iran deal, and hillary clinton and her e-mail situation. as we know, hillary's e-mails are currently under review. i asked representative pelosi issue worried at what point does this become an issue for the democratic party. take a listen. pelosi: i have confidence in hillary clinton and her integrity. that shery confident did not receive or send any e-mail that was mark classified.

i do think the other side is trying to make something of it. at this point, councilman pelosi is not expressing any concern about hillary zeno situation. i also got a question about donald trump. mark, what you think about donald trump's appeal of the moment. she said it's not up to me, it's up to republicans to choose their candidate. it is certainly entertaining. she's going to want to be part of the conversation when it becomes about issue and not about someone's personality or someone's hair. is there a sense that the tech community seems to be leaning towards democrats or republicans, or vice versa? emily: we are seeing more republican candidates coming out here to solicit donations. mark zuckerberg, for example, at an event for chris christie at his house. we are seeing some amount of progress by republican candidates making inroads into what has been a democratic stronghold in silicon valley.

people like mark andreessen are supportive of the republican party. it will be interesting to see how that plays out. donors for thege democratic party, people like mark benioff. hillary clinton has been out here number of times during this campaign so far to solicit donations and build those bridges with the tech community. cumbersome pelosi has represented that district for so long. do we get a sense of what her relationship is like with the people of the district, considering she has to fly all the way across the country just to get back and be close to them? emily: i did ask a question about that somehow stronger relationship was with the tech community who specifically issue close to? she said everyone. i know everyone. these are relationships that she has been working on for a number of years. so it will certainly be interesting to see how this particular presidential campaign plays out, given that many

people like herself in the democratic party have very strong ties to san francisco in the community here. mark: emily chang joining us from san francisco. thanks. still ahead on the "bloomberg market day," china's to way over global markets continues. a late rally in shanghai stocks is helping investor sentiment around the world, including the united states. equities are trading higher, along with oil and metals. stay with us, "bloomberg market day," continues in just a moment. ♪

mark: welcome back to the "bloomberg market day." i am mark crumpton in new york. julie hyman is standing by for the markets. julie: we continue to see a solid rally this going on today that's held relatively steady

for much of the session. not quite up high as we've seen, but we've seen the dow around 300 points up for much of the session. the nasdaq is turned positive on the year today. the map on a look at my bloomberg terminal, we've also seen there's been rally,ent brett to the that's all 10 industry groups are higher within the s&p 500, with industrials and materials leading the pack percentagewise. i wanted to look at some of those industrial movers. some of them actually have some headlines today. dover is buying a fuel dispensing unit from european company for 425 million euros. the shares up 5%. ge's acquisition of alston approved by u.s. and european regulars. they are buying part of the company's energy business. that stock is up 4%. textron also participating in that industrials rally. i mentioned materials, the second-best performing group.

the format whereas best-performing stock. the rebound has been spurred by a couple of different things. one is these cutting back sharply on spendings amidst the slumping commodities. secondly, carl icahn to a stake in the company. the news according to people familiar with this plan say it's explore whether strategy should be going forward, giving at icon involvements. also not hurting matters is the fact that copper is rebounding by 5% after the overnight rally in china. china is a big market for copper. although there was also an interesting note today from goldman sachs that said copper can fall an additional 15% by the end of 2016. that's because of what's been going on was supply growth. demand will be enough to make up for that growth in supply. that outlook, however, is not hurting copper today. i wanted to take a quick look at oil. seeing a bit of a differential in oil prices today. , this has to do

with the settlement of these two types of oil. this in london, which did not have a holiday yesterday. this, which did have a holiday. there was some trading into bgi yesterday. electronically. it's comparing to friday's close, not incorporated that trading yesterday. that's why you are seeing this differential today. largely we are seeing something of a rebound in commodities. he saw that with copper as well. that's the reason why do bgi is not participating on the face of it today. mark: julie hyman, thank you. let's take a look at the european markets closed. mark barton has details from london. mark b: european stocks rose for the second day, and private investors are choosing to focus on the rebound in chinese stocks, the shanghai composite closing almost 3% higher after falling as much as 2.2%. ignoring the week china import and next for data -- by the way,

today, the four-week anniversary of the yuan devaluation. since then, the stock has fallen in europe by 10.10%. it points -- that equates to 1.2 trillion euros. there was some encouraging data for the eurozone. gdp in the second quarter rose 5.4% from .3%. driven by exports and consumer spending. the data comes a week after the inflation and its growth because of a slowdown in china. and other emerging markets. let's have a look at some of the big movers across the european equities space on this tuesday session. amlin, the biggest gainer by a country mile. up by 33%. the biggest gain ever. it's an insurer on the lloyd's market. it's being bought by tokyo-based emison a.d. insurance group holdings for $3.5 billion.

is the world's second-biggest minor, giving a bullish assessment to china steel and copper demand, by 2.6%. rate winning1.4% eu approval to buy most of its energy business, removing a crucial hurdle in the plan to reshape itself around its manufacturing units. i just want to finish off with giving you a sense of the industry groups that rose on this tuesday session. every single one finishing the day higher. back to you. mark barton joining us from london. 3.2%.a, the hang seng up the shanghai composite rose about 2.9%. the nikkei is down just over 2.4%. the big story today is fresh economic data from china and japan. in taiwan.is zeb: august exports are down 6% with imports plunging 14%. the data highlights tepid

domestic demand, one reason economists warn beijing may miss the growth targets. new data shows beijing's decision to devalue the currency led to a record decline in for exchange returns. the people's bank of china stepped up efforts to support the yuan. and japan, better-than-expected revised second quarter gdp reports rising inventories, threat to corporate profits. the cabinet office said the economy contracted an annualized pace of 1.2%. from zeb eckert joining us hong kong. the top stories we are following at this hour. the kentucky clerk jailed for reviews to issue same-sex marriage licenses is being released. you're looking at a live shot right now outside the round county courthouse. barsavis had been behind on a contempt of court charge since thursday. the federal judge has ordered her not to interfere with the

issuing of same-sex marriage licenses. on this tuesday, macy's and best buy are in a deal to sell electronics. plans call for shops to open in 10 macy's locations. the space will be staffed by best buy employees and feature samsung equivalent. the companies will test the concept through the holidays. amazon is providing free restaurant deliveries to seattle prime numbers. the online retailers looking to compete with companies like grubhub as americans favored eateries. amazon cerda delivering beer, wine, and spirits to seattle customers two weeks ago. spending a u.s. restaurants and bars over grocery stores for the first time in march. that's a look at the top stories we are following at this hour. still ahead on the "bloomberg market day," terra firma puts a succession plan in place and brings in a high-profile hype. ♪

mark: welcome back to the "bloomberg market day." i am mark crumpton. private equity firm terra firma is expanding a solid hand. the chairman told guy johnson that he is hiring justin king as his vice chairman. he explained what king brings to the table, and what it will mean for his business. is: revit equity today incredibly competitive. -- private equity today is incredibly competitive. what justin brings is two things. on a dealmaking perspective, it brings the ability to be able to make the transformation faster, quicker, and with more certainty. which means returns can be higher, which means you can be more competitive. within terra firma as well, it's important that we have alongside

me a group of people with big personalities, who can both challenge me, and also be complementary. i think thedes right balance of challenge. at the same time, he has skills which i most differently have read hopefully i have skills that art is natural points as well. >> is an expectation that goes in the block soon. is that job number one? guy: we've a very long track record of choosing the right time to sell businesses when they are in great shape with new ownership. i look at whether there are opportunities to improve those businesses before we sell them. i play a part in the decision-making of when we sell them to. about fundraising, does bring this man and make it easier to raise funds? does it change your ability to go to investors and bring them in? i've seen some commentary suggesting that's the case.

guy: investors have been saying that what they wanted was a private equity firm to demonstrate how they add value and create jobs. what they will say to terra firma is we want the best of terra firma, not the average terra firma. i think he will enable us to be the best. i think it's really important. >> that's a yes. guy: yes. it's an emphatic guess. >> there's been some speculation about your future, where you see yourself going. does bring justin in providing opportunity for one in, one out? guy: it's not part of my exit strategy. it helps in terms of long-term development of the business. its adjusting, people talk about succession. i'm only 56 years old. compared with the average of a private equity firm in the u.s., i'm 15 years younger. there's plenty of time. what it does mean is you broaden the bench.

hopefully, having just in there won't just be a question of having just then me. hopefully that will attract other people as well. we can broaden the bench of personalities, attract young people. >> the firm is going to get bigger. guy: the firm will develop. it will develop with justin over the next 10 years. years, i canr 15 talk about an exit strategy. for the moment, the one bit of the business which is not exiting is made. >> you talked about tax being a moral case. equity and that go hand-in-hand? guy: not necessarily. i think the vision of terra firma and guy, i'm very comfortable with that moral position. i been very vocal about the tax tax is the fact that legacy system that provides competitive advantage to those that don't have stores. i always been very vocal about those the run their businesses

in the u.k. but apparently make no profit in the u.k.. when clearly, they do. i think the difference with guys position with terra firma is that he really does. the money that funds the there is alls from around the world. they pay taxes in jurisdictions where they do business. i think that's a moral position to be in. >> the world has seen an increase in turbulence over the last few weeks. it looks like that's going to carry on. what do you make of the landscape at this moment? guy: it's the most difficult investment landscape that existed during my lifetime. what that means is that in terms of private equity, there's opportunities. those opportunities are quite short term. them andy have to grab be able to execute them very quickly. i don't think anyone feels incredibly certain.

at the end of the day, it's been very, very expensive for the last seven years. but the people realize that the reason they are there, and successful is because of cheap money. it cheap money goes, it will be like a balloon bursting. mark: that was guy hands and justin king, speaking with bloomberg's guy johnson. still ahead on the "bloomberg market day," we sit down with the legendary warren buffett. he's in new york today for charity lunch with the highest bidder. that's coming up on the "bloomberg market day." ♪

mark: it's 11:00 in san francisco, and 2:00 a.m. in hong kong. this is the "bloomberg market day." stocks are rising, building on

the overnight rally in chinese shares. >> is a dubious distinction for harvard universities and down. they are the highest paid, yet the endowment at the worst performance of any ivy league school endowment in 2013. mark: volatility in the global market is in stopping the ceo of under armour. we hear why he has laying offense with the biggest pension in china. ♪ mark: good day from bloomberg headquarters in new york. i am mark crumpton with pimm fox. it looks like the shanghai composite was the rising tide that listed all the boats. pimm: the s&p 500 is higher than more than