at fort meade on the 14th anniversary of the 9/11 attacks. today nearrlier ground zero, victim families read the names of those killed when the towers collapsed. remembrances are also taking place at the pentagon. the attacks on 9/11 killed almost 3000 people. good afternoon. alix: we do want to take a look at the markets at this hour. a pretty uneventful day across the board. the dow at 50 points, move on. scarlet: though they are higher for the week. but if you just look at this week, we are up. still positive for the year. alix: if you take a look at the

two year yield and the dollar, they seem to be reflecting expectations of the fed not hiking. there you see the yield slightly lower at one point yesterday but now it seems like the expectation coming off of it, especially when you have the probability of a rate hike move at 20%. scarlet: this is something people are debating, whether stocks can withstand a rate increase. it is the big debate of the moment. we know the increases coming if not next week, by the end of the year. alix: we took a look at the s&p 500 versus the last few cycles. dotted line is about one month information rate hike. stocks were slightly lowered two weeks later but you go for a word about five months and stocks are up. a 7% up or down

around the rate hike but stocks end up normalizing. the question being will traders buy the dip knowing stocks will likely be higher. scarlet: and that means we are kind of mumbling in the meantime. history also suggests the asia-pacific equity markets can probably withstand an increase. asia and stocks tend to react positively when they price it in negatively. 1999-2000, asia and stocks rallied by 33% in four months, which is why they fell 7% afterwards. in 2004, stocks seldom percent before the interest rate increase. afterwards, they rally by 50%. stocks fell by more than 20% over the last three months. currencies fell even further. does that set up for a rally? alix: and a huge rally.

for more on the market and what -- weect, we are joined will be joined by the strategist andhe give america maryland, new york. when you take a look at the volatility we have seen and you take a look at commodities and currencies, all across the board, the spike in volatility really is what some suggest the fed should or might be paying more attention to into the rate hike. what you see is the to 50.78 on august 24. since then, we have been trending lower for the still above the long-term historical average. alix: now we are joined by an equity and quantitative strategist at bank of america. thank you for joining us.

we were just talking about what history has done with the s&p 500 and asians stakes -- stocks. is a little bit different than what we have typically seen heading into a fed rate hike. normally, the market is pretty strong in the three months into the first tightening. this time around, we have had a likehe fed doesn't look -- look at the fed is one other mandates but i think this would be unusual to have this stock market ahead of the first tightening. we also noticed we have never started a tightening cycle with the breakup of 75. volatility in the market could

spell worst growth so that might be a signal the fed has to pay attention to even though it is not part of their official mandate. scarlet: but among the analyst and investors we have open with, they say if the fed does not raise rates next week, it will be because of volatility. what other measures are they relying on a site from the anecdotal and actual gyrations in the indexes? what strikes me as unusual about this cycle is we're not just sitting volatility in the equity market, we see volatility in every asset class -- commodities, currencies, stocks, bonds, you name it, you are getting volatility. that is a very profound difference from prior soft patches were even in the worst financial crisis we have seen,

volatility was really localized in stocks and bonds and it really didn't spill over into other areas. this time around, volatility is everywhere so i think that might alarm though that things might be a little different than they have been in the past. emergese we seeing the -- emerging markets leading to developed markets? markets sing-along where weakness. is that part of the volatility story? >> i think so. we see some cracks in the biggest growth story. the emerging market phenomenon. we're really seeing an exit from the massive liquidity that benefits small companies, small economies that need capital to grow. now we are shifting into an

environment where instead of liquidity being pumped into the system, we are heading into an environment where liquidity is being withdrawn. it's not surprising to see some areas of the market shows signs of trouble. where i think we will see it next is small cap stocks. stocks arell perceived to be more domestic. small caps need capital to survive and if the cost of capital is going to increase with the fed tightening rates, that is a bad environment for them. that is one asset that might undergo more pressure in the coming months. scarlet: so far, when it comes to developed versus emerging markets, you haven't seen the market macrooped indicators. it is fairly resilient. will that change when earnings season begins and you get

forecasts from these companies suffering from a stronger dollar? ofwe've already seen a lot pain on those phenomenon over the last couple of quarters. we have seen energy estimates, globe emerged -- global national stocks. they could come u.s. multinationals actually had a higher percentage of the beats then mrs. in the last reporting season. i don't necessarily think that multinationals in the u.s. are as market sentiment would suggest. i think some of these are the real high-quality places to be in an uncertain, volatile environment. alix: he recently lowered your forecast for the s&p 500 but that would still imply a 10% upside for the year.

your sell side indicator as why you see that upside. what does it mean for you? >> the sell side indicator where we take a poll of all the wall and weasset allocations get from each of them the recommended allocations of stocks in a balanced portfolio so what wall street is telling you to put into stocks in your portfolio and we found it's a very reliable contrary indicator . when wall street strategists get a very bullish, it tends to be a signal. hatedas been the most bull market of all time. wall street strategists are still only recommending 54% allocation to equities, well

below the benchmark of 60%. we are climbing that wall of lori. he was stocks are still not at the level of euphoria that would suggest you want to sell stocks rather than buy them. -- it does not been that with euphoria, it has been met with skepticism. thelet: perhaps because of skepticism, what are you looking for in terms of leadership among the sectors? >> i think we're at a turning port -- point and leadership. if the fed tightens, that is a seismic shift from easy monetary policy into tighter monetary policy and a withdrawal of liquidity. on -- cash is king and

liquidity might become the most important factor in investing. in that environment, we like multinationals. we like high-quality companies and they cap industrials. .- big cap industrials they're providing growing income, they have healthy balance sheet for the first time in a long time and this is a world where leverage will be equal and cash is king. scarlet: thank you so much. equity and quantitative strategist at bank of america merrill lynch. alix: the forecast a 10% increase for the year. a look at the top stories making headlines. donald trump is that to be in toks to sell miss universe . scarlet: and saudi arabia civil

-- and authorities dozens are wounded. officials blamed strong wind for a train collapse. people are converging on the holy city. alix: the mayor of baltimore will not seek reelection this year. stephanie rollings blake has been under fire since april following theots death of freddie gray. he first trial for one of the six officers charged in gray's death starts six months. a judge ruled that all six trials will be ruled in baltimore. is on the decline in more than two decades. the press about his curbing u.s. a shell output. the iaea says saudi arabia

appears to be having the intended effect. alix: the government says he was all prices were a little -- whole prices were upset by following field cost. core prices rose three tens of a percent in august. the price increases. the policy makers to make sure of the ground. >> i think after your models ,ave been so off for so long you kind of want to see the inflation more than usual. alix: the policymakers meet next week. the short-term control has been packed at a record low since late 2008. scarlet: the first rate increase

in a decade. much more coming up on bloomberg market day. we will take a look at politics and into inflows and outflows and suppressing results for the week. ♪

scarlet: back to that breaking news. donald trump in talks to sell miss universe. alex truman just broke the story. give us the latest. >> earlier today, donald trump tweeted that he had bought the nbc news half of the missing

universe organization. trump and nbc owned this together and you may remember nbc decided they would not air the pageant and univision said they would not air miss universe after trump's comments about mexicans. at that point, people started to think this ownership structure doesn't seem to work so trump tweeted that he had consolidated the entirety of the steak. it's always. but he wrote at the end, stay tuned. he is simultaneously in talks to sell the entire company to wm eimg, which is a sports talent agency. scarlet: this is ari emanuel's company. >> correct. this is not a first for them. they actually bought the professional bull riders association last year. scarlet: ic synergy.

>> they know what to do with life events and our sources indicate they feel like they can make this universe even bigger. they already have a licensing agreement so this is not new to them. they are familiar with the business. alix: what about pricing? >> we don't know. releasedial terms were when trump indicated he bought half of his stake, which nbc confirmed today. i did speak with one person familiar with the world media, not particular this transaction. he guess it was probably less than $100 million. scarlet: is he going to make money on this? >> he is an original. he has owned this stake for a long time. alix: does he come along with the deal? >> he doesn't.

he is going to sell 100%. once the entire thing. it is hard perhaps to own this and run this with all this controversy as you are running for president. he has a lot to do. scarlet: perhaps ms. universe will be back on nbc or univision then. >> all of those things back on the table. scarlet: alex sherman breaking the news that donald trump in talks to sell the entirety of this universe. alix: another look at the top stories we're following. scarlet: a new policy at walmart making vendors hopping mad. a better deal.nt walmart says it's trying to simplify its relationships. alix: a big weekend ahead for netflix. its first original movie will be screened at the toronto

international film festival. the violent drama about an african warlord gives the company a chance at an academy award by netflix wants to get more people custom to watching theater quality films at home. netflix customers will be able to watch it beginning next month. scarlet: serena williams lost her match today in the u.s. open semifinal. the first calendar grand slam is now over. she faced off against roberta vinci this afternoon. the matchup was rescheduled for today and the chief economist at the redneck was just waiting that -- waiting that we see deflation and the prices of u.s. open finals. still ahead on the bloomberg market day, on the verge of a new gold rush. investors scooping up.

we take a look at that next. ♪

alix: welcome back. we want to get right to david, who is looking at all things markets. a relatively quiet day. david: relatively quiet. about here. talk this week is on track to be the best week we have had since late july. i will take you inside the bloomberg terminal. energy has been performing the worst all day, down 1.13% now. i want to flog a couple equities. helmerich and payne downgraded today. it is now down 4.3%. is downe casino company dramatically.

back to you. scarlet: thank you. we have 40 minutes left in the close and it looks like it will be an up week. alix: gold is one of the best alternative ats during the selloff. gold shares returned. now, eric.ining us money was going into gold. eric: shocker. not a lot of money but the fact they didn't lose money is almost didculous but really why this happen? if you look at the performance in august, gold was up 3%. this comes on the heels of fever pitch gold bashing. it has been three years. goldcyclic, everyone wrote off. it was up 3%, the market was down 5%. people forget gold is an

alternative investment. it has a zero correlation to the market, not negative correlation. you cannot expect it to go up in every crisis that when the big ones hit, it is a safe haven. treasuries also did very well. how much of that was actually short covering because there was so much sentiment for the actual sustained buying for recovery? : it's an underrated metric. vicks should go up. inverse etf should go up. old is not promising you to go up every 10 the market goes down. what gold is used for as alternative with no correlation to stocks and bonds. in serious times, it does do ok. if you look at the financial gold was up 11% of all

market was down 35%. gold has none of the darkness that this products -- oddness that vicks products does. we look at when this will turn around. $4 billion in the past three weeks. more crazy, emerging market etf's have gone from $117 billion to $175 billion. there are a few products taking in money. people are still allocating to emerging markets. alix: thank you so much for joining us. have a great weekend. lots more coming up on bloomberg market day. ♪

alix: welcome back. let's get straight to a look at the top headlines. joe biden is making it clear his decision about running for

president is more emotional than political. he appeared last night on the new late-night show. he said he's not ready to commit to a white house run. joe biden: i don't make any man or woman should run for president unless number one, they know exactly why they would want to be president and two, they can look at the people out there and say "i promise you, you have my entire heart, my soul, my energy, and my passion to do this." alix: he says he and his family us know we live from the death of his son in may. stillsays his family is reeling from the death of his son in may. the party had faced contested election in every district. four ministers from the central european nations of the czech republic, hungary, and

are relocating with hundred 60,000 migrants and introducing mandatory quotas for taking them in. they say the goal should be to the control of the borders. they are leading the push for the quotas. 40,000 migrants are expected to arrive over the coming weekend and 800,000 this year. a hungarian camera woman caught on tape kicking and tripping migrants, including a father and child as they scrambled across the border has apologized. in a letter published in a newspaper, she said she was only defending herself. video of her dripping a man and his child what viral and led to global condemnation. she has since been fired and is now under police investigation. than one week away from the feds most critical

policy decision and years and wall street could not be more divided over whether they will raise rates. mohamed a larry and exposed. explained -- explain to betty liu what members are thinking when they meet next week. >> this is how nervous are you about making a policy mistake? that is a judgment call it for us to be able to guess is really hard. it depends on the dynamics in what janet yellen feels about the idea of a policy intake and what's really hard as you can make a policy mistake on either side and that is like this is one of the closest calls i can ever remember for the fed. betty: how many of them you think are actually undecided right now? of them are. the reason why -- it's not a .omestic case

the domestic case for raising rates is solid. --y should have moved one when the domestic and international elements were aligned. now, they have a tug-of-war. the domestic case remains strong with international case is flashing yellow. that is why it is such a hard call. i wonder if you could talk and little about the yield curve . is it a trend that will continue? >> i think that reflects the notion that if they don't move now, they will move in december. people are realizing this will be part of the tightening. the fed wants us to stop obsessing about the first hike. it is 25 basis was at most.

in the terminal point will be well below history. with the fed is encouraging us to do is stop obsessing about the time of the first hike and look at the journey and if you put it in that context, it means you will get the behavior of the curve you are seeing. sachs --d yet, goldman goldman released this report where they say speaking about that volatility is exactly what we are not going to see the fed raise rates and all the volatility in the last couple weeks equals three interest rate hikes. because volatility has gone up, financial convictions have tightened. the market has done some of the work that the fed would otherwise do. they are right there. issue --t's part of a we're in the midst of paradigms.ng

we're going from a world in constant in awere wish to where markets are less comfortable about central bank's ability to increase volatility. transitiont is the we are in and it's important. let's talk about the oil markets. goldman put out another estimate . we are 100 million barrels above the five-year average. output is not going to scale back. stockpiles are going to keep them being added in the u.s.. is that reasonable? because, if possible the market has been unhinged. market has had an

earthquake on the supply side, on the demand side. the pricing dynamics have completely changed. they are right in saying don't underestimate the potential for volatility but $20 is really aggressive. i don't see oil going down to $20 unless there is a major global economic catastrophe. it is a much more volatile market for foreign exchange and emerging markets. bid to reshape the movie business begins in earnest sunday one fence at the toronto film festival sit down to the first original movie from netflix. emily chang joins me now for more. put in context of important this movie is for netflix.

emily: their first original movies. they had had a series of hits with their tv series but this is then taking it to another level and this movie is already getting oscar buzz. movie by they dark director who directed the first season of true detective. is actually looking like it could be a contender or best picture. it's are ready on a short list or oscars and it's interesting how the movie is coming out. it will be debuting in theaters the same day, at you can see it streaming on netflix so it will be interesting to see who goes to a this movie buth in order to qualify for an oscar, they must lead it in

theaters. it certainly puts their relationship with studios in a different place because they're paying studios to screen their dust stream their movies on netflix but on the other hand, doing original movies, they are also competing with the studios. so we see the partnering and rivalry with studios so it will be interesting to see how this movie plays and what kind of buzz it will get. alix: and taking a look at the strategies of netflix and amazon when it comes to original content. is there a different strategy for these two companies? emily: one netflix purchases a right to a movie, they have to purchase mobile rights so that takes netflix out of contention for a lot of movies that have already sold in certain territories. they bought the global rights for this movie for $12 million at amazon only has to pay for rights in north america based on

the way businesses set up. that means amazon can compete for other independent titles more easily than netflix. it will be interesting to see how important original movie content comes -- becomes to netflix and amazon as well. alix: you can make the argument also buzz is so important because everyone wants to go see the movie with the oscar buzz. emily: and movie theaters -- the head of riegel said why would i want to show a movie by netflix because why would anyone come to the theater? if i can watch a movie for free at home, that is what i'm going to choose to do. and ticket sales don't really matter to their business model at this point. so it will be interesting to see how many resources they put toward this original movie content. good stuff.

thank you so much. we can watch bloomberg west coming up at 4:30 p.m. eastern. coming up, you're watching the markets as they fluctuate between losses and gave today. date next week. we take a look at top movers coming up next. ♪

alix: now to a look at the top stories. cuba is making arrangements ahead of the pope's visit next saturday. the nation is releasing more than 3100 inmates. no political prisoners are being freed or those convicted of violent crimes. government issued similar

releases before papal visit in 2012 and 1998. wildfires raging in california at this hour and more evacuations have been ordered. share's deputies are going door-to-door. b -- share of stepping these are going door-to-door. government investigators say the failure of a nejra new british failure of an the engine on a british airways jet. debris from the engine was found on the runway. happened this engine type was introduced 20 years ago. time for a look at the markets. 15 minutes before the closing bell. julie, you are looking at the averages for the week. a relatively calm week. .ulie: ending on a calmer note

from the average over the past 10 days. major averages thinking on to gains for the moment as we head into the close. take a look at the dow for the past week. despite this up and down we have and hade rise almost 2% its best week since mid-march. a bit of a breather going into next week. there, we will likely see little more action. as you take a look at the map remainsy, energy throughout the day. utilities consuming throughout the day but it really was a story of commodities pulling things down as some other groups were on the rise. if you look at the energy group for the past week, it is a 17th weekly loss in the past 19.

most of press considering what we had happening with energy prices. take a look at oil for the week. down 2.7% and snapping a two-week winning streak. oil falling to as low as $20 a barrel and the worst-case scenario if we don't see the u.s. and opec nations cut production quickly enough. finally, i want to take a quick look at individual stocks. there was a note out from an analyst that talked about the a toof salmonella found at pulley location in minnesota. a chipotle location in minnesota. we can see when those headlines

cannot but now finishing higher. alix: thank you so much. i want to bring in joe weisenthal. in about 15 minutes, we are from the ua killer lineup of guests. is this guy so awesome? ae: he wrote this paper about market strategy developed. it says you should sell when markets drop below the 10 month moving average, buy them back when they rise above that line. it has a really good track record. this paper is pretty rigorous. one of the most downloaded papers of all time. he has a really big following and now he's really negative on the stock market so he has some interesting words. yes and some other stuff and it should be interesting. alix: what's fascinating is if

you read more about his work, he take this 10 month moving average and applies it to stocks, bonds, commodities, as well as foreign stocks. all of them except government bonds are pretty terrible, well below the average. joe: he's really negative and he hasn't several charts that will talk about where he says sentiment is very high. historically based on these letr measures he points to the percentage of ipos and profitable, things like that come easy for a lot of negative signs. i cannot wait to talk to him. alix: me too. especially to find out where he finds value. where are stocks cheap enough. joe: he has some pretty surprising calls. some markets you don't hear many

people bullish on. he has some pretty contrary and viewpoints. alix: i'm really looking forward to it. do not miss it. be sure to tune in at four clock p.m. eastern. if the fed, even does not raise interest rates next week, goldman sachs says the volatility has already done the work of three rate hikes. we explained that. ♪

alix: estimate that it has been a very difficult time for u.s. stocks. take a look as i chart this volatility for you. this yellow line is the volatility for currencies. really, all in all, volatility has been soaring. to influenceikely the fed's rate decision next week? joining me with more on this is chief evans and karl, economist for bloomberg intelligence. rachel, walk us through this chart. rachel: volatility soared. we hit a six-month high this week. bond and stock volatility has

also been increasing. in august, we had the devaluation of the chinese currency and block monday, which is when you saw bricks reach a peak and the move index. those have come down slightly since. currency volatility remains high. carl: you take everything we just discussed here and put that into a financial conditions model and it tells you financial conditions are becoming more restrictive. this, your -- and what of this volatility, the economy is where the fed needed to be to raise rates but they figure first do no harm. there is no harm in taking a

little more time to assess the feedback mechanism into the economy from all of this volatility. we saw a hint of that today with the michigan consumer sentiment number, which fell six points to a 12 month low. this is a concern to the fed because they don't want to see a diminished economic outlook, which further lengthens the timeline. alix: what will they learn in six weeks? carl: if consumer sentiments continues to fall, a sharper pullback in business sentiment surveys, things like the production management service. if they have a sense this mechanism is intensifying, they will push back even further. but probably things are ok. they can at least start the lift that process. the way that a cop -- i think it

will come in october but at the same time, lowering the trajectory. i think they take 25 basis point off across the board for this year, next year, and the following year. look aten you take a the volatility, what external factor is there to stabilize it? rachel: it's a question of sentiment coming gradually back down to positive levels. we also data out next week that might help with that. they should give us a read on have the u.s. economy is doing with regards to whether consumer sentiment is improving. even as we have seen employment figures get better. if we see some stability coming out of china, stock markets could seeg, we

volatility come back to normal levels here. alix: if the fed is looking up as volatility, what kind of communication do you think they will have to change in the next six weeks to telegraph to the market to stay with us. carl: we have the benefit of the defense statement and economic projections and the post meeting press conference. a lot of opportunities to refine the message. the goal is to show fewer rate increases in the future. and also, i would not be surprised to see yellen call for at themeeting conference october meeting. participants have been averse to

realizing october as a potential liftoff date because there is not a press conference. if she could take that off the table without declaring an -- ease -- a cease reallyt is going to be a exciting week, especially with all of the volatility. thank you so much. a special thanks to rachel and karl. , heng up on what you miss says there's a simple reason to invest in cash and bonds right now and not stocks. we will explain. ♪

alix: we are moments away from the closing bell. i am alix steel. joe: i am joe weisenthal. ♪

alix: u.s. stocks fluctuate after racing an earlier loss. treasuries rise for the first time in four days area joe: joe: the question is what did you miss. alix: how low can you go when it comes to oil? goldman sachs has possibly $20. others liars think it is drying up. joe: europe's yesterday crisis this refugee crisis. -- europe's refugee crisis. call dateher pla overall.- calm day