in the 9/11 terror attacks and honoring the emergency workers who were the first responders. breakdowne commodity continues. goldman sachs cut its forecast saying crude could dip to $20 a barrel. >> kroger reported better than expected quarterly profits helped by operating expenses and higher gasoline margins. the cheap fight -- the chief financial officer of kroger will join us. ♪ olivia: good morning, welcome back. i'm olivia stern. : i am pimm fox. let's look at how markets are trading. u.s. stocks, the s&p 500 down .5%. murphy oil, transocean, lower. is dow jones is setting --

shedding 4/10 of a point. the nasdaq is down more than 30 points. olivia: we are down but still on track for a gain for the week ahead of the meeting next week, and that is weighing on treasury markets. treasuries are rising for the first time in a week as stocks falter. the 10-year note down by five basis points trading at 2.17%. a lot of action in brazil after s&p downgraded its rating on brazil sovereign debt to junk status. here's what happened to the brazilian royal. they're up by 30% to the u.s. dollar. we heard from the banks that they thought the royal could go to for per dollar. -- four per dollar. that is in speculation the finance minister could resign. pimm: you're the ongoing scandal, the debt, and the

potential for a recession lasting a long time in brazil. olivia: the cheaper the currency gets -- pimm: as long as they can buy overseas oil. olivia: it could be good for olympic tourists. top: let's look at the stories crossing the bloomberg terminal. ceremonies across the nation marking the tragic events that happened on this day or 10 years ago, the 9/11 attacks. and michellema obama observed a moment of silence at 8:46 a.m. when the first of the 2 hijacked planes slammed into the north tower of new york's world trade center. victims families are reading the names of all of those who died when the twin towers fell. remembrances are taking place at the pentagon and the flight 93 in westernmorial

pennsylvania. the attacks killed nearly 3000 people. seekmore's mayor will not reelection. stephanie rawlings blake has been under fire since april's following theots death of freddie gray. he died from a severed spine after being injured in police custody. the first trial for one of officers charged in his death starts next month. on thursday, the judge ruled all six trials will be in baltimore. thousands of migrants are to austria. hungary rail service to hungary was suspended because of overcrowding. ry is holding hunga many refugees outside without food, water, or medical assistance. olivia: new evidence inflation is not a threat. u.s. wholesale faces --

wholesale prices were little changed. foodprices, not counting and energy, rose by 3/10 of 1% in august. those prices post a dilemma for the federal reserve. they want to see inflation closer to 2% before raising rates. arbors professor told bloomberg that -- a harvard professor told bloomberg they want to cover their bases. >> the model has been off, you don't know where you are when you land. you kind of want to see the inflation more than usual. olivia: o policy meet next thursday. the bank controls have been pegged at a record below zero, near zero, since 2008. goldman sachs is cutting its oil forecast. they are seeing a global abundance into 2016 into opec production. prices could drop to $20 a

barrel. they're trimming the 2016 price forecast to the five dollars a barrel, down from $57. it is slashing its 2016 forecast from $62.crude hbo has released the first pictures showing robert de niro for achelle pfeiffer highly anticipated new movie. he was sentenced to 150 years in federal prison in 2009 after pleading guilty to a ponzi scheme. he scammed investors out of an 150 5 billion dollars. coming up in the next hour, more including 800,000 refugees who will likely enter germany in 2015. could this be an economic opportunity for the eu's largest nation? we will discuss. the eu andrning germany's refugee crisis, we will look at if -- we will

look if this will be a boon for germany. and kroger operating in higher margins for gasoline posting second results that are better than estimates. the company raised its forecast for earnings and sells growth for the -- and sales growth for the year. the chief financial officer will join us with more details. we will find out how a big data approach may help geneticists spot a rare diseases. that and more coming up on the bloomberg "market day." is the 14th anniversary of 9/11. the terrorist attacks in the united states. it will be remembered as a dark day in the nation's history, and a day of resilience and resolution. former oklahoma governor frank keating is familiar with the challenges rebuilding a city. in 1995 the oklahoma city

150 lives andd destroyed 320 five buildings. he joins us from washington to reflect on what it takes to rebuild a city after a tragedy. thank you forng joining us. could you share your personal experience of where you were on 9/11 14 years ago? governor keating: like all of us who have witnessed tragedies or lived through 9/11, your member where you were. we had the mayor's prior breakfast. they were meeting -- prayer breakfast. they were meeting. it was after our tragedy that we needed a lot of prayer and food for the rescue workers, firefighters, and first responders. we were prepared, but you are never prepared for an people likely suffered today 14 years ago and in oklahoma 20 years ago

last april 19. olivia: when you reflect on the changes in foreign surveillance and domestic policy that has happened in the wake of 9/11, do you think we are safer now than in 2001? governor keating: i think that -- and by focus when i was a bureau agent was not to prevent crime but to investigate it after-the-fact the fact. now, everyone in the criminal justice field wants to prevent crime. what worries me is a former governor are two things. first, in the cities and towns of america, there is the iran chemical, radiological panel, and the lack of knowledge on the part of city what does smallpox look like, or a radiological event, and how you respond to it is a real problem. second, how much do we really do

to make sure that we have highly competent firefighters, a highly competent police chiefs, fire chiefs, first responders? there are people that will help us if we have a tragedy in cincinnati or hartford, connecticut. i'm not sure that we have focused on highly professional skilled people as opposed to political people to prepare for and respond to an event that happened to us in oklahoma city. important is the most lesson you took away from oklahoma city, as well as the 9/11 tragedy? governor keating: transparency and truth telling. the public wants to know what is going on. it is like when we are on an airplane and the captain does not say a word when the airplane shakes. you have to tell people what is happening, what they need to do, what they should fear, and what they should be confident about. i think information from the

public leaders, law enforcement, and firefighting community are essential in the wake of a bad event. rebuilding, we noted earlier, as olivia was saying, there were 20,000 men have in its -- there are 20,000 inhabitants in lower manhattan, now there are 70,000. how'd you attract people after a tragedy? governor keating: new york is different. most places you would move somewhere else in the city, for example. in new york it is a vital city. lower manhattan is important. people go there because they think today they are safe, and they will be protected in the event of either a street crime or terrorist event. in oklahoma city's case, that area around the bombing, over 300 buildings were damaged or destroyed.

it is a renaissance area. i think people are proud of how they worked through the tragedy. we never had one active looting in those 300 damaged or destroyed buildings. we raised money to send every child through college that lost one of the parents. -- who lost their parents. people saw that as not only a memorial site, that a statement of excellence, spirituality, and goodness on the part of the city. people wanted to live there. i think that is the same case with 9/11. pimm: frank keating, the former oklahoma governor, former fbi agent, and former federal prosecutor. apple's latest iphone as a new users are excited about. what it means for apple's bottom line, that is next. ♪

olivia: welcome back, i'm olivia sterns. pimm: i am pimm fox. that's go to julie hyman with what is happening on the markets. we are off of our session lows? julie: the dow fell by 90 points earlier. we're still in the red across the board. i want to point out one group doing well, or at least better. the homebuilders. yesterday there were disappointing numbers from mary tosh that is coming back i 2%. -- back by 2%. jpmorgan in a note said the

companies may have moderate upside potentials of 14% on average over the 16 months and have strong earning growth in 2016 and 2017. evaluation on these companies is fairly full but not unreasonable. they were upgraded to neutral from underweight. we are getting a couple of downgrades from jpmorgan. if you look at the downgrades and how they are performing, we have them on the next screen. taylor marsden being downgraded to neutral from overweight. a mixed performance within the homebuilders on this call. i want to look at how the homebuilders have done in the year to date. look at my bloomberg terminal. the s&p homebuilding index. i want to look at it from peak to trough. the highs through the recent plunge. we had a pullback of 12.5% in the homebuilders. sense that it has recouped more

than half of those losses, more than we can say for a lot of other groups. the homebuilders for the year are up 11.5%, as we have been getting momentum largely on the whole in most of the housing numbers. homebuilders have been holding up relatively better than the rest of the market. that seems to be continuing. jpmorgan is calling today. back to you guys. pimm: let's look at some of the top stories at this hour. the japanese rescuers are in a desperate search for 23 people missing in a flooded city. after 2 days of heavy rain northeast of tokyo, floodwaters washed away houses and drove people to rooftops. reported.hs have been a new policy at walmart is making suppliers mad. for want vendors to pay

space on shelves and warehouses. some vendors want a better deal. walmart says it is trying to streamline its relationships. brazil's state owned oil producer is the new king of the junk on the market. petrobras is the largest noninvestment grade corporate borrower. those are your top headlines. on wednesday in san francisco unveiled new features and phones. who are the suppliers of the 6splus. and here is cory johnson. what about the new features? i understand there are cold followers of apple products that have been waiting for this new addition? for the must-have technology product, the latest

iphone of the date, geeks like me will buy the latest thing because they have to have the latest thing. the iphone business is a huge business. it is the most successful phone, the biggest company in the world, and it is driven by the iphone. suppliers have been getting ready for the device and put things into it. up to does not make them on their own, they have suppliers -- apple does not make them on their own, they have suppliers throughout silicon valley. they have to have their products for some these phones time. when you go through the list of key suppliers, bargo technology, logic. logic, -- siris all of these countries benefit from the growth of apple. they take place alongside apple with creating the ability to make the iphone do its magic. you see a reaction from those

companies and their stocks. look at skyworks solutions, the company that did nothing for a long time in terms of public market you rock did with the plus, andne, 6s and 6 hope they can do the same with the next one. olivia: can you say anything about your expectations for how the new iphone will sell? cory: apple prevents anyone who works with or for apple from saying anything. with public companies they have a responsibility to investors to tell them what is going on. you see coded messages. a great piece was written about what bargo had to say. it suggested problems and opportunities with apple with the last phone release. of all go -- if i'll go -- they new phone model

in north american smartphone customers, that will partially be offset by products like a rollover in the asian customer. that points out the great dilemma to apple right now. smartphone growth globally and particularly in asia, and particularly china is slowing down. -- some have had success, and others are failing. slower growth in asia is hurting the suppliers, and maybe they will not benefit as much as apple. as apple gains, they are seeing weakness. olivia: we will leave it there. cory johnson joining us on the suppliers for the new iphone 6. i cannot get over that they have a microsoft product manager. that they had a microsoft product manager on stage. i was taken with the jumbo ipad with a stylus. i thought steve jobs did not want a pen.

that appleople said was in catch-up mode because they were replicating a product that microsoft had. pimm: the pressure sensitive touch. tv was not thele game changing product we were hoping for. does not have the live tv capabilities were hoping for. pimm: we are live tv. olivia: and bloomberg is available on apple tv. pimm: could the migrant crisis economic lift. what they could do for germany, the european union's largest economy. ♪

expect german officials 800 thousand asylum-seekers to enter the country in 2015. whether or not the immigrants

are integrated will be decisive for the economy. will angela merkel be able to turn this refugee crisis into an economic opportunity? that is the big question. there was an interesting piece a personnancial times, with the research group in germany is saying that angela merkel has an opportunity to turn this into an economic wind for the country, compared to what happened when the huguenots fled 17th-century france and it turned into an economic stimulus. foreigners currently more ton germany pay the state and they receive an economic benefits. there is also an economic one. as crass as it is to say, immigration could turn germany's precarious demographic

position into a positive one and pay the pension of all of the native germans who are going off of the tax roll. issueshose are the same that are facing other countries in the european union, such as france and italy. well sentiments, however lauded they become, have to be translated into action and have acceptance from the local population. there is a stream of migrants walking from denmark to sweden because they feel that their time spent in sweden will be better than them bark -- van denmark and that the country's more welcoming to refugees. we know the austrian bro a system has shut down the train service from hungary to austria -- we know that the austrian train service has shut down from hungry to austria. ngary to austria.

pimm: the german government is saying there's always a question, can we afford to take in all of these migrants. wolfgang schaeuble is saying that we can afford it food and shelter costs, but long-term there are compelling economic arguments to show that actually accepting all these people and integrating them into the economy can be positive. pimm: a short-term problem that can be mitigated by a long-term benefit? olivia: that does it for me. pimm: i will see you this afternoon. still ahead on "market day." waves in theing marketplace. we have the chief financial officer next. ♪

pimm: this is the bloomberg "market day." i am pimm fox. democratic vice president joe biden is making it clear that his decision about running for

president is more emotional than political. the vice president appeared last night on stephen colbert's new late-night show. he is not ready to commit to a white house run. vice president biden: i do not think any man or woman should run for president unless, number one, they know why they would want to be president. they can look at folks and say i promise you you have my whole heart, my whole soul, my energy, and my passion to do this. says he and his family are still mourning the death of his son who died late .n may he has run for president twice previously. the bank of montreal is buying this miss in the united states and canada. the purchase price will be around $13 billion. the unit is the largest finance

north american commercial truck and trailer market. the deal is slated to close in the first quarter. jane birkin says that ms can can -- says that hermes keep selling the handbag that has her name. s totals up 50% of herme sales. at the moment, markets are closing in europe. that's go to mark barton in your. -- in europe. mark: the biggest weekly gain in 2 months. there's only one thing that matters. next week's federal reserve policy meeting. investors are confident china will stabilize its financial market and economy, which led to the first rise in asian shares in eight weeks, and the first increase in chinese shares on a weekly basis in four weeks. percentebounded i've

since dropping 5% on august 24, the biggest decline in seven years. the index, europe's benchmark is 13% below april's record. the biggest moving equities across europe on this friday's session, a swiss drugmaker, 5.4% lower. late on thursday, it is in talks to buy texas-based veggies farm. skeptical because of price. a danish television company, 7% lower today. theydic telecom company, have the merger of their danish businesses. that means that this company is going to be -- that there's going to be less competition in the market and ins the prospect of that competition. glencore is a big decline or.

it was one of the biggest weekly declines ever. i put it up because it has rebounded, almost raising 10%, today up 7%. the company will sell shares to reduce its $30 billion debt path. overs fell on friday, but the weekday rose. the biggest weekday advance in two months. much.thank you very mark barton reporting from london. coming up on the bloomberg "market day." approach tota genetic sequencing is helping diagnose rare illnesses. we will look at netflix's first original dome called "a beast of no nation." a premier this sunday at the filmto international festival, and we will tell you where netflix wants you to watch the movie. showering without water. how a start up is making .hat happen

kroger reported quarterly earnings that beat estimates. the biggest supermarket operator in the united states said capital spending controls and higher margins for gasoline helped results. sales jumped more than 5% and the stock is up more than 15%. chiefchlotman is kroger's financial officer and joins us from the headquarters in cincinnati, ohio. can you tell us a little bit about the forecast for earnings and sales? mike: thank you for having me this morning. it is coming off of the heels of a great earnings report this morning. result. is a good and identical food store sales without fuel for the 47th consecutive quarter of positive sales, which is closing in on 12 years. a great result. we're thrilled with our businesses position -- with our

businesses' position. we raised sales based on the second quarter results and where we are in the third quarter. our outperformance on earnings per share in the second quarter gave us the comfort to raise the low and high end of the expected earnings range for the fiscal year. if you couldr describe the use of cash flow from the company, and how that is the kroger strategy, what you do with that money. if you look over the last four quarters, we have returned over $1 billion to our shareholders in buybacks and dividends. we have invested over $3 billion in capital products and spent short of $500 million buying leases and merger and acquisition activity. deployed $4.5 billion in cash to grow the

business and reward shareholders. at the same time we have lowered our leverage ratio. it is now 2.02 at the low end of our long-term comfort range of 2.2. we are using our cash, our debt is under control, and we reward our shareholders and give great value to our customers when they come into the stores. we continue to create opportunities for our associates. pimm: you have been creating opportunities for acquisitions. for example, the harris teeter acquisition. mike: that has gone well. it has been over two years since we started talking to them about that transaction, 1.5 years since they have a part of the kroger family. yesterday, you might've seen the new executive structure that we announced.

that says something about how we look at merger and acquisitions. it is not about spreadsheet work and cash flow. it is about, do they have a quality management team and a quality team in the operation overall. with fred joining our executive ranks, it demonstrates how we are so excited to have that acquisition merger opportunity that we did. pimm: you have 400,000 employees, and you say you will add 20,000. what kinds of jobs? mike: a wide range. many are in stores, there are others, not just inside the stores. as we continue to spend capital that i spoke of, close to $3 billion this year, opening up stores and expanding stores, we need more store associates. these are permanent jobs. it is a great wage with a great wage with the great health care

plan and pension plan. over 70% of our current store manager started out as a part-time associate. it is an opportunity to not only come for a job, but stay for a career, which is why we are excited to need 20,000 associates. pimm: competition from online operators like amazon or fresh direct in the northeast. how do you compete with online grocery stores? mike: we look at folks who sell food as our competitors, whether restaurant, aood fine dining restaurant, or a competitor. our goal is to have an offering that satisfies the customer, and when they want to interact they can come into a brick or mortar store, and if we offer a home delivery. we are working out a way to have a home delivery, then you can pick it up at the store. it is something we are excited to learn more about at the time

of the merger with harris teeter. we expect to continue rolling based on consumer acceptance. most of our customers live within two miles of the store they shop it. .- they shop in this allows them to order from the comfort of their own home. when they go about their daily business, they can decide when they want to swing by the store, bring our associate -- get our associate to bring it out, and away they go. pimm: the next comes from the detroit bureau chief, he wants to know if there is a chance for a transgender insurance coverage at kroger. we have a wide variety of health care coverages. we offered health care coverage toore a supreme court ruling same-sex couples. we continue to look at the opportunity to have the right health care package for

associates, regardless of their orientation or gender. it is something that we continue to look at be contemporary. pimm: we are happy where we are today. thank you for spending time with us. the kroger financial officer mike schlotman joining us from cincinnati. how sharing your dna information can help identify diseases faster and save lives. ♪

pimm: this is the bloomberg "market day." i am pimm fox. a fired see group -- a fired taking a manager is swipe at his employer.

he said that a former colleague profited from front running client's born exchange orders. he implicated michael plot make. citigroup denies the accusation. a probewas fired into into rate rigging. hackers may change strategies to disrupt financial markets. james clapper says new cyberattacks may alter electronic data instead of stealing it. he told a house panel that hacking can be expected by criminal seeking profit and as a pool of war to destabilize western nations. a difficult month for john paulson's hedge funds. as merger fund dropped 4.2% stocks slid worldwide. gained twotners point 6% so far this year. those are your headlines. can learn everything about

your self for $1000. that is what it costs to have your entire dna sequenced. what you do with the information when you have it? they can be shared. doctors do not know what to look for to identify it rare diseases. now, genetic analysts have a new diagnostic tool. what is this all about? how does it work? >> and this is fascinating. the cost of getting your dna sequenced has fallen. the first time we did a human being it took years and billions of dollars. now you can do it for $1000 in a lab in a few hours. pimm: you take a swab? drew: it is a tissue swab, it in andr, you send he goes to a supercomputer and is processed. it is remarkable technology. thing lets out to gigabytes

and gigabytes of data. much of which we do not necessarily know what to do with. let's say that you are sequencing a tumor cell, you know the mutations to look for. that is something science has gotten good at. let say we do not know what is wrong with you. there are 25 million americans 7000have one of disorders that are a defect of a single gene. they show up in childhood and can be devastating. some can be very mild. a lot of times those people have spent years or decades trying to find out what is wrong with them. all of a sudden we have a tool that can take that huge haystack of data and say, let's figure out exactly where the needle is that we are looking for. see what is wrong in your genome in this massive set of data we have come and try to figure out what is going on.

pimm: who is doing this? -- clairtoss genetics. they are in boston. they are lab that has partnered with boston children's. they are the type of hospitals that see these kids that come in with these strange hard to figure out disorders. a lot of the times you read about medical mysteries were people go their entire lives without knowing what is wrong with them. was bornamed jackie when she was three years old. were floppy, she could not stand up, she had a motor disorders. the doctor told her, take her, were sorry, she's probably going to be dead before she can drive. is 35 now. she just spent her entire life wondering what is wrong with me,

why do i have these things? why did i not die when the dodgers were so sure i would. she went into this company and it took a few weeks for them to look through her genome and match it against other things they thought could be wrong or where to look and get an answer. and say, hey you don't have the thing that kills people before they reached their mid teens, you have another milder form. she is now in clinical trials and is part of a research project that is able to help some people figure out, here is what is wrong with me, can i help out in the drug development process to find cures for a lot of these devastating, rare, mysterious diseases we have had for years and years. pimm: claire toss june and thermo fisher. -- clarotoss genetics and thermo fisher.

netflix does for the oscar nod. their first original film premieres on sunday at the toronto international film festival. we will explain the business behind the scenes. ♪

pimm: coming up next week on bloomberg "surveillance," eight conversation with the hedge fund manager of bridgewater, ray on wednesday, september 16 at 6:00 p.m. netflix, their first original movie is called "the beast of no nation." ill be screened on sunday at the toronto international film festival and will give them a chance to win the first academy award. what is the company's larger objective? helping to answer that question is my coanchor for the next hour, betty liu.

this is not about ticket sales, it is about raising the number of subscribers. they have 65 million subscribers. this is how they make money. this is their first movie, it will not he about whether or not it will be number one in the box office, though they would like that, but it is them saying they want people to come on to the and watch morem theatrical productions. stay on the platform longer. pimm: such as house of cards and orange is the new black, and so on. betty: it makes them indispensable. you saw apple revamping apple has its own film studio and wants to make original film productions. alibaba is, apple is, and are most else you could name is getting into the game.

netflix wants to make the first step and they want you to use their platform. pimm: this feature-length motion picture is -- betty: about an african warlord. pimm: it is designed on its length and showing to be entered in the oscar competition. toty: in order for that happen you have to be shown in theaters. want to of the movie show this movie. they want to preserve their market share. they say what is the incentive for a stint do this? the movie theaters and the studios have been able to keep their dominance because there is a window of time. 90 days. and they have distribution. they want to protect themselves. time is running out. people's eyeballs are going from theaters and televisions on to mobile phones. you and i both have gone kids, we note -- have young kids, we

know this. pimm: maybe we'll see it on sunday at the toronto film festival. it is time for today's options insight. let's go to julie hyman. julie says we are at the top of the hour. the dow has turned positive on the day. we are seeing him being led higher by the donald's, united health, and ibm. others are lower, but not by much. here is a trader at alpha shark trading from the cboe in chicago. after all of the dramatic moves, this week we have been muddling along. will we have more of a drifting environment, or is everything going to change with the fed next week? >> everything could change after the fed meeting next week. would we have been seeing over

the past weeks and months is alternating up and down weeks in the s&p. that is a choppy environment that is difficult for some traders to take advantage of. someone like me with a short holding. can buy low and sell high and be nimble. some people at data tough time. two weeks trading at a 100 point range with no conviction one way or the other. big and institutional traders are sitting on their hands until we get through the catalyst event of the fed meeting. have any positions on what you think the fed will do? generally speaking we are seeing a volatility environment that is not too much above our historical average in the vix. we are looking to get volatility into the fed meeting. we will see a lot of demand for options. people looking to position for hedges and the speculative that's a head of the meeting. when we get through the meeting

we will see a collapse in the suggested volatility. i would get along going into the meeting, and sell after. julie: you have a trade pegged for fedex in particular. shares are down 14%. it sounds like you do not think the shares will continue to do very well? >> they have a terrible performance record on earnings day. it is only rallied four times in 12 quarters on earnings day. the options market is implying a move over $6.50. that gives me a down target in the 133 or 134 area. i want to look at the 146 and 134 spread for $.50. i could risk $50 to make $150. if fedex stays with the historical trend and sales off to the measured move target after friday after earnings. julie: what is the risk?

it does better and breaks the losing streak? spreads.m buying the if they sell off to the downside i can triple my money in one week. julie: what if it does better? downsidedoes better my is $.50 for the trade. i have a low level of risk and a lot of upside if it sells off. i love trades like this. julie: thank you. we'll be looking ahead to the fed next week. joining us in chicago. we'll be back with much more "market day." ♪

pimm: good afternoon. it is midnight in hong kong. betty: welcome to the bloomberg "market day." stocks are fluctuating.

the federal reserve meets next week. will they or will they not raise the interest rates? pimm: we will talk about how low can oil prices go? goldman sachs says $20 a barrel is not out of the question. focus on netflix. they're planning to take on hollywood and win its first all square. a move that could reshape the movie business. ♪ pimm: good afternoon, i am pimm fox. liu.: i am betty let's look at how the markets are trading. it has been volatile this week and is today. s&p futures are recovering, but lower. in the green, up 20 points. the nasdaq is off, but smaller. 1/10