with after the biggest weekly advance in july. markets waiting for the fed interest rate decision thursday. betty: shares of apple's after the company says the sales of the iphone on pace to break the record of 10 million units sold last year of the iphone 6. volkswagenhairman of says how they plan to take advantage of the weaker euro. ♪ betty: good afternoon. i'm betty liu. mark: i am mark crumpton. thank you for joining us on this monday. u.s. stock market drifting lower concern on wall street and global markets what the fed is going to do on interest rates on thursday. a check of the screens on wall street shows all of the major outbreak -- major averages down over half a percent. dow jones at 16,348.

s&p at 1950. nasdaq at 4796. oil dropping for a six day in six sessions. the china slowdown hurting oil. nearly 3.5% atn 46.48. lls concerned as well. prices trading near a one-month low. right now gold futures are higher, up half a percent at $1109 $.40 per ounce. $1109.40. upty: the two year yield is slightly. the 10 and 30 year yield are down. there is some binding going on. in the currency markets, the dollar is weaker. going on. some buying

-- theead of all all-important decision by the fed. this is something we will talk about for the next few days. spoken toand i have people on both sides of the divide. they say because of what was going on in china that may be said might hold off. they say it they've pulled up it could show weakness. we will find out. a look at the top stories at this hour, breaking news are following. a professor is confirmed dead following a shooting at delta's the university in cleveland, mississippi. the school remains on lockdown and authorities are searching for an active shooter. students, faculty, and that being advised to take shelter. this is located near the arkansas border. germany's ike chancellor's the country can expect one million migrants to shear a loan.

this surge of migrants breaking down the open borders policy. germany is bringing back border control it abandoned 20 -- 30 years ago. there are sound reasons behind this change. do it safely in terms of security. i expect a temporary closure of the german boarder to facilitate process.vetting you look at social metrics, cell phones. you cannot do that with 10,000 people per day. so use low the flow down. i think that is how we do it safely. adjourninghoslovakia -- joining germany in security checks at the border. the british prime minister today visited a refugee camp and lebanon, close to the border with syria. said thatis cameron

they will take and 20,000 refugees over the next five years. is two years.a outfit -- tony abbott. he had condemned the management of the australian economy. the kentucky county clerk who was jailed for refusing to issue same text marriage license back at work on this monday. kim davis is promising not to issue -- interfere with her deputies to issue licenses to gay couples, but said they would not be authorized by her and the shooting validity. she was overcome with emotion while the testing her predicament. i am just a person that has been transformed by the grace of god and who wants to work, be with my family. i just want to serve my neighbors quietly without violating my conscious. she was released from jail

with strict orders not to interfere with her clerks issuing same-sex marriage licenses. bernie sanders surging to double-digit leads over hillary clinton in the early voting states of iowa and new hampshire. a cbs poll, sanders has a 10 percentage point lead over clinton among iowa democrats. he has a 22 point edge in neighboring new hampshire. is third int biden both states, even though he is not officially in the race --vice president biden. hayes was found guilty last month of manipulating a libor rate while working at ubs and the group. he is serving a 14-year term. a london judge may -- must decide whether to let the appeal go forward. if you own the irs more than $100 million, get the check in the mail. starting next year the agency will no longer accept checks or that amount.

-- for that amount. the big checks must be processed manually. that is a look at the top stories at this hour. mark: you want to say something, the check is in the mail, right? up, watch out hollywood. how toronto has become a hotbed for movie production and oscar contenders. work: the united auto union has made the choice of fiat. taking the weakest of the big three automakers this year. chinese stocks want today the most in three weeks. the shanghai composite dropping 2.7%. industrial output lighter than forecast. with tremendous volatility in china, many analysts looking at commodities to predict the countries future. globalhe head of commodity research at bank of

america merrill lynch joint bloomberg. a we think we won't be in more balanced market by year-end. honestly, i would not want to be short on oil. and weu have iron ore, see this change in the australian government. what is the bank of america merrill lynch call on the industrial metals that are the backbone of australia's economy? metals do not look great, but the correction is only just starting. we have seen some mines closed down. or the announcement recently. in oil, the response has been much more immediate, and the imbalance was much smaller to begin with. metals is a more structural story. metal is very important to keep in mind that china consumes half of the world's metals.

the consumption of iron ore in china is two times that of the u.s., yet the average chinese consumes 1/8 of the oil of the average american. much smaller consumption rate per capita. >> what is your view of china's economy and what the commodity demand will be going forward? >> clearly china's economy is slowing down pretty meaningfully , and we have seen that for a while. we will get power generation data. it has been pretty flat for a while. for most of the year. a lot of the indicators have been soft. at this point i think the chinese government will do more measures to stimulate the economy, maybe of fiscal package or monetary stimulus. i am not saying things are doing against chinating for the past 25 years has not been necessarily a winning strategy. tomorrow, how

important is what francisco is saying to the chinese -- if china is switching to a more demand-led economy, do we need to keep measuring the factory sector as the number one thing for them going forward? >> i think that is a very good point. if you are going to a serving economy, you need more cars on the road. at the end of the day, the united states is a service economy. we consume a lot of oil. >> to lower commodities help boost this economy? mostlyrvice economy is about health care and education. the financial sector -- technology a little bit different than the commodities cycle. i am not saying everything is great in china. i do not think that is the case, but equally we still have the view chinese growth should be averaging six percent-7% next

year. under those conditions, things should hold up. citigroup'sd before base case. tom: i am glad you bring this up. 50/50 global recession now moves to a baseline scenario for 2016. do you agree we could see 16% global gdp? >> it depends how you measure gdp. here is why commodities have been hit so hard. gdp nominal terms is barely growing. 8% growth average between 2001 and 2011. .8%.e past four years, critical.is this is the animal spirits. real gdp plus inflation on top of that, nominal gdp.

then you are just that to the dollar. so the key question for you as a commodity guy, is currency the nexus of what we should watch for and what janet yellen has to watch? >> absolutely. if the u.s. dollar continues to depreciate and inflation -- remember we have had massive strength in dollar against the yen, euro, commodity currencies and now potentially valuthe y uan. tom: you think of david will working with francisco b lanch, does janet yellen have to figure in as guest of the late 1990's strong dollar? a group ofis economist. they look at the unemployment rate going down. core inflation starting to pick up. we have to hike rates.

they are not thinking about the second and third round affect. it is not really their job either. they have said that, too. joiningancisco blanch tom keene on bloomberg " surveillance." betty: still ahead, keeping our eye on the markets trending lower today. bloombergimetime exclusive wednesday. don't miss a conversation with one of the world's top investors wednesday at :00 new york time on bloomberg. 6:00 new york time. ♪

betty: welcome back to thebetty:

bloomberg "market day." i am betty liu here with mark crumpton. mark: going straight to the newsroom with a look at the market. ramy inocencio here. ramy: markets scraping session lows. a few factors causing this. china's industrial output came in weaker than expected over the weekend. the fed watchers watching for the interest rates, potentially hiking, maybe not. the s&p 500, dow, and nasdaq all losing similar percentage points. cutting to the bloomberg terminal to look at the health of the s&p 500. nine of the index's 10 sectors are low with materials and energies and the biggest slackers. that is in part due to the china data i mentioned. utilities in the green for the most part, but we see it paring the gains near the flatlined right now. , asng a look at alibaba

well as yahoo!. the chinese firm could fall another 15% as china -- as volume falls. right now alibaba down by nearly 3.9%. by 3.25%.n one interesting thing to note, 45 of 52 analysts give alibaba a buy rating of a price target of $93.23. the stock rose that asked to 3.63 below the market price. 63.53. the market had been even further below, but when it was hitting its lowest in rate 2013 but has losses.ired the this is after morgan stanley downgraded the stock to eat will wait from overweight.

it cut the price target to $9.50 from 17.50 based into last week's probe into accounting issue. s. marvell not doing well. a cautious 26 page report on steak and shake. -- on shake shack. having anwe're average unit volume is falling after it expands further and further outside of manhattan. should decline to roughly 50%. that is a look at the stocks right now. mark: every time someone mentions shake shack i just get hungry. lunchtime. a look at the top stories at this hour. he spoke working on a virtual reality app for phones.

it would support 360 degree videos and change how users the video. mark zuckerberg has called virtual reality the next day computer platform. mark: a private equity firm has solera./ buy the offer represents a 13% premium to the closing price friday. betty: arnold schwarzenegger will be the new host of nbc's " celebrity apprentice" when the show returns next season. he will replace donald trump who is busy running for president. trump and the network broke up after he made derogatory comments about mexican immigrants. it is sort of like they are flipping. politician. mark: former governor. reality tv star running for president of the united states.

betty: i don't know, if you are fired on his -- in his accent. mark: did you really just do that? betty: yes, it is a monday. mark: this will be interesting. even though the former governor offers -- box box office star, his reputation took a hit because of the personal malfeasance on his part. i am wondering how that will translate to nbc as it seeks to ers thatome of the view like to watch donald trump. clearly scandal, it is good tv. donald trump has had issues throughout his career and does not seem to be offering him from attracting voters in the u.s.. really? there

bar inay be a lower politics. that said, i guess nbc is hitching their wagon to arnold schwarzenegger. we will see if he can bring back the viewers. betty: i still have not seen the latest terminator movie. i was on an airplane and it was an option, but i just could not. apple says it is on pace to smash records with the latest iphone. mark: that story is next. ♪

mark: a look at that they bridge in san francisco, california or in oakland, california. --look at the bay bridge.

apple is reporting preorders for the iphone 6s and to smash last year's orders at 10 million sold. mark: cory johnson is in san francisco. the numbers are correct, they will tell you. if they don't tell you, maybe the numbers are not so good. in for the past iphone releases, the first 24 hours they have told us one day morning what the first 24 hours of sales were. acceptone 5s did not preorders. very interesting they did not tell us whether or not the new iphone top the 4 million iphone 6 and six plus orders from a little over a year ago. there is one more week in the

quarter. the question is open, what is this going to mean for iphone sales in the quarter that and in september and the quarter that will end in december? they did not tell us in the past. that may suggest a number is not that strong. here is something that may sit just the number is strong, and that is the map. if you look at the place they are selling phones on day one, the biggest difference this time over last time, when you look at the map, you see china. china was not the place the iphone was sold on day one last year. yes, it was sold in october a month after it was released. this time they will. as a result, there is some hope that in spite of not getting a number today, maybe the numbers were not to back. that is really important. the launch in china led to a new dependence of apples dependence

on china and chinese sales. chinese revenue in recent they have topped 20% of overall revenues for apple for just sales to china. that is a big deal. betty: what about anecdotally and the buzz? iphone 6. my now they have a new version. --what the overall does? is the overall buzz? cory: you just got it? you are so on top of it. you can come on in. it is all right. these iphone sales are so important to the company. the company not only relies on china but the iphone increasingly. over six percent of revenues coming from the iphones in recent years. as time has gone on, it has gotten to be such a big business

or the world, arguably the biggest products in the world. whether you want to compare it to automobiles or anything else. apple depends on this so greatly. the real question is, can they get to the 20% year-over-year sales growth while the sales of iphones might grow only single , and weear-over-year did not get the clue we were hoping on from -- hoping for from apple this morning. see you asood to always. cory johnson in san francisco. i am signing off now. mark: coming up, automakers trying to outdo one another. the peaks of world premiere at the frankfurt motor show this week. that story next. worldak peaks at the premiere in frankfurt motor show this week. ♪

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about at the top of the hour, a professor confirmed dead after a shooting at delta state university in cleveland, mississippi. the school remains on the down and authorities are searching for an active shooter in what is looks person describes as quote an active situation. the university is located in the delta region near the arkansas border. more details on this story as soon as we get them. the job of cleaning up international star -- soccer is far from over according to attorney general loretta lynch. she joined her swiss counterpart organization.fifa remainsnvestigation active and is ongoing, and has in fact expanded since may. as i made clear in the original announcement, the scope of the investigation is not limited, and we are following the evidence where it leads. i am grateful for the sick get

cooperation and sits dental evidence we have received from all quarters. based on that operation and new evidence, we do purse -- anticipate pursuing additional charges against individuals and entities. 14k: the u.s. indicted officials in may. andcials say bribing racketeering is a $150 million scandal. industrial output rose in august but fell short of estimates. invest in china, the first eight months of the year increased at this lowest pace since 2000. investors reacted. chinese stocks with the worst day in three weeks. the shanghai composite down more than 6%. google has hired an automotive executive to head of the driverless car. he has been president of online auto buying service and work for

four. google's self driving cars have artie long more than one million miles in test. those of the top stories at this hour. speaking of cars, major automakers will unveil the best plans for 2016 and beyond. earlier today, hans nichols caught up with the chairman of --of volkswagenr fink for an exclusive interview. >> it is one of the most important vehicles for the band -- france. it is being made in germany. it will be produced in china and mexico and in russia. it is a tremendously important vehicle for us. your contract has been expanded. you have a new chairman. have you put a difficult time

behind you? >> my contract has not been extended. the executive committee has been proposed to be extended by the supervisory board. when it comes to the corporation let me say for more than 14 years we have been working together look -- working working onosely business matters. cooperation on a personal level as well. reason -- letthis me say this is a good sign for the workplace. hans: when you talk about the changes, you are delegating more authority down the chain. what is behind that? >> lets me say during the past volkswagen:00 and --

has grown dramatically. the employee numbers have almost doubled. we have to consider new structures. some decisions will be decentralized. hans: will there be changes in overall headcount? will there be job losses at volkswagen? there will be no job losses. there is nothing planned in this. let me stress we want to increase unit sales and sales with the headcount that will remain constant. : you have mentioned china several times. we obviously have a slow down there. to what extent is that concerning you? >> we are convinced china will , no longer inow two digits always, but it will

continue to grow, particularly in the west. we are getting ready for this. there is still growth, which is why in the northwest, we have set up a new factory -- factory. the plan is to build the budget car, particularly for china. : you could not see exporting cars from china, the demand will be domestic. >> volume will continue to be 3.7 6 million cars we sold last year. we are the market leader in china and intend to remain there. look at theou luxury brands, you have had to dial back. is luxury more at risk? convinced once

the self cleansing effect has theved the corruption of chinese will buy beautiful watches and cars again. does that mean brazil is a bigger concern for you? is in al at the moment downturn. we have had factories for more than 60 years in brazil. i remain convinced it will be -- there will be light at the end of the tunnel. fiat potentially merging with general motors, what are your thoughts on that? >> we are following this with a great deal of interest. i do not believe to put in and at different manner, we are following that with interest. following that with interest in looking at the brim that they may spin off, is there

anything that you may be interested in? >> at the moment we have no interest going in that direction. hans: we will shift to another competitor, namely tesla and potentially google. we hear about the challenge you will get from silicon valley. how do you respond? group is selling a lots of plug-in hybrid vehicles and electric mobility. tonight we will show you what an porsche looks like with a range of 500 kilometers with battery systems, and we are working under high pressure on battery systems offering greater range even in silicon valley, and i am firmly convinced that battery electric vehicles will come, not immediately at high sales numbers, and we are pleased because google will show

how interesting this business is. to my mind, the small electric vehicles will see them come in as competitors early on. however, i do not believe on the combustion engine sector they will be successful in the near future because a lot of know-how is needed. mark: the ceo of volkswagen speaking exclusively with hans nichols. ratesahead, when interest go up, which stocks are the best to own? we will dig into a new goldman sachs report next. ♪

mark: welcome back to the bloomberg "market day."

i am mark crumpton in new york. of the markets. ramy inocencio in the newsroom. are running on session lows. they are up a little bit higher. investors are concerned over a china slowdown. the industrial output came in weaker than expected over the weekend, and investors cautiously waiting on the fed .ith interest rate the s&p 500, as well as the nasdaq are down the most i about point or percent. a look about the, taking at what analysts are thinking about in terms of the timing for a said rate rise. -- the s&p as well as the nasdaq are down the most at .4%. there is a 28% probability of a rate rise this week. 72% of those that think a rate is coming think it will be a cord or percent or less. by of traders expect a move

september. into whatg look people might be thinking about in terms of the fed rate rise. materials as well as energy the biggest lacquers. consumer discretionary close behind led by falls in the michaeld doubled -- kors. falling backtals on today's lows, and that includes copper. copper down by nearly 2%. the continuous flight overnight and through the morning. this is after the week chinese production. china is the world's biggest .ndustrial metals consumers free format for and taking a hit as well. it is down by 1.5% aswell right now. acmoran.ort macquarie

goldman sachs said the world oversupply is bigger than first thought. this could pull prices to $20 per barrel. this is 30% down from the closing peak in june. mark: thank you. taking a look at the european market close. falling forstocks third day, longest losing ground in recycling three weeks. china, the, china data missing on industrial production and investment. the fed, need i say more? stocks falling because of the chinese data. interesting stat. since the fed last raised rates

june 2006 the benchmark in europe has actually risen by 12% . is it going to rise through the is a 42he year? yes it the average of nine forecast compiled a bloomberg. it will gain 13% in the next 3.5 months. that is what they say. compelled by what? earnings. so say the analysts we have spoken to a bloomberg. here are some of the big movers, the french broadcaster. the government want reintroduce evening advertising on won't-owned television -- reintroduced evening advertising on state-owned television. the news executive may raise capital as he over holds the business glencore. we want to show you the nature of the mining industry. two weeks ago biggest decline

ever. last week best week in 2.5 years. the at how they started monday session, down by 4.2%. disappointing information from china. china, said. fed, china. that is all you will heal me say. economic data shows china's economy following -- falling deeper into the rough patch. the chinese economy is continuing to cool and continuing to change. considering the data we got, policymakers seem confident they can ride the transition through. china is also embarking on the biggest overhaul in the public sector and over 20 years. essentially channeling or encouraging more private capital into state owned enterprises to

hopefully make it or use of the assets. so expect a more detailed blueprint. tens of thousands of companies. whether that goes smoothly or how much further, it is a transition. we will leave it there. mark: david ingles in hong kong. as consensus bill the federal reserve will likely not to raise -- raisees -- raise rates, investors are preparing just in case. david costed recommended stocks to own and stocks to avoid once rates do rise. bloomberg analyst julie hayes joins me in studio. it is all about the balance sheet. a lot of liability in cash, they tend to perform well when rates hike.

companies you want to avoid are those that have loading debt. the interest rates will rise a lot higher than if you have straight. rates. fixed chipotle, dollar tree, apple, black rock, google -- google. mark: quality stocks. quality stocks for a rate hike. in your store you point out following the first rate hike in 1994, 2004, companies posting stronger balance sheet outperformed by 5% on average. about 5% can really turn into a lot in your portfolio for any investor. they there are some recommend you might want to stay away from. a, cocoof them even cola, mcdonald's, and general

motors. there were a lot of other names on the list, but those are the ones that stood out to me. we are talking about strong companies. they have been having problems. a lot of them have still been beaten up going back to 2007 in 2008. still having trouble gaining traction because of the recession. >> right. now those that may have been having trouble, now may be the time to add them to your portfolio. is puttinggoldman these things together, besides the balance sheet, any other intangibles they are looking at? of them they just call quality stocks. they do not elaborate on it. they want to keep that somewhat private when they're talking to reporters like me. i noticed something about apple. what is it about apple laptops

out in this? story? to have aossible strong balance sheet but a lot of floating-rate debt, to. it has a lot of cash, and definitely has the fortress of the balance sheet. i was begin to betty liu in the past half hour, and i am sure you have heard it as well, there seems to be a divide on whether or not people believe the fed is going to move or not going to move? about a you hearing? >> 20% chance right now. one of the people i talked to a team october last week. he has been staunch on september for the longest of time. a lot of people shifting away at the last second. it will be interesting. mark: the story at bloomberg.com . -- the stocksise

to avoid went the fed i raising rates. it hollywood north. toronto is a hotbed for movie production and the summer film festival has become a key vehicle for oscar contenders. we will take you there next. ♪

mark: in today's " the good life" heading to the toronto film festival. this year bloomberg posted of business of entertainment event. one of the films grained -- screen was about a gay new jersey police officer trying to get her pension benefit transfer

to her partner. we started out by the director and started asking about the cast that includes julianne moore and ellen page. it is critically important to have a cast like this. we have challenging material aimed squarely at the adult. need to get people into the >> thisand a cast like attracts the audience. >>we are seeing more lgbt stories and reality tv shows about caitlin, do you think that is helping and will help drive audiences to a film like this about these issues are in people's homes and people have access and will inspire them to go to the theaters as well? >> i think it will. i think it is a great time to be an audience member.

a special moment. we are at the toronto film festival and the 40th anniversary, so very special. go bring this film here you >> the toronto film festival is a very special event. the audiences are enthusiastic, which is a big deal. and the liberal in their thinking. -- and they are liberal in their thinking. it is a wonderful town. film was actually sold at the berlin film festival earlier this year. it is distributed by lions gate. there are so many different opportunities for distribution for independent film makers in addition to the studios and other theatrical releases we have the streaming platforms like netflix and amazon. is it a good time for independent filmmakers? >> i think it is a great time and i think it will get even

better as we learn more about how to utilize streaming platforms and market audiences that tend toward streaming in that environment. >> you want eyeballs on the project, but you also want to make money, so that is one of the challenges. and ironing that out is not resolved yet. the way to do that is going to have a massive influence not only in what we see and how we make money -- but also how we make money. more a director has to think like a business person. you shot this film in new york because of the state tax credits . how important are the tax credits in filmmaking today? >> they are a huge factor, not only in where the film gets made but

if it gets made. making films a battle of dollars. his: the director talking film "freeheld." up, the airbus ceo spoke to bloomberg's matt miller. we will head to mobile, alabama, where the european airbus -- airplane giant opening its first factory in the united states. as we head to break, all eyes appeared to be on thursday, whether or not the fed will raise interest rates. stocks are down about .4% on average. we continue in just a moment. ♪

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mark: it is 11:00 a.m. in san francisco and 2:00 p.m. in new york. it is one of the federal reserve's most anticipating --

anticipated meetings -- the decision on whether or not to raise interest rates. economists are split on what the outcome will be. scarlet: we will take you to where the euro space giant is opening its factoring mobile, alabama. fiat chryslersing for union negotiations. why the uaw is skipping the three biggest automakers this year. good day from bloomberg headquarters in new york. i'm mark crumpton with scarlet fu. we will talk to our chief economist from bloomberg economics in just a moment. there seems to be a split. scarlet:bl