day." apple is set to smash records with the latest iphone. preorders are exceptionally strong. we will break down those numbers. could not signal a run in 2016. scarlet: good afternoon, everyone. martha: it has been an interesting ride today. a check of the screen shows moretors seem to be paying attention to the upcoming federal reserve meeting and whether there will be federal interest rates. the averages are down about .4%. the s&p 500 at 1951. the dow jones industrial average at 1659.

the nasdaq composite at 4804. let's take a quick look at treasuries if we can. take a look at the 10 year. the yield is at 2.81%. 30 year bond at 32.5%. talking in i were the last hour about oil. nymex crude is now down just over 1%. crude is also falling as well. we were talking about what is going on in china and demand and supply issues there. an impact onaving the commodity center. we are searching for a catalyst in china and production data, fairly weak. it boils down to a lack of direction and a struggle for some kind of direction as we wait for the fed to begin its meeting and come out with an announcement thursday afternoon. let's get you a look at the stories making headlines this hour.

mark: officials believe a professor in mississippi is no longer on campus. according to the associated the mississippi school remains on lockdown. students, faculty, and staff -- the university in mississippi's delta region in the arkansas and mississippi eight line. california,northern trying to gain the upper hand that left one person dead and got into hundreds of homes and businesses 20 miles north of the valley. another new prime minister in australia. australia's sixth .eader scarlet: marchionne plans to

attend and will stay in the u.s. instead to attend to business matters. the union had picked chrysler as its target. , to get theeakest best terms. deals with fiat chrysler, expire at midnight. county clerktucky jailed is back at work. kim davis promises not to interfere with her deputies interviewing -- issuing marriage licenses to gay couples but declares they will not be authorized with her. she was overcome with emotion while discussing her predicament at this moment -- this morning. no europe it i'm just a person, by the grace of god, who

.ants to work strict orders from the federal judge and other clerks issuing same-sex marriage licenses. the governor, and the county, all say the licenses are valid. the former trader sent to jail for rigging interest rates is appealing the sentence. found guilty last month. he is serving a 14 year term. a london judge must decide whether to appeal. mark: a holding pattern ahead of the fed decision. says it would be good for the market. scarlet: rod smith is the chief -- you arestrategist responsible for developing

things for your clients. what are they asking you as -- during the countdown to the fed decision? rod: they are asking me endlessly why are people so focused on the fed decision? my answer has been consistent. i am not sure why. in our view at riverfront and in my personal view, it just is not as important as everyone is making it out to be. what is really important, with any central bank, is to understand what the purpose is. i am very clear and i think janet yellen has been incredibly clear about what the fed's's purpose is, to promote growth in the u.s. economy and do nothing that would jeopardize that. a redk there is a bit of herring going on. the market is caving poorly.

there are reasons why the market is down. mark: what are those reasons? ad: first of all, we have legitimate global recession, not in economies, but in a sector of the economy. in fact, for different reasons. we have a global recession going on with major declines in commodities prices, very related to china's lack of demand for infrastructure investment. a recession going on in the oil patch, the result of significant clients in the oil prices, a combination of the saudi's decision and our own to have more oil. that is one sector that has caused a ripple effect. are wondering, will it lead to a recession of the overall economy? won't,re right that it this is a correction.

if we are wrong, we have to face up to the fact that this correction is not over yet. i do not think the fed's's decision is the big call we have to make. scarlet: let's talk about the drop in commodity prices. two adjustments reflect actual growth or the worst-case scenario? in other words, what is priced in right now? >> that is a good question. we have spent a lot of time trying to think about that. at chair prices connected with china's's growth, energy, stocks, emerging markets, they are all back to .009 lows relative clearly, a lot. we have atrules ritter -- at riverfront is, do not fight powerful trends.

one thing we are trying to get is exactly that question. can we put conservative assumptions about earnings and have them look cheap? we have not come to that conclusion so far. i would say we are getting closer. is not share prices better value if earnings are falling just as much. it is about the earnings forecast. i would say we have got time to make that calculation. i do not think things will change anytime soon. much lower range for girls -- for oil and other commodities prices. one question we have been asking in case there is a rate hike, what impact with that have? rod: we want to separate any turmoil that might exist in the from the legitimate turmoil in the stock market and we need to understand what the stock market is.

the stock market in china doubled when the economy was slowing and then lost all of that when the economy was slowing. people are worried about the its china deep hate currency a little bit from the dollar, which again to me is a smart thing to do. if your economy is not going the way of the u.s. economy, you do not want the if it -- interest rate structure paid to the dollar. i cannot but it's how people will react in the short term. i would suggest i do not see a quarter point rate hike in the u.s. as a major factor for the chinese economy. i think it may has and him -- a currencies, and it may cause some peripheral emerging-market currencies to weaken further. this time around, a lot more is discounted ahead of that happening. scarlet: thank you so much, rod smyth, joining us from richmond, virginia. coming up, vice president

biden, is he inching ever closer to launching a presidential campaign? that story is next. ♪

scarlet: welcome back. i'm scarlet fu here with mark crumpton. about 45 minutes or so before the closed her how do we look? in that are still worse thenand expected, china data has been hanging over us. here in the u.s., investors are

cautious's -- as we head into the september fed meeting. you can see on your screen the markets are generally speaking down. there are a few gainers. let's head to the bloomberg terminal to want to show you lonely leaders on the dow right now. you can see here that apple, johnson & johnson, merck, and caterpillar are the sole standouts. the others are all in the red. a closer look first off that apple. though it sold off, it is still the top of side contributor to the s&p 500, right now up by one percent. gene munster thinks sales of its new iphone plus model could reach between 12 million to 13 million units. that would beat last year passes record opening sales when apple sold 10 million of its iphone 6 in the first week and added

china to the first week of sales for the first time. iphones are an important set 57%, with 2015 revenue. 56 percent there. moving on, jug and consumer products giant johnson & johnson also moving today up i've .5% today. it is looking to invest his $34 billion cash while into m&a deals. devices and potentially vision care might be two potential areas of focus for the acquisition. eagle shares are also moving this afternoon, down by 1.7%. this is after the stock was .owngraded from neutral to buy really hovering pennies above its lowest close this past june. in $18 target on american eagle over the next 12 months.

that is a wrap of what i am looking at now. mark: thank you, ramy. scarlet: bernie sanders is surging to double-digit leads in hillary clinton -- against hillary clinton in iowa and new hampshire. a new poll so's desk shows sanders is ahead of clinton among i would democrats and the senator has a 22% point edge in new hampshire as well. biden, he is third in both states even though he is not officially in the race. mark: donald is getting out of .he beauty pageant business trump sold the franchise to the mega-talent agency. the candidate became the sole owner of the pageant after buying out nbc universal. they had a messy breakup after againstaraging remarks mexican immigrants. scarlet: arnold schwarzenegger is the new host of nbc's "the

apprentice." really? [laughter] replacing donald trump who, as you know, is running for president. trump had a nasty breakups with -- breakup with them. vice president biden coming off of a whirlwind. he is making his appearance on the late show with stephen colbert. scarlet: he expressed his doubts about a run. ties asked -- t suggest otherwise. we're joined now with more. >> you are fired. i think arnold is perfect for that gig. he will be awesome. baby -- astaster, la vista, baby.

i think they will find things to do. pretty desperate the of opportunities for the trumps. not if joe biden has anything to do with it. robert wolfe is the bundler we are about. he and joe biden met up, secretly? just the two of them and known was supposed to know about it but then someone found out. it is now public. these things happen. if you are about to run for president or thinking about running for president, you have got to raise money. joe biden came from a small state. he was on the senate former wrote -- relations committee. in politics for a long time. go for moneyace to with the people who raised a lot of money for president obama. robert wolf did that as well as everybody. officially at this moment

on hillary clinton's side. one great thing biden would want take away disaffected clinton donors and bring them over to his side. the beginning of a courtship. there will be others. you see biden reaching out to someone in the clinton camp and saying hey, maybe would be better off with me. hek: is there any way reached out to the vice president? the vice president seemingly made it clear they are still reeling from the death of their son, beau -- bo. to be 100% need locked into becoming president and he said he is not there. >> he has been overwhelmed by what is happening. he started to do more events and

go around the country. donors and elected officials and voters, coverage in the press, signs of sympathy, people asking him to run. a hero's welcome in pittsburgh. quite everywhere he has gone. event, did the 9/11 people chanting. this moment could be his moment and he wants his family to be taken care of. he wants to feeling he can do this 100%. he wants to feel he they can. everyone around him says that every day, he gets a little ulcer. wrote, not just about the wolf meeting, but the people around him now or thinking rather than having to make this decision at the end of this month or early next month, they now think it is possible they could wait and get in a little bit later, which would give biden and his family more time to heal, and more time to get the infrastructure in place to make this thing happen.

mark: all right. p.m. weekdays here on bloomberg tv. thank you so much. scarlet: you can read the full feeds on bloomberg politics.com. still ahead, how well is the new selling? we will dig deeper into new sales figures. ♪

scarlet: the dominance of apple's's iphone shows no signs of slowing down. track to top records. mark: apple did not get figures for preorders in the first 24 hours. cory johnson joins us from san francisco with more on this story. they are saying the sales of the

product are through the roof. his applicants -- expecting that considering so many iphones are already out there? cory: they need to raise the roof. that is the big question. everyone of the last five thenes, they told us what preorder order number was in the first 24 hours. of annspicuous lack actual number that we would know about preorders in the first 24 hours, suggests maybe they're not blockbuster numbers. apple is also raising the bar a little bit by having one a week of orders. this phone was shipped on the 24th. that is one week later than last year's iphone or iphone 6 plus. one thing it does have in its advantage, shipping product in

china. apple is releasing its core device, the apple iphone. orders were excepted on china. day one shipments, orders will be delivered in china of this new iphone. for that reason alone, everyone has every reason to expect the orders will in fact top last year's because their shipping in the market. that is the second most for the in the nine states crucially important. well over 25 percent of sales have been from sales into china of all apple products, principally the iphone. what does it mean in terms of production? to supplyve enough everyone in china who wants a phone? that is a sticking point for previous releases. ory: the first few weeks of sales are really governed by that exact thing, how many

phones can may make? that the demand is higher than the 12 -- 10 or 12 or whatever the number will be. if the demand will be higher than that number. the question is, when it goes forward in the for -- first quarter, how many can they sell? -- of thef the full phone might suggest, and there are analysts out there, they have written that the size of the phone suggest that in fact there is not a lot of retooling to be done and they might have the components to sell a lot more at the beginning. the new technology they are using at the phone, the new glass they're using on the phone, the new aluminum's, it might hinder that process. phone arelogy in the indeed new technologies that will limit the advancement of that production of the first unit. mark: given the volatility in

the chinese economy, china will be able to have capital booth sales? cory: i think that is a act -- that is a good question. the devaluation of the lawn raises the price out of the country. while the effect of the economy of the stock market has thought in china that might not be so great for the chinese economy, the economic slowdown is a serious thing. the devaluation could have a negative effect on sales. much.t: thank you so mark, i am gone. you have got more. ♪

mark: welcome back to the last month has seen markets in a slowdown, which has many

analysts looking at commodities to predict where china may be headed next. michael mckee of bloomberg surveillance asked francisco, the head of global commodities america for bank of merrill lynch, to assess how commodities are faring. >> can -- industrial metals do not too great. it is only just starting. we are seeing mines closed down -- min. the balance was much smaller to begin with. remember when we think about metals, it is important to keep in mind that china consumes half of the world's metals. capita isption per two times that of the u.s. the average chinese consumes 1/8 of the oil of the average american. 1/5 of the japanese.

it is a little smaller consumption rate per capita. michael: what is your view of china's economy and what its economy demand will be going forward? francisco: the economies are slowing down pretty meaningfully. we have seen it for a while. look at data or has been pretty flat for quite a while. it has been flat for most of the year. a lot of indicators are pretty soft. think the chinese government will do more measures to stimulate the economy. maybe a fiscal package. maybe more monetary stimulus. i am not saying things will be great. betting against china for the last 20 years has not been necessarily a winning strategy. michael: 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? francisco: that is a good point. at the end of the day, we consume a lot of oil here, as do europeans. lower prices helped boost the economy? francisco: the economy is about education and all those kinds of fund -- fun things. it is 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 take the view that chinese growth, we should be averaging, six or 7% each year. under those conditions, things should hold up. you mentioned before citigroup's cases. tom: i am glad you are bringing this up. a 50-50 global recession now

moves to it being a baseline scenario for 2016. do you agree we could see 3% or 4% global gdp? with gdp, and here is why commodities have been hit so hard. is still growing. 8%bal gdp, it averaged between 2001 and 2011. in the last four years, we average .8. tom: this is why we love francisco. animals.he real gdp plus inflation on top of that and nominal gdp. then do you adjust back to the dollar? the key question for you as a commodity guy, is currencies the nexus of what we should watch for and what janet yellen has to watch?

francisco: absolutely. if it continues to depreciate, and we see deflation, and remember, against the euro and the commodity currencies, now potentially the one -- tom: you think of david working with francisco, does janet yellen on thursday have to filter in a guesstimate of a late 1990's strong dollar? francisco: i think the fed is a group of economists. the employment rate is going down. core inflation is starting to pick up. they are not thinking about the third round. it is not really their job either. they have said that. i am not sure the fed will factor that in. we are speaking to the u.s. and the house, that the fed is most

likely to hydrate this week. look. it is very possible they may have to slow down the pace of take, the market cannot the first round. on the flipside, i think, you know, the biggest challenge we will face is there may not be enough dollars out there. speaking witho bloomberg surveillance this morning. let's get straight to some of the top headlines we are following on this monday. in egypt, at least 12 people were killed when security forces mistakingly open fire on mexican tourists. and theck happened government says security forces or tracking terrorists at the time. they had wandered into a restricted area. russia is escalating tensions with the u.s. by utilizing -- over iran and iraq to fly military equipment and personnel

into syria, according to the new york times, which also reports the move openly defies u.s. efforts to block shipments into the region. the obama administration had initially hoped to stifle efforts to move equipment into syria after bulgaria announced it would close its airspace into incoming flights. the european union companies struggling with the flood of refugees has announced plans to fortify their frontiers. that comes a day after germany reinstated border controls in an attempt to slow down the influx. austria and slovakia both say they will send more troops to secure their borders. the also plan to beef up controls. faults like and is looking to make some aspect of the eu crisis a win for the company and incoming refugees. in an exclusive interview, chairman of europe's's top automaker spoke with hans nichols at the motor show.

>> we follow it intensively from all of our locations and sites, a lot of holly -- highly qualified sites are coming over. it is an opportunity to use these highly skilled people to give them jobs at our sites and plants. we see opportunities to train other refugees who are not as skilled to this will be our contribution to deal with a refugee crisis. mark: full slagging brands include lamborghini. those are some of your top stories at this hour. as we count down to the fed's meeting this week, why do stocks and the economy seemed to be heading in different directions? that story is next. ♪

mark: welcome back. it is time to look at the markets now 15 minutes before the closing bell. good afternoon. are still in negative territory, but slightly off the session lows. fed.ay, china and the out of the china industrial output, it came out weaker than expected in the weekend. investors are cautious as we head into the september fed meeting this thursday. and a possible rate rise. jump in with me one more time thelook at the health of s&p's 10 sectors. nine of them have been trading lower all day today and it still continues to be the story. materials and energies are the biggest laggards because of point down those sector utilities in the green holiday pet up now by about .15 percent. looking at commodities, let's

head over to copper, which has been down all day after the week chinese production i was telling you about. biggest the world's's and just real metal consumer, 45% of the world's is copper each year. then -- morewn than one and -- more than 1.5%. the fifth time in six days in new york, down nearly 1.2%, in part from concern the chinese slowdown will deepen. goldman sachs also said the world's is oversupply is bigger than first thought and that could pull prices to $20 per barrel. oil is down almost 30% from its closing peak in june. let's look at notable equity movers monday. first, alibaba and yahoo!. the chinese firm could fall another 50%. note, analysts

still give the company a buy rating with a price target of $93 and $.20. the stock closed friday at $64 and change below its ipo prices. apple was on the rise today. to top up site contributor the s&p 500. sales of its new iphone plus models reached between 12 million to 13 million units, last year passes opening sales of about 10 million units. that is a wrap of the markets as we had to the close. the economy versus the stock market as we approach the next step in the next few days. stocks plummeted while economic data appeared strong. recent declines say about the state of the u.s. market? , spokenaging director about it on bloomberg television earlier today. sam: there is a lot of concern as to whether the market decline

is foreshadowing a potential recession in the u.s. we got the first glimpse of that in the first and second quarter this year when it was expected earnings would be accepted at the end of this year and a preceded ore accompanied economic recessions, and we also know basically every recession since world war ii has been accompanied by either a bear market or a correction. for that around and you will find three times the number of corrections and bear markets the numbered versus of recessions. you cannot assume a market decline will then lead to a recession. connect theing to dos between fed policy and u.s. markets. how does the timing of when the fed decides to start raising rates affect your strategy, if it does at all?

>> it does not too much. it is something we have been anticipating for at least a year. there are a lot of market who want them to get done with it already. take line toss, maybe a 45% chance we will do it this month versus 55% probability they will wait until at least december. i do not think anybody will be spooked by a 25 basis point increase when actually the historical relationship between core cpi and the fed funds rate implies we should be closer to 3% van 0%. >> let's talk about transitioning. treasuries are gaining. as olivia and i were talking about, the gains have shifted that it is unlikely because of volatility. with the odds lower of a federated hike this week, if the fed were to move, some say would have a major impact on the market. would that be the case in equities? >> i do not think it would have

that impact on equities. what we typically find is leading up to the first rate increase, the market is resilient. on average, all 10 sectors in the s&p have posted positive total returns. in the six months after, historically, what we find is the gains are much more muted. 2.5% or nine only of the 10 sectors have had positive results, with financials the only one negative territory. i would tend to say, yes, now the clock will start here and as to whether investors will become concerned. >> where are the buying opportunities now? sam: i think you have good opportunities focused mainly in the quality categories. look for those companies, the s&p quality rankings, because as we move into the rate height -- rate tightening program,

butsing at a discount, still offering a relatively attractive yield. >> i am looking at relative strength of some of the sectors. consumer discretionary companies doing better than the rest of the broader market. is that set to continue in a rate hiking cycle? >> you do find that usually technology is among the better performers. consumer discretionary does do relatively well. growth in particular does relatively well because most of the assumptions are that as rates are two titan, it slows economic growth and increases the likelihood of a deeper decline for stock markets. value stocks tend to do well coming out of bear markets, aree as the growth stocks the ones favored by investors. sam speaking earlier today with my colleagues, olivia

sterns and scarlet fu. let's look at some of the top stories making headlines at this hour. deutsche bank expected to announce the equity trading's chief will be leaving the company. he is said to be leaving for personal reasons. they have not named a replacement for the outgoing equities chief. google hired an auto industry executive to head up its driverless car unit. john will join later this month. he has been president of the online car service chu card. before that, he ran operations and ran -- worked for food -- four ford. more than one million miles. facebook is working on a virtual reality app for mobile phones. the wall street journal says the support 360 degree videos and would allow users to change the way they would see the video by tilting their phones. mark zuckerberg has called virtual reality the next big computing platform.

some are time of your -- of your top stories at this hour. one of the tech industries a guest and flashiest events kicks off in san francisco next tuesday. expecting 150,000 attendees, including the ceo's is of microsoft and uber. emily chang joins me now with the preview. what are we expecting? we have been here all week long. mark gets to talk about the future of enterprise software to 150,000 people coming into town or they are bringing in cruise ships for extra logging. making his first appearance very important. a big partnership between microsoft and salesforce. .ber ceo will also be there mark benioff is the star of the show and i think we will see a little bit of a victory lap from

him after a big quarter last quarter. me lasto what he told time we spoke a couple of weeks ago. leslie do not have a great quarter. we had the best quarter we have ever had and it was amazing. i cannot believe salesforce's performance. honestly. we are still the fastest enterprise software company ever. the fourthwe will be largest software company in the world and that is amazing. is bigger at that point. our job than is to be number three. first, by a market cap and then by revenue. emily: you will a number of great guests coming up. speakingwho we will be with as well. i will do a panel with adrian, who you know as vincent chase from entourage. we will be on stage for an hour

tomorrow, talking about his philanthropic efforts. mark: we will look forward to that, emily chang. thanks. still ahead, according to -- goldman sachs, the stocks you want to hold ahead of the decision this week. that story is next. ♪

mark: goldman sachs wants to prepare clients for the first hike in nearly a decade. in a note last week, the chief u.s. equity strategist recommended stocks to own and

avoid once rates rise or joining us now, julie. we should mention again, a lot of people do not think the fed will move. about 28% of people surveyed by bloomberg expect the fed to raise rates. even if you look into december, a lot of them do not at the to happen this year. mark: talk to us about the ins and outs depending on the fed move. this: if the fed moves week, you want to have stocks that have a strong balance sheet. things like, they have a lot of assets to their liability. cash on hand. let's name three stocks on that list you want to have in your portfolio. chipotle, google, and apple. investorsames probably do have in their portfolio right now. that is a good thing. mark: from a historical perspective, you have the balance sheet.

you ended up smiling. right. a notable gain in your portfolio. ark: when we talk about stronger balance sheet, what are we talking about? julie: you can have a strong balance sheet, but floating rate avoid. what you want to companies like apple, mcdonald's, and johnson & johnson are three you do not want in your portfolio. graphic.just saw that it showed what goldman's quality stocks are. within three months, after the initial hike, that is really the time that tells you whether or not your stocks are taking off and whether they are doing well. julie: exactly. keep an eye on how the stocks are performing relative to stock companies with weaker balance

sheets. mark: which ones should goldman suggest you avoid? you want to avoid apple, mcdonald's, and johnson & johnson. apple makes both lists but you has the to think apple fortress of a balance sheet and you might want to have those in your portfolio. mark: these are some big names, big names that goldman is saying you might want to take a step back because for anybody investing, you have to do your homework and study the balance sheet and see what is on their before you decide to make a move. avoid if there is a hike, apple is up year to date 13%. 3%.nald's is up julie: the reason you want to avoid those is because when you do have an interest rate increase, you will see the impact faster than companies with a fixed rate debt.

mark: all right. thank you, julie. we appreciate it. on "what didahead you miss?" we look at the markets on this monday. we have read across the strain -- red across the screen tear dow jones industrial at -- down nearly .5%. stay with us for the market close. you are watching "bloomberg market day." ♪ >> introducing bloomberg markets, bringing you the global business of breaking market news and information as it happens. stay on top . .

joe: we are moments when the closing bell. scarlet: and i'm scarlet fu in for alix steel. we're moments away from the

closing bell. [closing bell ringing] scarlet: stocks flipping days before the fed's key policy decision. joe: the question is "what'd you miss?" week and we are doing the countdown. we have the charts that lay out the stakes. scarlet is there anything not oversupplied? joe: brazil's debt hangover. brazil announcing an austerity plan. scarlet: we begin with u.s. markets. stocks falling ahead of the fed decision. about 25% over the 20 day average. nine out of 10 industry groups are down. that goes back to the