erik: good morning from bloomberg world headquarters here in midtown manhattan. i'm erik schatzker p we are less than 30 minutes away from the market opening. for u.s. stocks yesterday and is shaping up to be another big day. the dow futures shaping up to be 100 points. of a globalxtension rally that began yesterday and continues overnight. europe right now, this is the stoxx 600 up 2.5 percentage points. overnight in japan, and extraordinary short covering .ally drew the mek 225 up chinese shares also rallied. as investors embraced risk once again, they are shedding their appetite for the safest of all assets, and that would he treasuries.

you will see the 10 year yield up here the 30 year yield ticking over 3% this morning. arefor the top stories we following. europe is being told it is time to act and governments are being urged to take into hundred 60,000 refugees in the middle east. the con and was told it must share the burden. he spoke in france. >> we should remember that your consonant our common history is marked by millions freeing from religious or political persecution. from dictatorship, from the -- oppression. say taking in

refugees would, under the plan, be compulsory. the house begins debate today on the iran nuclear agreement. leaders are fighting on whether voterats should have in a on the deal pair that is enough to block a republican resolution . if they all stick together. to apple devices expected have a body similar to the iphone 6 and the six plus. there will be an upgraded camera and a speedy processor. apple may introduce a larger screened ipad and it probably will be details on apple television as well. news brokebreaking moments ago. puerto rico says it faces a $13 billion debt funding shortfall and that the commonwealth must restructure debt liabilities. it is part of a relief of puerto rico's fiscal growth plan and that all debt service requirements at the moment

cannot be made. puerto rico has about $72 billion of publicly traded debt. it is a lot for a municipal bond issuer. puerto rico simply cannot pay all of its debt. the commonwealth is getting more formal with the release of the economic fiscal growth plan and in the next five years, it has $13 billion it simply cannot pay. time for today passes edition of things to watch. julie hyman, welcome back. i want to start with the chinese economy. concernn it seemed like was perhaps fading, citigroup now says there is a high and rapidly rising risk of a hard landing in china and it puts the odds of a global recession at 65%. moderatence of a global recession. a 15% chance of severe global recession.

a 30% chance of noninflationary gdp growth. here is the outlier -- a 15% an economic boom. all research led by chief research and city talking with mike mccann tom keene earlier, here is what he had to say about this bold call. >> it is a bold view of the challenges facing the world economy. it is important to read it in its totality. what he is talking about here is economies operating below attentional. a little hairsplitting there. you would add a chinese recession two recessions already underway in brazil and russia here that would have unavoidable band --nces for the

four demand. -- for demand. growth is probably more like 4% growth. could be 2.5% growth going forward. one of many people trying to figure out actual growth in china. erik: the reason he is talking about a global recession moderate or severe is that the developed world economy simply is not strong enough to withstand that pressure. it is not exactly the way it played out in 1997 and 1998. but this would be an emerging markets led crisis. julie: he did say a 90% chance that greece would leave the eurozone. say he is wrong now, but, you know. i wake up one morning feeling one way about economist's and i wake up the next feeling differently. i love when they make bold calls

one day and then we decide if they're getting it wrong. alibaba spinoff could be in trouble and it is coming off criticism. the company requested irs approval for its spinoff plan and then yesterday, it withdrew that request and it was not very clear in its statement whether the spinoff will go forward its plan or not at all. market seems encouraged yahoo! will attempt some kind of spinoff structure. the stock has mostly recovered big losses in late trading but it is still down. most analysts commentary i have -- notis morning overwhelmingly negative, i should say. it is not clear what will happen now. yahoo! is in a similar position because it does not have the legal cover it was looking for from the irs and now

it has to counsel lawyers when deciding whether to go forward with the spinoff, another version of the spinoff, or perhaps not at all, which would be a huge blow to many investors pressing her sue myrick to do something. pointing out that excitement over the possibility of the spinoff has been fading. alibaba shares hit their peak last november, this is the tale. alibaba versus yahoo!. yahoo! has outperformed alibaba. them have done poorly. it is not so fantastic. that is the whole problem. buying yahoo! for alibaba. want to get rid of alibaba, .owever they do it is because itry

conveniently masks all types of problems. people do the math. a tale of money can let's talk about the private equity investor who raised more than $3 billion from china's's sovereign wealth fund to buy the stress banks. he is giving most of the money back and i say kudos for saying no and and supply -- exercising discipline. let's not forget he raised the money in 2008. if chris flowers, who has an eye for stress banks, made a killing , arguably one of the most successful private equity financial services company deal of all time, if he could not find opportunities in the immediate aftermath of the , i'm talking about goldman sachs and not just citigroup, dropping in the mid-single digits, who is going to be more successful than chris

flowers has been? you have tens of billions of dollars of money raised mostly by private equities, to buy the stressed bank assets in europe. how will that money be put to work? with this up when? -- with discipline? i have questions about this particular situation. how are the conversations going between him and the chinese sovereign wealth? how are the conversations going where he is saying, i do not have any place to put the money. does he still collect fees as well? ok, well. there you go. speaking of investing your money, not owning apple has long been the most painful mistake for equity fund managers. titleholder a new in the perennial stock contest.

amazon, if you look at the chart, has compelled the s&p 500 in terms of its weight and percentage gain more than any other stock. more than netflix. netflix is not heavily weighted. did not make the list. it is fascinating, this switch. things could change by the end of the year. especially on a very today when you will hear from apple. the stock does not tend to do spectacularly well. erik: i'm going to move on to number five. this is our top corporate story of the morning. a corruption probe replacing united ceo. at chief operating officer csx. this raises all kinds of the questions about leadership

strategies. and whether backroom deals like this or the ones alleged to have taken place in the politically sensitive as miss of air transportation. george hamilton is president of hamilton consulting. george, i think the simplest place to start is, what went through your mind when you saw jeff was being forced out of united? george: why. when i learned the reasons behind it, i said, that is a place we do not want to be in. erik: nobody wants to know ceo and no employee of any company. i am assuming you heard a little bit, at least, of what was alleged to have taken place between united, the port

authority of new jersey, and the former chairman. in your experience, is this enough to warrant effectively the ceo? it all amounts to the same ring. i did not know a thing about this until i read the account that came out starting yesterday afternoon like most other people did. to, are youown involved in commercial bribery. it sounds like united's board wants to be as far apart from that as they could possibly be and has been pretty jerk own in about this. had we heard about something like this ever happening before at least in modern history, where you get this kind of bribery, particularly in the united states? george: i have not. have been involved obviously at a much lower level, airports, soliciting new service from

airlines. i have not run across this even anecdotally. there is an old story and airline history about the agendary chairman who had resort hotel in the bahamas extending one of the flights down there. that is done internally by the ceo. erik: you can understand if not condone the temptation for a guy to do certain favors for a guy running port authority, if you are wanting the port authority to make improvements. now, if we could so focus on what this means for united united's shares versus delta versus american airlines since america came out of bankruptcy

and before it completed a merger with u.s. airways. you can see it is underperforming and it measures up against complaints people -- flyers that are getting out of america and delta. without its ceo now that united is running by the railroad guy, what does this mean? it is a pretty diverse set of experiences mr. munoz has. spoken to friends of the railroad industry and nobody says anything bad about him. erik: does that mean he can run united? george: no, but he has worked at another large-scale transportation business and he of the territory. he has not had experience --

there is not a lot of customer service in the sense of people to people in the railroad freight business. he has got a strong fret record. he has been on united floors for years. let's see what the guy does. what kind of trajectory on?-- have they been he has been admired until this happened. so, what does the company do? george: it was the pilots union, they made a positive comment about munoz coming on board. by the end of the day earlier in the segment. between labor and management,

this is a new guy with a brief honeymoon. it would be a cam to see what kind of relationship you can forge with his unionized employees. erik: is that the biggest risk, of deterioration? the post bankruptcy world, it seems peace between the unions and the management has been hallmark. george: the fifth since the merger, that has got to be fixed. things he several will take care of. i would hope he was actively aware of this and has already begun to formulate a strategy to

do something about it. erik: is it possible we could , it gives the company the opportunity to reset, to tackle the things customers have been complaining about lake computer malfunction? george: yes. that itshare the view is underperforming not just on a financial basis and stock performance, but underperforming delta? that was the case. obviously, not approaching 11.ter we have positive feelings about this and it has been a number of years since the merger. erik: thank you for your time, george hamilton, with us from

washington this morning. u.s. stocks are coming off the second-best daily game of the year and futures suggest we will see a higher open. julie hyman is still here with a look at 50 minutes before the opening bell. julie: it is worth taking another look at futures because of the magnitude of the gain we us eating this morning. .% gains we know things can change by the end of the day. another shout out from earlier. volatility. -- so much big huge up days, the gains yesterday were on

lower volume than declines we had seen in the last couple of weeks. in terms of some of the movers, we have got banks to talk about. goldman sachs got an upgrade saying the stock has 20% upside. analysts are saying the third quarter will be tough, potentially, not just for goldman but for the rest of the banks. but that it should hold up well and has a good valuation and a mostly favorable capital markets outlook despite near-term volatility. out the analyst pointing innovation and technology and also a strong risk management. that is goldman sachs and citigroup according to go -- morgan stanley. other u.s. banks including bank of america and cit have the most upside in an interest rate raised case. if you do get this gentle lift off and gradual increase by the fed, a bank like citigroup could do well. if it is a sharper trajectory, morgan stanley, like the asian rate sensitive banks.

at the same time, oppenheimer is out with a note saying citigroup is beat up. but it is a buying opportunity. interesting -- erik: 55% chance of a moderate to severe session. it cannot be good for the most -- al of sticking of international affairs, saying it is high time to act. laid outean president a proposal for tackling the region's migrant prices. on eu governments to take a total of 600,000 refugees come out to specific but carefully avoiding the word quota. hans nichols. have been some

members of the european parliament that do not like the idea of having -- if you have a number and attach it to the country, -- they are saying they want to take what they can from thebear, not european union are the number is massive. this is 160,000, a huge number. it is way too small. only currently in hungary, italy, and greece. it says nothing of the massive influx happening and berlin in then last 24 hours, getting 1000 refugees per day. days, germanyur received 27,000. eye-popping it hard to go down by other member states of the eu but still far too small. unanimitye is their

and consensus along eu governments along what to do about the migrant crisis. the current system is broken. it says you need to register migrants when you come across the border and make a decision. there is zero consensus and a great deal of division in an eu and u.k. division on what to use to replace that. there is a beginning of a difficult process to talk about this and it will only get worse as the numbers continue to grow as more and more migrant work as our crossing come many of them wanting to come to germany. is there any toning down of the rhetoric? i am sure you have noticed the leaders, some of the things they are saying sounds awfully the same as what the world heard back in the 1930's when there was a different migrant crisis.

hans: there has been very little toning down of the rhetoric. erik: thank you very much. still ahead, scarlet fu will join me. stay with us, everybody. ♪

erik: here we are a few minutes from the opening bell in new york city. i am erik schatzker.

scarlet: we will see if it picks up. erik: volume on a huge of day, the second-best day of gains for the s&p 500 this year, much lower than what we saw at the end of august amid all of that selling. scarlet: that is usually the case. you have a lot more trading. that is fairly consistent. .rik: alpine woods capital of markets.e tracy, what is first on your list? tracy: it has to be the rally, specifically nikkei, of more than 7%. it is something of a rally. a lot of people are talking about this and basically just , that a big short squeeze the japanese markets missed out on a rally in europe yesterday.

and this is japan recovering. we have seen a lot of short interest. on your screen's right now is , which you allx have been following closely. volume in that, which spice -- spike yesterday. possibly a lot of people have been using it to short stocks and are now having to scramble to get out of those visions. how much of the rally is sustainable and how much is a technical short greece. -- short squeeze. >> we like japan. if i had to look at what appening yesterday, that is fiscal response, which is great to we have got plenty of monetary responses from japan. that could be a positive or was it an 8% day, i do not know. it could have been the spark

that chased out the shorts. japan has fiscal and monetary paradigm are a huge beneficiary and import all their energy. generally speaking, that is so most a tax cut for them as well. we still like japan. scarlet: has it evolved sufficiently over the last years? >> from a monetary standpoint, exactly. from a fiscalngs standpoint, corporate tax the matter what country it is and, if you get more of a response, that will be the next level. erik: there is a third leg of the stool. the cultural transformation taking place in corporate japan. you have the rise of shareholder activism or suggestive is him. you have boards of public japanese companies responsive in a way that many say never happened before and if it has,

no one has seen it since the mid-1980's. quite cc -- you hear japanese corporate directors. there is cultural change going on there as well. erik: as the bell rings and we wait to see the first print, what is number two? i know you have been talking about one citigroup note out today predicting a global recession. i want to talk about another one slightly under the radar, but it is really interesting. it is the capital markets themselves. bond investors and banks have to fund u.s. shale and they are dictateecisions now to how much capacity out of the shell market. forget opec. just think about the bond market. erik: high yields, effectively

the swing producer. mark: we have been underway energy for over a year and that has in a good move it we are less underweight recently. i am not so sure i agree completely that saudi arabia could move the markets. we are little more constructive. i'm not all in as far as energy is concerned. i think you will have the exact same companies note to their auditor and say, this project that had an 80 or $90,000 cost had to be written down here you will see acquisitions made over the last year's here that will have balance sheet impacts and could have finance impacts as well. there could still be damage to those balance sheets going forward. erik: in some cases, at the very least written down if and only if they could not taper over the problem by issuing more debt or new classes of debt to retire

the stuff. is true.t but if they purchase a company and it was $80 and that was their assumption, the goodwill has to be written down. scarlet: are we in the third inning of that cycle? the eighth inning? mark: it is hard to say. schlumberger by a company that has been $15 million, that is perhaps putting in a bottom third i like to see stuff like that. a smart company. of saudi arabia could cut production. it is the first time we heard that for a long time. i will call it late innings, how about that? erik: let's tell everybody what is happening in u.s. equities. a big opening but not as a gas

futures were suggesting. the s&p 500 up .8%. financials led by 1% and materials and energy companies gaining at the moment. number three, it is over to the u.k. where we just had export numbers showing and 9.2% fall in july. notentioned that city about a global recession possibly tied to china weakness. this is something that could be along that steam. a broad-based drop in exports, which, by the way, is feeding , whichctory production fell on an annual basis for the first time in almost two years thanks to the lower exports. thele say it is evidence of slowdown in china and weakness in the eu, starting to feed into the global economy a bit more. scarlet: you have u.k. gdp

started to falter now after an expansion. did the bank of england weight too long? mark: for hastert you could argue the same thing about the u.s. fed here they may have in their hands are bit tied. it is also a market we are generally positive on. it is one quarter we will continue to monitor. erik: you mean the u.k.. mark: exactly. when you look at -- the total reliance on china is not huge, but to your point, there is a slowdown going. third-quarter gdp will be slower. i do not think it is completely unheard of we saw this morning. we remain positive. looking forward to continuing our conversation, mark. thank you again by two tracy. thank you. we will head over to

julie hyman who has got a look at what is happening. i want to take a look at the overall averages. , theu look at futures gains we are seeing are not as large but close to it as we look at it to day game now. i want to look up on my bloomberg terminal to see when the last time is that we have had a two day game like this. it looks like we saw a bigger today gain at the end of august, as we have had all the volatility over the past weeks. apple is one we should watch .oday you can see the share is not we get underway.

for perspective, 63% of the revenue last quarter came from the iphone alone. 75% of the units sold were for iphone. it says in terms of upgrades and how investors perceive, that is really what .ill be pivotal if there is something new and pricing the company will come -- with, it has already been that could also affect the stock. related to apple, netflix harris shares have fallen for seven straight sessions, the longest losing streak since march of 2014. oppenheimer analyst says the recent weakness in the stock is a buying opportunity. they said there is concern out , to start a competitive it is said however,

that is unlikely, that apple will not get into the content business. i want to come back to alibaba since we have been talking a lot about this story this morning. drawing -- withdrawing its request for clarity on the tax-free spinoff of its alibaba stake. the shares fell quite sharply in after hours after the news came out. alibaba itself is up about 4.5%. erik: thank you very much. still ahead, we are shared some stock picks as well as volatility and the possibility of monetary hiking. stick around. ♪

erik: welcome back. scarlet: we will get this right one of these days. erik: a quick check of some of

the more important headlines at this hour. hillary clinton says the united dates must seize the chance to them from getting atomic weapons. passage of the plan is assured even though a rejection is likely. to ifators say -- enough he vetoes rejecting it. the united nations says guns and fighters from russia are blocking the path of peace spirit almost 18,000 people have been wounded since that conflict started in april. taxes on getting high are going away for a day. , there isal marijuana usually a 10% sales tax.

those are your headlines. scarlet: recovered economic growth is no longer a given. some investors remain cautiously optimistic. with the risk rally we are seeing today, is this a case of the price rally for growth? mark: 22 hours the last 25 largest moves happened when the market is below its moving average. there can be a lot of reasons. you tend to have the short covering like on japan. you tend to get spikes up. i do not necessarily think that is the case. erik: a repricing of valuation. mark: absolutely. economic concerns are big deal if you ask me, even more than the fed here the fed issue now is, 25 basis points and then a --g gated -- an elongated

the global growth issue is really what matters to earnings and valuations across the world. erik: what does it mean for an ifity investor like yourself it is right that there is a 40% chance of a moderate global recession and 15% chance of a severe global recession. however you describe it, it is greater than 50%? mark: it has implications on which stocks to own. you will not want to own energy. you want to go where you will have the least amount of topline risk. what we have done, and we think it is the right strategy for the next couple of months at least, is concentrate on u.s. centric revenue streams. we complain the u.s. economy is not doing as well as it should. employment is up, unemployment is down, things are going pretty well here especially on a relative basis. it makes the most sense to us to keep as much as her assets here.

scarlet: the idea u.s. is decoupled from china, that is not a myth? mark: not necessarily. tofar as x boards, it is 1% china. we manufacture a lot of things that are sold there. fromn decouple to a degree china, yes. i think in a spot like cbs, there are industry things that happened. advertising markets, worried about and unbundling issue. cbs has -- for the bundle. most all of their ad revenue is here in the u.s. and all the revenue in the u.s., that is a stock that has been clobbered buying back 20%.

it raised dividends 25%. we are pretty much fully invested. we have a nominal amount of cash right now. to getd things around out of the industrial area and foreign revenue sources, as i mentioned. underweight in energy, as i mentioned it we do not hedge from a market or futures aces. think thells when we expensive.etting too and we think they are mispriced. erik: we talked about energy before. mark: i think it is a proverbial baby thrown out with the bathwater in the energy world. it is the largest infrastructure company. it is a fallacy to say they have no commodity prices but it is low.

is the largest pipeline paired it moves things around all over the country. it is the largest one. it has up to a 6%. we think it will actually go up. they are bringing natural gas to new england, desperately needed. the other thing i like, since the middle of june, the chairman and the board of directors have declined and bought in the over market in canada morgan stock. they sat there and wrote a check , a pretty positive sign that the management is bullish. in general, they are slated to slow down. richard is buying the stock with his own money. that is a positive. scarlet raises a good

point about buybacks. have you been chasing the buyback frenzy? there are different kinds of buybacks. there are accounting issues we do not want. be on theback should capital, what is the return on where we spend the money? question is how you approach your balance sheet and your allocation of capital. buyback is in that list of things. that is a positive sign in the kind of five back we are looking for. perfect example. it is a poor buyback. thank you so much, mark. erik: a conversation with a man who retooled the u.s. police department as a forced to fight terrorism.

talking about the need for vigilance in the age of isis. that is up next. ♪

erik: welcome back. i'm erik schatzker here with scarlet fu. of scene is what the head of the , atimore unit said yesterday six point $4 million settlement with the family of freddie gray. arounde is one of many the nation that has put a focus around the late -- the relationship of police rhetorices, and the could not be more heated. scarlet: the former police commissioner could add some heat and shed some light on the complex issues of law enforcement. his new book, vigilance, is a memoir of his career. topics of national security. thank you for coming in. aggressiveolicing or

policing. is any part of it justified? >> in terms of police backing off? erik: no, the backlash among cities and communities. you have heard the protest. particularly the murder, truly terrible. walter scott. it appears evidence was planted in a lot of people's minds, this was suspicions confirmed. i do not think that is the case. there are bad everything us out there. it is something that has to be addressed and overcome. we're seeing a backing off on the part of the police from proactive initiatives. erik: what does that mean?

it is not a question new york city is confronting alone or baltimore is confronting alone or ferguson is confronting alone. this confronts every police force in the country. what does it mean from your perspective? will see ans we increase in violent crime. we have seen an increase in the new york times wrote about last week, murders across the country. it is not just a coincidence. holdingresult of police back, if you will. erik: what do you say to community members who complain that stop and frisk involves racial profiling, that broken windows is a philosophy for which there is statistical evidence and proof? ray: i think these things are affected. we've had a significant

reduction in crime in the last few decades. to do withhas smarter policing and proactive policing. when you see this falling back you are going to see, in my judgment, an increase in violence until we level off. that is what is happening, in my view, throughout america. to get to isis, which has had a lot of success in europe, notably the u.k. and france. can the group replicate that model? girl in brooklyn be more vulnerable than the you -- in the u.k.? ray: so much of the radicalization process takes place on the internet. it can have been virtually anywhere. in new york, and individuals totally radicalized and starts rolling bonds to blow up

.eturning servicemen anywhere.e been we like to think here, that we are doing an effective job. it has been said so many times, terrorists only have to be right once and the government has to be right every time. heavy i think the threat will continue for a long time to come. it has been said, fighting grievances and airlines have existed for years. isis is a movement. there are a significant numbers of bodies under the isa umbrella, perhaps as many as 50,000. it is a significant number. but it is very effective on the internet, putting out 90,000

tweets or retweets a day. is it a threat here? yes. i think the movement is a thread here. we have seen a lot of young people choose to kill people in their own countries. i think the fbi has doing an effective job in rolling it up. erik: " is his new book. apple expects to unveil the latest iphone. we will tell you more. ♪ we live in a pick and choose world.

choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number...right now all beds on sale! sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft.

he's more hardcore. so your sleep goes from good to great to wow! only at a sleep number store. don't miss the final days of the biggest sale of the year! with the c2 queen mattress just $599.99. ends sunday! know better sleep with sleep number. scarlet: it isn't in the clock p.m. in tokyo. erik: good morning. scarlet: a shakeup at united. the ceo is out. this is a departure signature a

break in this criminal probe? erik: does netflix need a rereading question mark we will look after seven straight declines. scarlet: we will talk about which performance car is the fastest on wheels and matt miller is so excited for this. scarlet: good wednesday morning. i am scarlet fu. erik: i am erik schatzker. let's show you the financial markets. you probably aware that we have a second leg for the rally. u.s. stocks are trading higher to .8 of 1%. if you measured by the dow jones, up more than 500 points over the space of two days and the dow jones is back in the territory it once occupied on or around august the 28. scarlet: amazing.

if you look at the industry groups, however, it is no longer -- well it is broad-based, but the industry groups are no longer higher. you have utilities down, so more defensive groups. you can see it utilities are down .4 upon percent and staples is another defensive group and health care are up by only .24%. andgy and commodity names related companies are gaining. it is reflecting that in the underlying crisis of copper and those prices. let's move onto treasuries because as stocks rally, treasuries are falling and that means higher yields. the 10 year yield at 2.25%. erik: the 30 year yield is just above 3%. scarlet: that could be at into pressure on treasuries. let's get to currencies because the yen is weakening for the

third day. the first market taking its cue from equities. the dollar yen at 121 13. let's get to top stories crossing the bloomberg terminal. migrant with the crisis. one key leaders said there was a lack of unity in the european union. ahead of the european union urging nations to find a solution by next week. they say every eu nation must take in some of the 160,000 refugees. angela merkel agrees that quick action is needed. >> we need a binding agreement on a binding distribution of refugees, all our states according to fair criteria. they cannot stay the way it is right now. it will be a support if we can't finish -- if we can finish what they're proposing today. torlet: migrants are pointed italy, hungary, and greece, mostly in syria. it is the worst since world war ii. the capitol hill where they are fighting over whether democrats

can prevent an up or down vote on iran's nuclear agreement. 42 democrat support it which is enough to block a disapproval if the democrats stick together. the house begins debating this measure today. erik: real-time political calculus. clinton changed course over her private e-mail server. the democratic presidential hopeful had resisted apologizing for using private e-mail while she was secretary of state. that suddenly changed in an interview with abc news. hillary clinton: as i look back at it now, even though it was allowed, i should have used to accounts. one for personal and one for work-related e-mails. that was a mistake. i am sorry about that. i take responsibility, and i am trying to be as transparent as i possibly can. erik: why did it take so long for her to collect a mistake and apologized? one answer shows several quarrels showed the majority of americans do not find clinton -- several polls showed the majority of americans do not

like clint -- clinton honest and trustworthy. critics say planned parenthood handling the fetal tissue file its and republicans want to cut funding. i could be a sticking point in new spending bills that are needed by october first to keep government agencies open. puerto rico is facing a huge cash crunch. it shows a $13 billion funding shortfall or debt payments over the next five years. that is after spending and revenue enhancements. the euphemism if i ever heard one. it were no evidence of potential losses in the $72 billion. scarlet: as mentioned, a big shakeup at united airlines. jeff smisekna and two other senior officials are out. it has to do with the federal probe of the airlines ties with the chairman port authority of new york and new jersey. the issue at hand -- united start a money-losing flight to the chairman's home in south carolina in exchange for political favors?

united says they are cooperating with investigators. colorado's taxes on getting high are going away for a while. they will not be taxed. tax and asually a 50% 10% sales tax. smokers would save about $20 on a one ounce by, in case you are wondering. those are your top stories. coming up on your next hour, finally here, about three hours, tim cook will announce new apple products. we already know the iphone is coming, are there any surprises in store? erik: there are so few surprises left at an apple product announcement. scarlet: it is kind of a throwback event now. the salsa. plus, the great debate over whether the fed should raise interest rates. heating up, will market volatility produce the rise of a hike? and: the ceo of united authorities probing the airline.

in asian stocks. the shanghai composite climbed moreand hong kong gained than 4% and then the key in tokyo surged the most by 2008, a whopping 7.7% in one single session. scarlet: the founder of analytics things chinese stocks have further to fall despite the recovery. he joins us with his technical analysis. tom, welcome to bloomberg. i know in the past that you have said your indicators work best when you are looking at a government that can heavily canuenced the market and heavily influenced trading. why is that how does it apply here? tom: are indicators are designed market tops and bottoms and it doesn't by calculating or identifying when the last seller has sold at the the last buyer, has bought at the top and conversely at the bottom when

the last seller has sold. we do not look at the market in the context of what most conventional conditions to initiate tops and bottoms. intervenesvernment in the markets, there is a temporary response, particularly when the market is in decline, you get short covering with -- and whats typically is set up as a vacuum where buyers should be reading a market bottom and there is a vacuum and further weakness. that is what happened when we identify the market top in , 5177 in june, we projected down side to 5200 approximately. if the decline lower at 2850 and we were on alert to expect further weakness. the architect for eight days below 3200 and last friday, we came to the determination that there would be another rally in the shanghai mart it. similar tosomething

july. we had been a point rally into a short-term top and we are looking at something around 500 points. we see the shanghai rally to 3390 and china enterprise index rally to 10,900 and another decline. this decline that we are anticipating is something that may be drawn out. we have reviewed -- originally, what we typically like to see a market bottoms is a v bottom. we did research into last week because of that delayed bottom. we just were not seeing every opportunity to market had to break down. every opportunity the market had to break down was -- there was a reaction by some influence, whether it is the government or central banks or whatever. we decided or we look in the market currently, somewhat similar to what we did from august 9 through october 4

11 who.are pretty stubborn despite market generations of 10%, 15%. we were commits we had to go to 1076 on the downside. erik: tom, what is a better stocks?r of chinese isn't that a machine china index , you talked about in an e-mail over the weekend which apparently included me on, always of the shanghai composite? tom: we have always focused on the shanghai composite, but we split the attention more recently in the chinese enterprise index. for one reason being if you look at our historical market tops and bottoms, these are captivated a computer. we have been very successful in identifying the top some bottoms. the only problem is we went the

price object is for tiny models to coincide. 2011 at thed in stock market low in august, we did not have in sync until october 4. it was two months later. the same thing happened in nikkei in 2001, 2002. in september, we met a bottom but it took about three months, four months to make a lower bottom and that is in both were in sync. that is what we see right now. the chinese enterprise index has 8764 ande objective of we just enough to fill. we got as low as 9053, so we are convinced that we will see a rally. andill see a rally to 10500 to 3390 on the shanghai index. we see the markets of voting again similar to what the u.s. we are receiving a cell signal on the u.s. markets now. scarlet: i want to go back to

the shanghai composite because you mentioned and erosion. you have noted we have seen sideways trading in the shanghai composite in the past two weeks. what does that do to the reliability of market indicators? tom: our tiny model is constructed such that you have to make successively lower highs and -- lower closes and higher closes to generate a buyer or so. during as dormant trading range, so it is telling us we have to make lower lows despite what everyone is saying right now. we are convinced somewhat that we would see this rally when published last friday. the fact that too many people were negative. a lot of prominent people were negative. if you look at the context of what the last seller sold, markets just by definition, will move sideways or figuratively speaking will have to move sideways or upside. that is what we see right now. it is market dynamics. scarlet: market dynamics at

work. ceo and founder to market analytics. thank you. tim cooking up, apples takes the stage in a few hours. he is widely expected to show off the new iphone. what does he have up his sleeve? we will take you to san francisco for a look ahead. ♪

scarlet: looking back to bloomberg television. i am scarlet fu. erik schatzker. stocks extended rally to a second day and we are 500 points in the space of two days for the doubt industrial. -- for the dow industrial. julie hyman is keeping a closer eye on the winners and losers. two winners and one of them snapping a significant

losing streak. i'm talking about netflix, shares up 6% and accelerating ever since the opening bell. straightfter seven sessions of declines for netflix, the longest losing streak since march 2014. the catalyst for the rebound seems to be some commentary from oppenheimer analyst jason who says the recent weakness is a buying opportunity and he says there have been concerns that apple would introduce a competing product with original thatnt, but he thinks introduction is unlikely. take a look at my bloomberg terminal. we have netflix for the year to date. up about 100 7%, the best-performing stock in the s&p 500 this year. oneerday, a typical of the hundred day moving average but only spent one day and popped about it today. we will see where it closes out by the end of the session. the other stock is fitbit. was up by 11% and it is extending the gains, up by another 3%.

it is being an issue with outperform rating over spm and you can see it is trading around $36. the company is obviously being a leader in the wearables market. interesting that the chief revenue officer at fitbit made commentary in an interview saying that the smart watches more hype than reality. he said -- the chief revenue officer at fitbit said, consumers are asking, why do i want one? why do i need one? whereas the proposition with the fitbit is more specific, it is for fitness, obviously. if you take a look, the today chart of fitbit, you can see the big advance and look at the short interest and fitbit which explains the dramatic moves we get in the stock. this is the short interest ratio, so 39%, the percentage of shares sold short as percentage of overall flow, 39% which is extra nearly high. that means that when you get an

increase in the stock, you can have a short covering rally that exacerbate the gains that you otherwise might have had. erik: severe case was playing out, julie, from the end until a couple of days ago but it might be getting a little painful with the stock up significantly over the past few days. that is julie hyman. apples september event is upon us. tim cook will introduce new iphones, no doubt, scarlet, why shouldn't he? the most important product that apple sells. as i have been saying, what, if any surprises might tim cook cap? furthermore, at this point, with so much known, what constitutes a surprise? cory johnson is in san francisco and when i say constitute a surprise, i mean a meaningful surprise, not something quirky and interesting. y: i think we will be looking for things on the edges, but the bar is so high for apple. the biggest company but market

capital in the world and arguably selling the most successful product, the ipo, what we expect is an iphone 6s and an iphone 6 plus s, i don't know. but two new iphones, maybe an new ipad, may be demonstration of a new operating system for the watch and an apple tv upgrade for the first time in three years. you are exactly right. the rumor mill has been fairly accurate the last few years and that is sort of the running that right now. they have really raised the bar. if you look at the growth rate of that iphone year-over-year sales, what you see is that with the release of the product in the market right now, six and the six plus of the iphone, they have seen tremendous growth on a year-over-year basis. the bar is really high when you look at comparisons. if the product to be announced today are on the market by october, the fourth calendar quarter, this could be a tough

comparison for apple on a year-over-year basis because the last products or so successful. scarlet: and the bigger iphones, iphone 6 and iphone 6 plus made a big impact, is actually in markets like china. the s cycle of iphones tend to be more profitable than the introduction of a new line. tech about how important that is even though it may not get excited for the fan boys out there. cory: the cost, and components, i initially -- they initially start at a higher cost and get cheaper every day, month, week and quarter. so a year in the cycle of many of the components will be the same, they are just a little bit cheaper and it adds to the already high gross margins. apple reliance on the iphone, as much as they have got great success in the macintosh with the pc industry is flailing, as much as they have had struggle in ipad business, they are blind on the iphone and it has never been greater. 64% of revenues in the most

recent reported quarter were all about the iphone. this is not an apple computer company or ipad company, this is the iphone company. 65% of revenue in the last quarter. thisreally have to nail right to succeed as a company. apple continue to make significant investments in ipad then? because there is more than just the sales to support investment in the iphone. iphone with the average price is up to percent from where it was a year ago, as where a is these for the ipad have deteriorated 10%. furthermore, the company sells you are of them. -- fewer of them. reasonsat is one of the we might expect a professional ipad. the company, to some degree, lowered when they reduce the ipad mini. they knew that would be less expensive, so to them, and there was great appeal for that. larger ipadunced a

more focused on enterprise and business, that would be up ahing to bring asp little bit. but you are right. the ipad has struggled. year-over-year sales have declined and it has gotten worse. i am looking for a discussion of the release cycle. the iphone has such a success in china that china has a percentage of the sales were all apple devices and it has become crucially important. about a quarter of all sales have indeed been going to china. that is important because we have seen china change a lot. we have been talking about this for weeks. the devaluation of the yuan makes u.s. merchandise, like iphones, more expensive. maybe the u.s. customer is nice and sensitive but not to in china. furthermore, you got the notion of conspicuous consumption in with thenging corruption investigations. if you look back one year ago, to china that the iphone was selling into was the iphone 6 plus designed, in some ways, for china. today's china is a different

place. the analyst had not brought numbers down much, but the reliance on china and the iphone and the change in the chinese economy with the consumer could be a big deal for this apple released today. erik: thank you very much. i hear the sirens in the background, make yourself scared. sounds like they are coming for you. scarlet: still to come, a pivotal meeting for the fed with the recent stock market volatility here and overseas, one of play a critical role in length of a type comes? -- in when the rate hike comes? ♪

scarlet: welcome back. i am scarlet fu with erik schatzker. let's get a look at the top stories. hillary clinton says iran nuclear deal is not perfect but she calls it a strong agreement. the former secretary of state, let's move on -- actually, let's keep going. she discussed the plan this morning at the brookings

institution and says that the time to stop iran from building nuclear weapons is right now. ok, let's move on passage of -- move on. democrats have 42 senators who favor the deal and that is enough to support president obama if he vetoes a resolution rejecting it. todonald's plans a switch cage free eggs over the next decade. the latest move by steve easterbrook to reinvent the struggling fast food chain. in march, they announced plans to use mostly antibiotic chickens and in april, increased wages for company-owned stores. erik: this is a real transformation but mostly responding to consumer pressure. some consumers are offended by the wages that mcdonald's workers were getting paid and makthey fee the same way about target. l and the ever-growing concern about the food supply. scarlet: and that mcdonald's has

not responded to changes the way other fast food restaurants have and they had made that no through sales, declining sales, locally and domestically. erik: yahoo! ceo marissa mayer got slammed and her company was called an accidental hedge fund on bloomberg television. bloombergs tom keene was talking about yahoo! with scott galloway. scott galloway always outspoken and he called marissa mayer the most overpaid ceo in history. he said yahoo! should have been sold a long time ago. scarlet: that doesn't for this morning's news headlines. we will be right back with more discussion on what is going on with united ceo along with two senior officials. ♪

erik: i am erik schatzker with scarlet fu. united is raising all

kinds of questions. was he the bad guy or the victim of public officials who made to for tax demands during business negotiations? or is there more to it? scarlet: they're looking into the chairman fly, twice-weekly flights between newark and south carolina. that is his weekend film. bloomberg david for yak is is with us. erik: you have that a lot of investigation, long before united decided that jeff smisekna had to leave. david: he left after an internal investigation that is tied to the criminal investigation to the u.s. attorney in near wark. it is a question of if there is a violation of company policies or criminal wrongdoing. it is not clear what might happen, but the prosecutors have been looking into whether there is a possibility of united paying bribes to david samson

through the form of this flight the united executives were the victims of extortion via samson who was in profitably exercising his governmental authority. erik: what do we know right now on the basis of documentary evidence and reporting that you and others have done? david: we know that sampson first raised the topic of the so-called chairman's flight in september 2011 at the dinner in manhattan with jeff smisekna and several other united executives, and he pressed for one year before the company eventually started up this life twice a week. at the same -- erik: a fight for which they were a few commercial arguments to be made. not a profitable quite. at the same time, united was withng the court authority several business concessions that could help them, improvements to the terminal in drug with a trained from and had to new work and

also concessions on the lease -- and a train directly from new york to newark. scarlet: did any payoff? david: pick up the hangar, no train, but they got the lease shall is presumably on better terms than they previously had. whether there was any criminal wrongdoing in negotiations for the exchange, we cannot tell because we do not have access to the e-mails that we do not have the subpoena power and we don't know what people may have said in interviews with the fbi or grand jury testimony. erik: can we say that if there is evidence to show that jeff smisekna traded the chairman supplied and who knows what else in exchange for some of the concessions he was looking for, does that constitute a violation of the law? david: not necessarily. the prosecutors need to determine what was in the mind of each of the players. scarlet: intent. david: intent is the critical factor. so if there is a quick protocol, there would need to determine

that there was an improper benefit granted in return for government service and then that could constitute intent. hardestone of the things in a white-collar investigation, determining intent. erik: what does it say about these other two executives? the head of communications or pr and the head of public relations. david: it is the same consideration. it is possible they were engaged in some of there could be evidence of criminal wrongdoing or could be a violation of company policy. conclusionso draw beyond that. david: it sounds if the board wanted to make a clear break so they did it dramatically. scarlet: what have you learned about the airline industry? is it normal for them to offer chairman's life? is a common practice to offer those flights? david: it seems to be usual and there seem to be negotiations.

the port authority is a powerful was a majorewark hub for united and they will have lots of negotiations and they did not always go so well. later filed airline a formal complaint over the port authority fee structure at the airport. what is the relationship between their internal investigation that united is conducting and the federal corruption probe? is the internal investigation obliged to hand over anything it gathers to federal prosecutors? david: i think the practice in these types of internal investigations is that they will hand over whatever they uncover to prosecutors because it is a radically possible that the airline could be charged as well. erik: they are strongly incentivized to the people under the bus under these circumstances, are they not? to lookhat is one way

at it but they are trying to prove that they cooperated. the: and that they made problem go away. david: if they identified the executives as a problem, they could make that argument. scarlet: what is the next step you are looking for? david: we are trying to see where the investigation is going and whether david samson may be charged or anyone from the airline. is in thehe ball authority court, whether they charge them. david: right. erik: and the first time that the port authority of new new york and new jersey has come over scrutiny. david: this has been going on for a couple of years now. the investigation of the port authority since the closure of george washington bridge. scarlet: and it now includes united and the ceo. thank you. still ahead on the bloomberg market day, netflix stock under scrutiny after seven straight days of the crime and it has rebounded. what is behind the sellout and was a justified? we will discuss. ♪

scarlet:scarlet: welcome back. we are one hour into the u.s. trading session and the rally underway. tok: a good opportunity bring everybody called up over the past, let's call it, 18 hours. let's start in asia where the session closed with green everywhere. the nikkei finished up 7.7%, the biggest gain since 2008. the hang seng in hong kong up 4% overnight and the shanghai, up over 2%. scarlet: another casualty on the bid for equity selloff. we filed this report from hong kong. >> the latest take them with volumes in china at csi 300 and

see us 500 futures pungent 99% from their june highs. as recently as last month, they were ranked by the federal exchanges as the most active index futures. now, liquidity has a dried up and authorities have intervened by raising margin and pushing into bearish wages. the volumes could cause greater damage than the equity route because of the part they play in the business -- investment strategies of hedge funds and institutions. analysts say that he to provide the futures market could under cap the government's efforts to prop up stability. erik: that was juliet in hong kong. let's take you to europe for mark barton is standing by. an update for the stock 600 up 1.5% and all 10 are trading higher. mark: you said it. european stocks rising for the third day, the longest winning streak since august the third. investors have a newfound optimism that the chinese market turmoil will be contained but

swooning after the nikkei rose seven point 7%, the biggest gain in seven years. this is europe's best performing market that is a point to -- 2.5%, and it has been the worst since china devalued the yuan over four weeks ago. the stoxx 600 has rebounded 7% since the index hit and eight low on august 24. that was the day that european stocks registered their biggest loss since 2008. today is all about commodity currency. the new zealand dollars, the south african, and i am focusing on the currency of the closer to home. this is sterling, the two day rise coming to a screeching halt today after industrial production unexpectedly dropped. in nineped the most years. this is added to other releases or released in the last week which shows an economy losing so

what does it mean for the bank of england? latest monetary policy announcement tomorrow. willard strike a more dovish tone when it releases the meeting? there is no time for haven like bond markets. the yield rising and the u.k., italy, france, and germany, let's finish with a riskier asset base. the stoxx 600, every single industry group is rising today. julie? julie: over here in the u.s., we are paring some of the gains and giving up some of the gains that we have seen earlier in major averages. earlier, we were higher by almost one percent on the major averages. now that is .1 of 1%. the dow on an intraday level, you can see more dramatically the drop that we have seen up from the highs of the session. here he have the dow jones sort of blowing up as you look at, in particular, right now. this leg downward in stocks and it does not seem to be a particular catalyst causing

things to give up against the we will keep digging to see if we can find one. take a look at my map, bloomberg terminal. you just saw mark looking at his and you see a lot more red. utilities, health care, consumer staples are dragging down the major averages from the highs of the session. however, materials and energy continue to be the best groups. it is interesting that energy is higher because oil is not. wti is falling that this applies report will show continued expansion and supplies. this applies report is not wednesday as it usually is because of the shortened holiday week it will come out tomorrow. rebound ininues its the opposite direction as oil, but it has given up a lot of the games over the past hour or so as well. freeport macklemore continues their march higher in a filing late with vice-chairman revealing that he had purchased 2.2 million shares on september 4 at nine point $70 apiece.

10 $.76rzer at 10.6 -- now, some not quite robust as we had seen. scarlet: thank you. i like how she says not quite as robust. it has papered off but we are in the green. speaking of the markets, the big question on mines, will the federal reserve do it or not? will they raise interest rates this month or not? there are signs, at least the bond market is prepared for a section increase. erik: with volatility, particularly in edit -- equities, the same cannot be said for stocks. oliver is going to explain. what have you noticed in the stock market that we do not see in the bond market? at what hasou look happened in stocks since the late august when they started feeling off quite a bit and you look at what is happening with fed fund future, the indicator to when we didn't market is going to raise interest rates, and what you have seen is believed throughout the years, september became the front month likelihood for a rate hike

acheron april. april really do august, the likelihood with economic data, but in the past three weeks, it has been moving pretty tightly thoughts of a rate hike in september moving pretty tightly with the stock market. scarlet: you can see the correlation in the last month or so. oliver: exactly. it is hard to say which is impacting much, but if you develop people consider in terms of what the fed will look at and the fact that through the next week or so before the 17 meeting, there is not a lot on the economic play and you have to think the market -- it feels like the market has a fair amount of conviction that the fed is looking at prices and looking at stocks, but otherwise, why would the chances of september rate hike come down with stock markets are around 12%? you have this sort of dichotomy between force of the fed which says, hey, we will go based on economic data, we will make a decision that is independent and keep in mind what is happening,

but the stock market is not necessarily informing our decision. i think people on wall street believe otherwise and that is what you see effective in the fed funds futures moving quickly. scarlet: ray nokia capital was saying that he does believe the fed will raise rates come september 17, but one reason they may not is because of increased volatility. erik: i think you would have to argue that it does not matter whether stock markets are anymore volatile between today and the 17th. volatility is already happening, so it would clearly be hard for the fed to raise interest rates on a day when the dow jones plunges 500 points, but that's assume that does not happen. the fed has probably already made the decision that on the in august,at he saw that is the financial instability they have to factor in. oliver: a few other signs as well. janet yellen said -- schedule this meeting after the september meeting and there is speculation has alreadyr -- she

planned that, so maybe she has a decision in mind. it interesting that we looked at was performed by bank of america equity analysts and they looked at periods in which they are , includingriods 2013, and they looked at the stock market environment and they looked to see what volatility environment was at the time. in all instances, including 2013, the stock market had gains in the past three months, gains in the past six months, and it was close to their 52-week highs. it cannot say that about the situation right now. there are a lot of things that are unprecedented in the market, said that is not a clear indication or guarantee that the fed will not move, but it does give you an idea of what historically in private they have moved in and we have not seen that in the past months. scarlet: thank you so much. you can read all of this story on bloomberg.com. erik: netflix is making something of a comeback.

they have ended a seven-game losing streak that sent it to a two-month low. it is up a little more than 5% with a decline on the back of increased competition and where the concerns justified? with us to discuss his matthew, director of equity research. does the stock need to be re-rated, michael? michael: clearly, i am in the minority. i have a sell on it and i think list of the street loves it. it is a really good company. i think that share prices got way ahead of itself and it is trading on ether, so a couple hundred thousand subscribers above what we expected, adding less than 50 million in revenue, as you said, a two-month low -- it was $12 billion higher than it is now. $150 million in revenue, the stock was trading at about 250 times that revenue boost. that is crazy talk. i think mutual funds are starting to realize that population is stretched and a

lot of people rushed into the stock because there were benchmarked against it, so if netflix kept going up, then their bonuses were dependent upon keeping up with netflix. i think that's a momentum still did up to 120 nine and skill that back to 95. it is probably in the light range right now. scarlet: netflix is one of those hi-fi momentum stocks that have taken up and now taken down. the re-rating that happened earlier this year after netflix said that it international goal would be met earlier than that led to a lot of optimism from investors. why is it that investors seem to value international subscriber growth the same way they do as the mystic subscriber growth? that's an excellent question. investors seemed to disregard that each country as a separate negotiation with separate content and different culture and different taste. going into south korea, which is the latest country, or japan, that is completely different

thing going as a candidate for us to have where the taste is similar to domestic. they have to negotiate separate content, you have more bidders, i think investors are crazy to sayingem full credit that it is worth the same as domestic. they have leverage on the domestic line although they are beginning to get toward the saturation. they are not even close to saturating internationally. most investors think they can or 400 leading international subscribers and they will make 10 times what they make in the u.s. that is not true. they will probably get to 100 million international subscribers and i question whether they will be profitable outside english-speaking countries. it is tough. there is competition and cost is not fixed. they are going up everywhere and i just do not see the leverage that my peers c. erik: michael, bringing it back on, if cable unbundling is real and over-the-top is real, is that going to raise or reduce the cost of acquiring exclusive

content? michael: that is really a great question. hurtcosystem actually gets by unbundling and going over the top. the content creators are better off if i pay every month for 200 channels even though i only watched 10 or 20. once they unbundle, i will not pay for 200 channels that i do not watch, so we will probably, in the aggregate, pay less and not good for the guys who create -- self content, but there will be a scramble because that $100 a month cable bill and incremental $50 a month of advertising revenue will float somewhere and they will try to chase fly balls over-the-top. i think there will be more bidders and they will have to raise price because fewer people will watch content. you will see deals like that top gear deal that amazon signed for a purported $250 million for a pbs show.

you will start seeing people bidding up to get that differentiated content. i think in the long run, price will end up being the same and consumers will get less and pay more money for less. it is kind of ashamed but that is the way we are going. erik: great answer. thank you. course, that is why people said the golden age of television is cleaning and soon to and. erik: we are reminded that he -- misset: it means he did some of that they grind up, but at least he is looking at the decline now and thinking it is justified. still ahead, got a need for speed? 20 15th fastest sport car. we will tell you what it is, next pitch -- next. ♪

i am matt miller. performance car is the passive going as far as the sales. more than 20% since 2011, but

which one is the fastest? they hosted the annual lighting lap to decide and let's bring in editor in chief of car and driver. you have done this eight or nine times? you -- explain to our viewers what it is. you said, an annual thing that we have been doing nine times. the purpose is to put the hottest streetcars of the year on the track and see what they are made of. we take 20 or 25 of the hottest performance cars and go down to of the most technical and fast race tracks, and we judge them against the clock and the fastest car wins. matt: i am looking at the picture behind you and i see a porsche, a, a lamborghini her con -- hurricane, all of those were bested by the chevy corvette. eddie: believe it or not, yes.

the mercedes gts, fabulous car theto take a piece of an fourth place car was, as you say, the gp three for about $160. billy get in the legitimate round with a lamborghini, 630 horsepower, all-wheel drive, $250,000. and we have the five people who bring you the formula one, but the one that ticket all was the homegrown hero. the chevy corvette. $100,000 which is a lot of money, but relatively speaking, not so much. matt: you can get into the corporate cheaper because it starts at $55,000 and that is pretty much all you need. are these cars selling a lot more? we see trucks selling a lot more because of gas prices, does that help muscle cars, to? absolutely. i think there are three things working in their favor.

first, there are a lot of these rings on the road. car manufacturers are making them to telegraph brand values. we call the halo cars because they shine a great light on the rest of the brand. secondly, bonuses are back and people want a toy. i think the third is that people are discovering, not too far from home, they can get on a racetrack and exercise the full potential of the supercar. matt: i hope they are discovering that. thank you for joining us. eddie alterman, editor in chief of "drive -- car and driver. that is pretty impressive. >> i'm not detecting quite enough enthusiasm. matt: no/ erik: no. these cars are selling so well. it is a good day for america! ♪

. .

scarlet: it is 11:00 in new york. pimm: welcome to the bloomberg market day. u.s. stocks opening higher and in japan, the nikkei posted its

biggest really gain 2008, rising more than 7.5%. scarlet: apple will be holding hours --t event in two from a new iphone to an improved apple tv, we will look at how it could impact apple's bottom line. off: yahoo!'s plan to spend alibaba stock has been dealt a setback after the company reveals it withdrew a setback from a ruling from the irs after it received for the agency would not approve the deal. scarlet: good morning. i'm scarlet fu. pimm: and i'm pimm fox. we are 90 minutes into the trading day. let's look at how stocks are moving. the continuation of yesterday,