making the markets as the so-called day of reckoning is fast approaching. >> a new world for oil. they explain how the market may finally find balance. mark: it is one of the most valuable art collections in the world. look at eli burroughs new exhibit -- ♪ mark: good day from bloomberg world headquarters in new york. i am here with olivia sterns. >> let's get straight to a check of where the markets are trending right now. you can see all the major benchmark averages up by about 1%. solid report on retail sales showing them growing for the second month. it seems they are undeterred by the turmoil in the market.

illiterate lower on that showing the factory production disappointed. in the treasury market, the big action is on the short end of the curve. we are seeing a big move upward. yieldn see the two year trading at its highest level since april 2011. also finally, we do have an oil board let's show you what is happening in the commodity markets. oil was stronger, it has turned around since then. it has -- it is unchanged at $44 per barrel. supplies fell by one million barrels so perhaps that was adding a little bit of positive and -- positive sentiment. mark: let's take a look at some of the top stories we are following. the manufacturing sector in the united states is hitting a speed bump.

it fell last month by the most since january 2014. automakers scaled back after a big surge in july. a strong dollar is increasing demand from overseas customers. >> general electric is moving 500,000 jobs overseas. ge is a longtime beneficiary of the bank and they say a new agreement with a french export provider will lead to some of the jobs being moved to france. mark: it is a sign that some consumers may be looking past the turmoil of the financial markets. retail sales in the u.s. rose for the second month in the work -- in a row. it was just below estimates and july's estimate -- >> from his guys may not be very safe. the u.s. aviation system is plagued by wrong data on flight plans that may confuse pilot and controllers hundreds of times a

day. multiple routes -- multiple routes are filed for the same flight. >> a routine news conference because anything but went bmws chief executive collapsed. he think it on stage today at the frankfurt international motor show. the company officials say he is ill that he is ok now. he said he was not feeling well after returning from extensive overseas travel. >> the cofounder and ceo of the subway restaurant chain has died. tofounded the sandwich chain finance his college studies and eventually watched it grow larger the mcdonald's. -- grow larger than mcdonald's. they have more than 44,000 shots around the world. the death follows a bout with leukemia. mark: there was a rail -- a rare appearance television appearance by a supreme court justice on cbs's late show with stephen colbert. >> what's it like to be a

supreme court justice? job -- the biggest benefit of it, is you get -- you take every minute of it very seriously. it calls for you to put forth your best every single minute. isk: he said when he deciding a case, he is deciding up with the 315 million people who are not in the courtroom. those of the top stories we are following at this hour. we mentioned, retail sales climbed for the second straight month in august, gaining 2/10 of 1%. mark: while the market volatility has shaken confidence, people are putting their savings from cheap energy to work. let's turn to jack, the chief economist of the need -- national retail federation who is also a former economist with the cleveland fed. good to see you again. when we to make of today's numbers -- what are we to make

of today's numbers? to be consumer continues a major part of the u.s. economy nationalcrease in the retail federation which excludes motor vehicles and gasoline and food services. it is a modest increase but i think it is just -- it just points to the fact that the -- consumer is actually vital to the economy and we will see that going forward until the remainder of this year. >> how much of the strength of the u.s. consumer the you think is fundamental things going on, the economy, wage improvement? how much of it is consumers actually said -- spending the money they are saving on gas? >> in terms of the consumer, they have made a major commitment to the growth of the economy in this recovery, 2.1% growth and -- 1.5% growth in consumer spending as a percentage of gdp. the important thing is that when

you look at the availability to spend, they have jobs, there is income, they have seen home prices increase. prices seen a decline in to gasoline. because of the stronger dollar, consumers are going to benefit from lower import prices of the goods they are purchasing. mark: why do you suppose consumers did not seem to be shaken by this turmoil that has been roiling the global markets? >> i think to a certain extent, we don't know exactly how that will play out for a few weeks depending on how spending goes into september. i believe that the consumer is on a much firmer foundation given the macro fundamentals i just mentioned. consequently, this volatility that is occurring is something

that they have accepted. they are still cautious and there is a certain amount of anxiety about different things in the economy. i don't think that that is going to prevent us from moving forward at a good pace the rest of the year. >> what impact if any, do you think a rate hike has on the u.s. consumer? >> it'll be interesting when we hear about it, if we get a rate hike. this is history in the making. i think the markets have already priced into their equity markets. whether it's here or in december or shortly in between, we don't know. i don't think it has a significant impact for consumers. most consumer loans are not based on the short-term fed funds rate. when you start looking at long-term rates, u.s. treasury,

is -- it's a -- it's at a point where it is not going to change much because of global affairs. if you look at other credit that is being used by consumers. it has been slow. we are just turning to pick it up, so rates are going to be determined by demand and supply. are seeing right now in terms of the consumer availability credit is increasing. it will not have any impact or very limited impact to any extent. mark: you mentioned consumer availability to credit. are we seeing a thawing of that at this point or our consumer still hamstrung by the fact that credit conditions have been so tight since the recession and now some of them, especially the consumers who are trying to buy homes, they are having problems still? availability and

qualifying for credit. we know from the senior loan officer that the survey shows that more consumer credit is being made available. we know that mortgage money has become a little more difficult to come by based on historical standards or recent standards relatively speaking. on the other hand, to the extent that in the most recent month we saw the consumer start to accelerate their use of credit cards. to the extent that they are more comfortable in taking on credit, their balance sheets seem to be in much better shape and they are in better shape so they can support a little bit more debt and the use of credit, notwithstanding, credit availability will be based on qualifications and that will always continue. it will continue in the near

term because of the world that we live in in terms of what we have seen on the banking crisis not too long ago. >> thanks so much for your time. ahead, just does go days until the rate decision. >> could new economic data cloud the fed outlook? ♪

mark: welcome back. i am here with olivia sterns. >> let's go to matt miller with a look of where markets are trading right now. >> we have been up all day and

just climbing, even with a little bit of rotation. the dow jones industrial average is up by about 240 points. 1978.p up at about the nasdaq which is the least best gainer of the day still up by 1.1%. take a look at my terminal and you can see the imap which you are all familiar with now. it is a heat map of different sectors in the s&p. is not very exciting when everything is moving in the same direction. you can see the actual sectors that are gaining in order of what they are adding. energy down here at the fourth worst gainer but it was the biggest gainer. , financials, telik

medications, all gaining an industrials leading the way today. i'm going to change really quick and show you the transport. screen i made up. you've got the lime green which is the dow transports. the pink or magenta right here is the dow jones industrial. you can see the transports breaking away from the end of august into september and that is good as far as dow theory is concerned. dayave seen throughout the oil and commodities kind of peaking and coming down a little bit what you are seeing some of the industrials and transport names continuing to gain. fedex is one of them ahead of some analystsrow, expect fedex to have benefits from online traffic and benefits from margin expansion that would

outweigh top year-over-year comparisons. as we go into earnings tomorrow, a gain right now of almost we percent for fedex -- of almost 3% for fedex. ups is up over 3% today. at aboutying they will 94,000 seasonal workers over the holidays -- they will add about 94,000 seasonal workers over the holidays. incourse, volume is lower many stocks and across the board as we await the fed meeting on thursday. volume has just come down, especially in commodities. gold is trading at the lowest volume that we have seen all year. interesting to look at what the transports are doing. >> it's always interesting to look at what they are doing, even more interesting when they are really cool and lime green. mark: let's take a look at some

of the top stories we are following. -- thesident of china government -- reports in china said that four executives have admitted to insider trading. the brokerages -- the brokerage is state owned. >> yahoos plans to spin off without paying billions of dollars in taxes have been left in doubt. the irs says it has misgivings about the one god who is hoping to do. yahoo! hoped to spin off its alibaba stake and avoid about $9 billion in taxes. mark: matt miller telling us about it, ups plans to bring on up to 95,000 temporary workers this year to handle the increase of holiday shipments that begin in november and last through january. those of the top stories at this hour. >> the u.s. government reported

earlier today a rise in retail sales but they also avoided factory data. --y offer little clearer little clarity about the u.s. economy ahead of this big decision. mark: the chief u.s. economist for bloomberg intelligence joins us on the story. to borrow a title from a popular television program, what did we miss? >> what retail sales missed was augustk of movement in -- in late august in the financial markets. it was a scale report that households did not have a sense to process what was going on and most retail sales numbers were already tallied. instead we have to look to more forward-looking reports like the new york empire survey. for last week's consumer sentiment survey and this tells us that there is a souring of sentiment in the u.s. economy. the question is, how much and how will -- how long will it last?

if all goes as planned, the fed can probably commence the onset of interest rate globalization in october that interest rate normalization -- interest rate normalization in october. >> we have a story on bloomberg terminal. we are a long way off from full employment, what is that? >> full employment is when user to get wage pressures in the economy. wage pressures and other inflation pressures elsewhere in consumer pricing. we are not there yet. every cycle is different, it is not a good answer but we will know when we get there and we are not there yet because average earnings -- >> no wage growth, it is not -- >> the economy has not changed that much from the past couple of cycles.

if we get to 4.0%, we are definitely through it. folks thought it was maybe 5.5%, 5.25%. it could potential he be below 5.0%. what the policymakers want to see? -- what do policymakers want to see? >> what they are more focused on is the inflation pressures and we look at the economy in those core metrics of inflation, they are actually backsliding. nots slipping and this is the signal that is going to get policymakers confident that we are heading back toward 2%, when we are actually backsliding on the metrics. >> a couple of european -- they haveng and come out and said what will happen on thursday is a rate increase of 10 or 15 basic

points instead of the standard 25 basic points. do you think that is likely? >> absolutely not. a 25 basic point move, in an of itself is not going -- in and of itself is not going to kill the economy. that said, now was up a time for that to come. -- now is not the time for that to come. the fed is going to have a very tough time stabilizing things right at the midpoint of the new target range if you are moving in a five basis point increment. it is sending confusing signals. at the economy can't handle 25 bits, it should not be increasing rates. mark: you are telling us that the market would be shocked if the fed moved in two days. >> absolutely. it is only about a 30% chance of a rate increase. they do not want a hawkish surprise. she can do that by saying

potentially, we will do it in october. let's schedule a post meeting conference for october. forecast, seenge you in october. >> thank you so much. mark: coming up, on the bloomberg market day, it is ,orsche's answers back to tesla unleashing an electric sports car. ♪

mark: welcome back. porch is taking on tesla, unfeeling a four seat sports car that charges in just 15 minutes. tesla'scompares to supercharger which takes about 30 minutes to charge.

we are joined from san francisco with more. what do you think here? >> let's see what happens. horse just unveiled this concept car and my understanding is that it will not hit the market for another five years. when it hits the market, we will see how serious the competition is. mark: is porsche just trying to one up tesla or is this something to keep improving their band -- their brand? largerre finally seeing automakers getting into electric drives. for years we have been hearing about the promise of electric vehicles but now we are finally turning to see them. >> five years is a long time in the auto world, what do we expect coming out of tesla before this hits the road? >> by 2020, tesla hopes to have its model three out which is less expensive, fully electric.

the factory should be up and ,unning and software updates the speed of the fleet could also improve. mark: when you hear porsche and then you hear electric in the same sentence, for me it seems like there is some sort of disconnect, no pun intended. >> it is not something force is known for but i think that -- it is not something porsche is known for, but i think electric drive and speed is something that they are definitely working on with this model. >> how worried should tesla be about these luxury automakers trying to get into the electric car business? >> elon musk always said he accepted competition -- competition. --la has been going alone going it alone. >> i'm sorry to interrupt, i was just agreeing with you. there is the chevy

bowl and the nissan leaf but those cars are still old and relatively low volume. as more automakers come out with electric cars and electric vehicles can gain market share, that ultimately helps tesla. >> the more electric cars, the more infrastructure there is, the more power charging stations. thank you so much. mark: holograms that allow the driver to grab apps out of the air. >> i don't even know what you would use that for. thank you for joining me, see you tomorrow. much more, is joe biden jumping into the race?

>> stocks are moving higher this afternoon but all eyes on wall street are awaiting the fed decision on thursday.

let's get straight to the stories making news at this hour. in japan the central bank is calling on injunction growth to jump start inflation. the bank has decided not to add more stimulus for now. the head of the bank sees a gradual recovery in the economy. the bank will not hesitate to act if prices do not rise. daythis took place one before the two day meeting that will decide whether or not to raise interest rates for the first time in nine years. european car sales jumped 12% last month. the spike in consumer confidence pushed customers to splurge on suvs from luxury brand like bmw and mercedes-benz as well as french manufacturers. 9.4 million cars -- nearly 9.4 million cars.

stimulus -- britain's queen elizabeth ii will become the first customer of bentley's luxurious new suv. they can go 187 miles per hour and will cost $250,000. one of them pulled into our courtyard this morning. >> this car represents a couple of firsts for us. it is the first suv that family has ever made. it is also the first suv in the ultraluxury space and combines all the features that you would expect for a bentley. handcrafted luxury on the interior and ultimate performance. already a long waiting list. -- thegend janet joslin economic auto is now headed to auction after spending two decades as an exhibit at the

rock 'n roll hall of fame. it is excited to bring in more than $400,000. all summer long, the polls have been singing the same old tune for republicans. paste sanders is surging hillary clinton as an undecided joe biden lurks in the wings. robert wolf and a big-time -- a fundraiser -- betty liu asked him if anything if there is anything -- if there's anything he can do to stop donald trump. >> i'm not worried because at the end of the day, a democrat is going to be the president of united dates so that does not concern me. >> why? >> i think the narrative that the democratic party is talking about is where the country is. >> i want to get to trump. does he have the qualities of a president? >> is not the qualities that i

would vote for because i actually, unlike many, i want someone who has government experience. it seems that the republican party has been pushing for this new type of politician. >> it's not them, it is the voters. >> the republican voters are pushing for a new type of politician that has not been in the beltway, which is why if you look at trump and carson and fiorina combined. >> none of them have government experience. >> and they are probably over 50%. is not the same on the democratic party. they are more prone to government. the top two right now are longtime politicians, bernie sanders, even though he considers himself on the outside, and hillary clinton. speaking about hillary clinton, you saw the polls the other day where she is down 10% in iowa

and she is off by 22% in hand -- in new hampshire. are you worried? >> if i watch the polls the way you all do, mitt romney would be president today instead of being wiped out by president obama. i think the day before, he was still winning in the polls. 80% -- 75%at 75 or or 80%, there is only one way she can go. the media and the general public once the competition for the democratic emanation. -- democratic nomination. i think the poll is where we are at for a snapshot. >> are you saying you expected her to lose ground? that when surprised someone starts at 75% that there is a normalcy as it balances out. i think that the polls i would look at is everyone's own

internal polls, where do they really think they fit? new hampshire and iowa will not define who the next president is. if you recall, president obama lost to hillary in new hampshire. they had a lot of tough competition but the president ended up winning. i don't think it will be predicated on two states. >> how committed are you to supporting secretary clinton? outs say we are six months and you see the people numbers are not going to favor her. are you going to change your support? >> i don't want to speculate what i do and i have already announced that i am supporting seleka -- secretary clinton. vice president biden is not even in. there is a lot that has to happen that -- before we can have that conversation. on the hopping on different places based on where polling is going. started supporting barack

obama as president, he was running tents and had a 1% approval rate. today, i am really proud of what secretary clinton's standing for. we will go back to the platform issues, it will be about the economy and about war and policy and document -- about foreign policy and about immigration. i don't think it will be about the things that seem to be in all rhetoric today. >> i get it, you are behind secretary clinton. you also had a conversation with joe biden. >> like forest government -- forest gump, run joe, run. i am flattered and honored to be able to sit down with the vice president of the united states. he requested the meeting.

thursday they called up and asked to meet friday and we met then alone for 90 minutes at the hilton hotel and we had a great meeting. the fact is, it was an incredible conversation for me when he with two boys said a talking about hunter and beau. aboutn he started talking hunter and beau. when you see the type of person he is, he is just genuine. there is nothing else to talk about. >> that was robert wolf speaking with betty liu. still to come, how low will oil prices go? we also have some advice for opec and the new world order of oil markets. ♪

>> welcome back. i want to take a look at how commodities are closing of today's session. alex, let's talk about cities. what does the research say? >> copper is going to reach $5,700 a ton by the fourth quarter. cited, china's demand is actually pretty good and supply is not as great as people would think. >> that's a big deal of itself.

waiting across the board for commodities to start to come down and it hasn't. they're looking at about 1.5 million tons of copper has been lost this year. the union of demand, this is what you are looking at here -- speaking of demand, this is what you are looking at here. as you can see, it has been rising which only happen when there is either not enough supply or there is more demand. demand for china is about 3.1% for the whole year through august. many people say it is about 1%. but is all going to help demand expand, especially when it comes to railroads and renewable energy. >> that is also a bit of a forex tailwind here with minors paying their production and digging costs literally in foreign currencies which are seeing -- which are getting weaker. as ais is where citi

conjuring view -- a contrarian view. is for a are saying lot of the producers, their cost are in dollars. look at indonesia and chile. they are not going to get a longer term lasting effects by lowering their cash cost. the u.s. dollar overall mix about 66% of capital cost for major producers and 28% of total costs. this means that the production growth gets a boost from the local currency is going to be very isolated region to region and across the board -- and not across the board. >> let's talk oil now. spread has crude trading at its narrowest, just above $44 a barrel. i wonder what's going on but the big news today with that supply

stocks were going to fall by about one million barrels. let's show you what is happening to the xo p. here it is, a nice move upward, 1.5% on the day. is this on indication that the global oil surplus is piling up? >> yes and if you take a look at wti like they mention the big spike down, it was related to the blood here in the u.s. -- glut here in the u.s.. president obama's of the u.s. does not back the oil bill as is. it said that oil is not going to be getting out of the u.s. anytime soon but we did see a pretty decent recovery right after that, that news broke just before 2:00. jake -- based on what you were saying in terms of the future prices being at the lowest they have been since june, you can

take a look inside my terminal to get an idea why. if you take a look here, the orange line is current future prices. they are significantly low, about $47 right around here. three months ago, four months ago, back in june and may, they were all the way up to about $68. that is a huge decline in just the last four months. point at these are -- that the surplus is growing more severe. >> we should also point out it is very thin trading right now. in particular, and commodities, gold and the like. much.thank you so in the meantime, sticking with commodities, i want to turn to vice-chairman -- he spoke with tom and brenda and calls thatim about

oil could drop to $20 a barrel. >> we are probably in a world police the next six months or nine months, maybe i 30's -- maybe high 30's which means that there is a lot of oil out there. >> if you parachute into jakarta, would you perish you'd in -- into opec now, what would your message be to opec leaders? >> message would be that the world is very different than they thought it would be and that it is out of balance and that if they are -- would be a message to all oil exporting countries that you have to change of mindset. >> is that because technology as is or the idea of clearing markets with microeconomics? are they being overwhelmed by the technology you predicted? >> people do smith fracking and shale oil. it has almost doubled u.s. oil production since 2008. this is a huge influx of oil

into the market that it was not prepared for. since priceseriod, collapsed, u.s. and saudi arabia have added 200 million barrels a day to production. in the history of oil, they have a way of finding themselves how to get together. what is the next cartel in oil? >> i'm not sure there is going to be a next cartel but what i think is going to happen is we will see a lot of these big billion-dollar projects have been postponed or canceled. that is going to rebalance the market. >> so we will have a real market price from here on out? oil producer in the middle east will decide once again to manage its production in terms of price. right now it is going off of market share.

>> what are the macro events where state department's and foreign policy is going to tell the oil market what to do? >> it's almost the reverse is that the decline in oil price and the energy transformation that are going on will have geopolitical consequences. it's not inappropriate to point out that many of these states that were bolstered by high oil prices have not exactly been constructive layers on the scene -- constructive players on the scene. the decline in the price of oil ultimately will benefit the forces of democracy and popular government. >> you agree with that -- do you agree with that? >> what i was thinking about was how much our own economy system has benefited from the activity of domestic oil, shale oil.

you can see manufacturing companies are now reporting distress because the expenditures these domestic expenditures are not happening. non-norway oil states has done the best job of adapting to the new price of oil? >> i think everybody is in this state and is now lowering their price level. it look like mexico is going to do it with -- it has been caught up by the speed of the price decline. you have always said norway is just a very well -- malaysia was on that list but it is now having sim internal controversy. -- having some internal controversy. >> now the top stories we are following -- now a look at the top stories we are following. brands and burgeoning galactic is beaming up its rocket units that can take -- take small satellites into orbit.

version has been employed to in -- deploy a internet satellite system. a startup will invest $200 million to make florida its base of operations. the company will launch rockets from cape canaveral. this of the investment will create 330 jobs. the discount retailer is teaming up with insta carter -- it's the cart -- instacart. a taco bell in chicago will be the company's first outlet to serve alcohol. the risk -- the restaurant opens next week and will cater to millennials with top us menus and open kitchens. a similar location will open in san francisco later this month. those are your top stories at this hour. still to come, much more,

including a fascinating look inside an art museum opening in los angeles. ♪

>> eli broad has one of the most viable collections of contemporary art and next week he will open a $140 million museum right in the heart of downtown los angeles. he gave us an exclusive look. ♪ downtown los angeles now has another spectacular looking building. will house 200,000 works of art.

a concrete veil covers the building and the natural like that slips through makes sculptures gleam. > road built this museum -- eli road built this museum. >> a lot of these works hung in your home. what is it like to come here and see them? >> it looks great. my wife which is of these pieces return home -- my wife wishes a few of these pieces return home. >> it includes warhol's. more than 100 photographs by cindy sherman and paintings by jasper johns. it's a collection many major museums coveted.

>> we talk to someone in new york. most end up in storage or in a basement. >> that did not appeal to him so he spent $140 million on his own museum. it will be free to the public. a place where paintings that aren't on display are still visible to visitors. this building literally is about that interplay of opacity and transparency and those viewing windows are the most obvious example. -- >> the goal is to make contemporary art more accessible. >> i know this will be an amazingly popular piece for visitors. it has multiple layers of meaning but on one level, it is just simply a delight. >> the museum is designed to delight.

the main gallery is up a long escalator. the first piece visitors will see is a sculpture. >> this is one of our favorite pieces. >> they own more of this artist's work than any other collector. >> we love it. we gave a deposit. apart --ets the rods is the way they talk to the art they collected. >> i was always spending all my other time with business people. artists have a view of what the world is really about socially and otherwise. museum to bes his just as eye-opening for visitors. david joins us on set.

it is exciting that this project has come to permission. it's cool that they are opening the doors. how did he make his decision about what he wants to buy? >> it's very personal, he said he got to know the artists. the woman you saw interviewed has been his art advisor for several years. is now directing the museum and going to art fairs around the world to help him pick stuff. in the end, it is a personal connection. >> don't go away, more market day on the other side of the break. ♪

exit is newman san francisco. >> it is noon in san

francisco. will this be a september to remember? n upgrade.ets a >> the unstoppable donald trump. will he give us much of a show? ♪ olivia: good afternoon. alix: yes, you are seeing a rally with the dow up 250. you have got retail sales coming in better than estimated. but olivia, really, let's talk about the volume. take a look inside my bloomberg terminal. index. the svs shows you all the average volume for this time of day versus the

20 day average. you can see it is down across the board. consumer staples are pretty much flat. olivia: mike mckee said earlier this morning -- this is interesting because of the fed meeting. the short end of the curve is that.g off, and look at the yield is 7.9%, the highest level since april 2011, up several basis points. that is a big move. alix: and unbelievable move. maybe we wills see a rate hike. olivia: i was looking at glencore because the stock had a crazy move at a record no -- record low in 2011. at one point, it hits a record

low. it is going to issue more stock and will sell new shares, trying at 10 percentbt of existing shares. the rush to pay off debt before the ratings downgrade. alix: either way, the share is chopped in half. -- chart iol shark want to share with you. anthony, who runs a cool hedge fund, he says the way he likes to invest is look at initial jobless claims. every time the initial jobless claim hits a low, he sells the s&p. you can see the orange line. it hits a low. you see a decline because it is somewhat levered to the inflation rate. >> this is spontaneous.

manufacturing sector is hitting a speed bump. factory production in the u.s. spell by the most and -- since january 2014. a stronger dollar is hurting demand from overseas customers. >> flash flooding killed people in a border town to five others are currently missing. washed away two vehicles carrying 16 women and children. it happened in a community that serves as the home base for the polygamous leader. in wildfire destroyed more than 700 homes. a lot of the damage -- it has grown to nearly 67 thousand acres, twice the size of san francisco. one person has been killed and 23,000 people have been forced out of their homes. >> the cofounder and ceo of the

subway restaurant chain has died. he founded the chain to finance his own college and then watched it grow larger than mcdonald's. more than 34,000 shops around the world. the billionaire's death follows his bout with leukemia. he was 57 years old. >> bmw's chief executive collapses. a 49-year-old fainted onstage monday at the international motor show. an official says he is now ok. cooper said he was not feeling well after returning from expensive overseas travel. google is making its first big bet since announcing off of that. $32.5 inny will have an insurance startup. 1.75 billion dollars according to the wall street journal, which cites an unnamed person familiar with the matter. they help sign of customers .hrough online exchanges

they focus on signing of individuals rather than employers. >> that is cool. how about this status update? facebook is working on options besides the like button for users to weigh in on postings. mark zuckerberg confirmed he is in a public q&a. they could include a dislike button that could help people express empathy and it will start to be publicly tested soon. those are your top stories at this hour. >> you could get mean. you little dicey. talking about dicey, we are all rating -- waiting to see what the fed will do later this week or the bank of japan earlier decided to hold rates steady. stimulus.ost >> the president and ceo joins us now with his take here and

abroad. is this working? >> yes. beforebeen on this show several times with other networks. some people were expecting a most people were not. we feel it is probably one month away. the next big meeting is the end of october. i think it will happen before that and there will be another stimulus a proximally 5% to 10% added to what is already going on. >> if there needs to be another stimulus, isn't that an argument it is not working? >> depends. a lot of things have headways. it is working but is taking a lot of time. you see what happens, exporters, china is japan's's second-largest export or you have a slowdown in china, and it will affect japan as well, apecially since you have such

big export. also, the price of oil being where it is has hurt inflation getting targeted at 2%. >> when you take a look at what the fed might do, you guys have one of the most dovish called out there. i second quarter rate hike. what do other banks have to do to counter? >> our chief economist has been on record two years now. he has been out there but he has been right. if you look at the fundamentals, nothing is really changed. growth is around 2% and no more. no sign of inflation. we will continue to stick with that in terms of the u.s. feel there in a position where they will do to keep thet takes economy going.

there is still a lot of interest in japan. we just had our investor conference last week. 30d 400 corporate's, 51-on-one spirit that is 25% increase from last year, the highest attended ever. there is so much interest going on in japan. >> if it happens at the end of 2016? >> it will probably be better, so it will not affect current is much. we want to keep it at a lower rate. the call is for the yen to be approximately 145 by year-end. feds there a risk of the causing another safety play in the end? is that a safety concern? >> i think that is a concern. it may not be the main concern

but there is always a concern of that. concerns are definitely related to what is happening with interest rates and offense. we're watching each other. it is one of the reasons the boj will act sooner rather than later. >> how healthy are japanese equities? >> if you look at corporations it isrnings per share, probably the strongest out of any developing country. >> really question mark stocks 35%.upposed to >> it hasn't. this in the low figures. are extremelyhare strong. quite time looking at our terminal. in terms of what china exports, toil and percent in china, 17% go to the u.s.. 8% go to the european union.

how do earnings continue to grow when there is that much exposure to some countries that are struggling? >> one of the bigger industries we have seen, and it has helped, it is actually tourism. a lot of chinese have come into japan. that is helped the economy strengthened. dying to go skiing in japan. >> awesome. thank you so much, president and ceo. >> much more ahead, stocks are at session highs. a primetime bloomberg surveillance exclusive tomorrow. tom keene will have the free.sation commercial

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olivia: let's go straight to looking at the markets. gains on the dow right now. matt: volumes are incredibly weak. we are up 1.5% on the s&p 500. i guess it does not matter to you how much volume there is a zone as you have these gains, you're a happy camper. isill show you where volume the weakest. i mean, where is it the strongest.

every single sector on the s&p 500 is trading below is 20 day as far as volume is concerned. only consumer staples are even. overe has been coming down the past few weeks basically since the volatility. volume decline. -- not that people do not trade on the juice new year, but some people do not. the fed decision always makes people slowdown trading. they turn off the computers in the peters maybe do not understand what is happening. at some of the stocks that are trading. we think of them as the big three american carmakers. fiat chrysler is an italian carmaker with headquarters in london.

think of it as it which would lawmaker. united autoworkers is negotiating with all of these companies. for general motors and fiat chrysler, the unions have had the contract extended as a move of good faith. it is pretty normal and not a good year itself. mary barra has come out and said, she is not interested in a tie up with sergio and fiat chrysler. some analysts associate with the company continued to push at that. i want to look at hotels today. they have been trading down because pebble brook said it is revenue per available room would not reach the outlook previously forecast. that has been a problem for hotels across the board. this week was not going to get as much traffic as they had

previously. have you been staying in any of these hotels? >> i have a one-year-old. not so much. quite thank you for your let's look at some of the top stories crossing the bloomberg terminal this hour. senate republicans will try second time to move on a resolution rejecting iran as emerald power. democrats are ready to block the president has is for policy -- the president's policy intact. an iranian firm has broker the first deal on the historic agreement between iran and other world powers. to buyed an agreement french brands to two airport hotels. under the contract, the tourism company will use the brands starting next month. they are both owned by french hotel chain --

this twitter contribution to the political process, twitter has unveiled the tools that allow anyone to make a donation to retreat. the company is teaming up with square, the ceo of which is jack dorsey. he is also twitter's chief executive. speaking of politics, let's talk. it is almost impossible not to bring donald trump up in any political this course. the mogul has proven to be like -- unlike any other candidate. the front runner is invincible so far. how do his opponents turn him into a mirror mortal? rules changed since trump is kind of killing it? >> with some republican --ategists associate

conservative groups say they the right wayout to take down trump. you have thought he would have taken himself down through his gaffes. you would have thought news coverage and things from his background would have taken him down. instead, he continues to rise in the polls along with dr. ben carson. the two of them are headed shoulders above the rest in the field. republicans say this still have to work that rubiks cube. what about trump's background -- what frame can they put on trump to try to be desperate him down. has taken us by surprise. ?hat is he doing now >> ben carson is kind of under the radar in the establishment. he wrote an autobiography in there was a movie made about his life and he gave a lot of speeches around the country. he has voted bond with people.

his supporters in iowa and new hampshire and elsewhere, that is emotional. they do not care much about his policies or any errors he makes. they like his story and they like him. dr. carson and his team have built something now that may, in the end, have a more enduring bond than what donald trump has built. >> the next republican debate is tomorrow. who has the most to lose at this point? i think the four establishment candidates. not carson and trump, but jeb walker, john kasich, and marco rubio. those four guys, one or two of them can still emerge. as rivals to carson and trump from the so-called inside bracket. there is a lot of pressure with trump dominating the stage as he always does, to try to stand out tomorrow night.

>> they have got to prove the high energy that he is. it is really annoying. thank you so much. be sure to tune in tonight at 5:00 p.m. eastern time. it one hour special on the republican break -- debate live from the reagan library. >> the case on why apple's program will be a big boost to its bottom line. we will explain. ♪

>> one stock we are watching is apple. shares are getting a nice boost. case forst makes the

why apple's's iphone upgrade program could drive up earnings. cory johnson joins us now from san francisco. once again, the whole investment thesis for apple is pinned on the iphone. cory: as it should be. 55% of sales. it is one of the little noticed things in the big announcement last week of a couple of new products, not least of which, the new iphones, the ipad, a pen, a keyboard. the new financing plan could have significant lasting impacts for apple. has beenst at ubs covering the area for a long time and did a lot of detailed work, including some polling of people about iphone usage and figuring out how often they -- they replace their phones. have aks this could material effect on the long-term value of apple's business and of apple stock. was staggering.

he basically said the stock could be worth up to $200,000 based on the upgrade trade program. can you walk us through the math involved? to do ist he is trying figure out how often people upgrade their phones. if people were to join this pay $32 pere they month every month, and can therefore upgrade every year, how much more phones that could mean for apple, how many more orrades it would pull full into the current year. a lot of work about how long people keep their phones, what the average duration is, discovering people in china expect to keep their phones for a lot less time than people in the u.s.. sales pulling those forward, he creates a grid. if you pull forward a certain number of sales and a certain number of people will upgrade two years now and now upgrade this year and every year going forward, that would bring a lot more money to apple. apple has not given investors any guide into how it will work.

the balance sheet. it is a fairly interesting change in the way apple's's business works depending on how many consumers jump to the notion rather than paying for and releasing the phone over a certain fixed. of time. period of time. >> what you think is the biggest risk to apple stocks? details are very much unknown to it we do not know how much of the balance sheet will be put at risk. the number of users who want the latest and greatest, geeks like is isw big the audience not clear to us because apple has mostly been in a new market

and new customer growth mode and they want to stay that way. as the time goes on, the market can only get so big. they want the refresh cycle to happen faster. details ofly, the them pulled out of at&t. it often gives customers a chance to own those phones and unlock them. what they found in short order in less than 18 months, they went from 15% of customers to 65%. that business was spurred by a notion t-mobile pushed on the market. if those are the kinds of numbers used, it could be huge for apple. >> good stuff. thank you so much, cory johnson. always a pleasure. ♪

alix: welcome back. let's get a look at the top

headlines this afternoon. scouring the indian ocean four degrees spotted by a pilot wasnd the area where a wing spotted. a crew member reported seeing something light floating 35 miles north of the french island of union. military planes searched the area without success. outside london today, they remembered a time when great britain when i guessed not to germany. fighters flew overhead. the 75th anniversary of the battle of britain. hungry has begun its crackdown on migrants. soldiers and police field off the border with serbia. intercepted 9000 people trying to cross illegally in the last 24 hours. hungry announced plans on its border with a fellow eu member. automakers believe the migrant crisis could be a win for them. and the country's labor shortage. they spoke about the possibility

they see an influx of people poring through the borders. >> declining populations. we need people to support our growth. ago, it is being viewed by millions of people coming from italy, spain, turkey, and we can see something similar now will help us grow into the future. separate interview, volkswagen ceo also weighed in. >> highly qualified people are coming over. to use an opportunity highly skilled people, to give them jobs at our plants. we see opportunities to train other refugees who are not as skilled. this will be our contribution to deal with the refugee crisis. alix: car manufacturers are some of the largest exporters in

germany. those are some of your top headlines. the countdown to the fed meeting continues with a debate over a possible rate hike entering its final hours. global ratesd of and currencies at merrill lynch set out with a surveillance team earlier today. they asked him if he thinks the fed will raise rates thursday. still calling for a hike this week by the fed. i personally think the risk is that they do not and the reason is because i think the international events are overtaking the u.s. fundamentals, especially what is happen chiing in. if they were to hike in september -- tom: we talk about england and druggy. bank of japan is important. what does the decision mean for sure yellen? >> i spent three days last week

in tokyo. the sentiment among japanese clients in tokyo was pressing because they said, listen, second-quarter gdp growth is negative. this quarter, it looks like gdp will contract again. less than two years after they basically with the and having gone down 16%, what does that tell you about volatility? is,ne thing i wonder about is what is happening in japan now between the central bank and the government the same thing happening in india? the central bank is basically forcing the government to act? >> the problem of japan is also of -- at this point. to the extent there is already no liquidity, what is left on the table is for them to buy more stocks.

>> when we talk about tools, we keep talking about monetary policy tools. they need structural reform and immigration. immigration, if they're watching what is happening right now in germany and hungary, they probably do not come out going down that path anytime soon. they'relly believe going to solve immigration problems than physically putting driverless cars on the road, robot nannies and robotnurses. tom: when you are in meeting together with someone you have a respectful disagreement with, how do you advise on how all of these international events come over? the japanese struggle with qe. how does david fold over on ethan harris's world?

look at u.s.t economics fundamentally, u.s. data, yes, there should be hiking rates. one thing you need to have an international perspective here. lists.ly volume generally speaking, the soundbites coming out of the fed also. another thing i would say, 30% chance of a fed hike this week. this will be the first time in 20 years the fed is hiking rates with the market having priced at 100% at the hiking cycle. this will be a big price for the market. the last 22 years to prepare the market for this eventuality. >> why do they need to pay attention to the rest of the world?

because, the rest of the world is more important than the u.s. and u.s. is important to the rest of the world. alix: that was david wu, the outspoken as always. speaking with the surveillance team earlier in the day. staying on the markets and the is myoining me now cohosts on "what did you miss?" excited to talk to him. >> he thinks the fed probably will go in december. that is a big call. obviously, when the chief economist of goldman sachs talks, everyone will be. this was a long dated call. >> that is exactly right.

he was always december. people thought he would capitulate. now a lot more economists have gone toward him rather than the other way around. alix: goldman sachs financial index takes a look at stock moves, to see if they need tightening. it has increased 2%. the third biggest move in the past three decades. have them andnks they all try to capture exactly what you are talking about. credit spreads, the stock market and the strength of the dollar. they are going in that direction showing there is tightening. there are two schools of the view here. one is that the fed does not have to tighten. others say the fed cannot because the markets are tightening. talking about that, it will be an interesting conversation. isx: he says yes the call

december but the fed should be easing based on the tightening we have seen. that was a pretty intense call. >> that was an exciting thing. based on the goldman sachs measure, if anything, the fed should be easing. alix: stay tuned. tune in at 4:00 p.m. eastern for an interview with goldman sachs .hief economist coming up on the bloomberg market day, stocks are well into the green today p or we're watching the markets in the last half hour of trading. a reminder to join us thursday for live coverage of the fed decision with a special report set for 2:00 p.m. followed by the janet yellen news conference at 2:30 pm eastern right here on bloomberg. it is like our super bowl. ♪

alix: welcome back. i am out steel. -- i'mtes before the alix steel. .0 minutes before 15 minutes before. matt: the dow jones industrial average been the s&p 500 up one and one third percent. 79. we have seen rotation as far as sectors gaining energy this morning. aw we see industrials as leader of financials. i want to show you something that may be slightly confusing. a commodity as well, which is very interesting. it shows you these are the

years and rose here. september, historically, he looks in the last 10 years and an average of -- withve been in the red but today's gains, we're positive for the month of september. you can see august historically is a that month. june, historically, is the worst month over the last 10 years as far as the last 10 years are concerned. a bad month, down 17% in 2008, 1 of the worst months we have seen in the last 10 years. check that out. i know you are interested in oil and all commodities. a really interesting trade. i will ask you to explain this to me when i had it back to you. we were climbing all day and

then just dropped at 2:00 with the settlement. we are now climbing back up again. why drop on the settlement and then come back up? was there a piece of news? is my microphone dead? some technical difficulties there. to answer matt's question, we heard from the white house that they did not support the current and to lift oil exports in the house right now and that is what caused oil to drop around 2:00 p.m.. it has since rally back. that is a look at top stories making headlines at this hour. just asus is making a big bet on outer space. blue originrtup will invest $200,000. the company will launch rockets later this decade. investment will create 330 jobs.

poor throws down the gauntlet in the race against tesla. they on leashed -- unleashed a faster thanhat goes 911 and charges in just 15 minutes. battery toarge the 80% capacity in 15 minutes. tesla's's needs about 30 minutes to recharge to about 170 miles of range. rock legend janis joplin once said about want -- once saying about wanting a mercedes-benz but in real life throws -- drove a porsche. the archive -- iconic auto is headed to auction after spending two decades at exhibit of the rock 'n roll hall of fame in cleveland. it goes on the block in december and new york and is expected to bring in more than $400,000. those are some of your top

stories. bill of benchmark capital spoke with emily chang, who joins the now from san francisco. how is silicon valley reacting to the volatility in the global market? emily: you remember he came out a few weeks ago saying we think we are at a reflection point where startups, they need to start talking about profitability overgrowth. that was a few weeks ago. lot moreeen a volatility in the global market in china, specifically, i asked him how concerned he is about china. take a listen. >> there seems to be enough evidence now that there is some type of slowdown. and internalexport consumption standpoint. the only reason i think that is interesting and might actually relate to us in silicon valley,

some of the investors playing in the latest market here are fairly active there. part of what happens with investors is they can quickly go from being overly optimistic to overly skeptical. optimisticther super or super pessimistic. it can cause a huge shift. i half full guy asks you a very different question in an investor meeting. remarkably different. his skepticism creeps in. i think her is some risk skepticism could creep into the investor market. it is the same people doing it everywhere. if they get your but kicked over there, i do not think they will stay hyper optimistic here. it sounds like what he things is going on in the

broader market could have an impact here in silicon valley. warning companies they have to be careful. >> my question is, what is he telling companies? alix: an interesting thg he said is, he thinks the strongest company is the best company, no matter when they were created. it does not matter what the environment was a they will be successful either way. a and a plan b. see things starting to turn, you can turn quickly to cut -- to plan b. comingl hear a lot more up on bloomberg west. we did go into a lot more depth, including the future of all of these. alix: good stuff. thank you so much, emily. chat on more of her "bloomberg west." 1.5%.w up about

we are following the markets. we will be right back. ♪

alix: as we wind up awaiting with the fed will do thursday, what are the technicals telling us about stocks? jonathan is the chief market technician at mgm partners and joins me now with perspective. thank you for being here. i appreciate it. i want to highlight something crazy that happened. you are looking at the s&p financial stock. when it goes right below the purple line and one blow the green line. jonathan: we do not pay as much attention as we do to the slope

of the long-term moving average pared in our work, the long-term moving average -- more important is, what is the long trend doing? for the s&p 500, that has started to turn down. we tend to focus on that than the short-term crossing over the long-term. if you look historically, it actually does not seem that bearish overtime. probably doesn't work sometimes and does work other times. alix: when you look at the s&p, what does that wind up telling you after we had a 10% correction? how quickly can it recover? jonathan: the 200 day is declining for the first time in four years. a good point, be but often times, once it starts to roll over, that is a sign for

long-term concern. alix: is the s&p charted against its long-term averages? line, that is the 200 day and a long-term trend. that turned over in the last few weeks. >> right. we have not seen that for a few years. since 1960, there have been 24 times where we have seen a 10% or more correction. the recovery time to get back is actually eight months. the average is a year. even if we are talking fast recoveries off of the 10% correction, we are probably unlikely to see it this year. that another chart you had looks at the trend of the su -- the s&p versus stripping out goals, i thought this was cool because we're talking about --na selling off forming

foreign reserves. you pointed out there is a correlation between how stocks perform in what happens to the world reserved currencies. jonathan: it is a simplistic way security. it coincided with the financial crisis. i do not think we are seeing anything like that. it is important to note from 2009 2 2014, global reserves are increasing and have been in decline for the last years. headwind for the market. it does not mean anything like we saw in 2008, but it is important to note what was an important tail and for the market has been shifting. alix: do you think we retest fellows instead? -- the lows instead? jonathan: from our view, we still think we do. you have a bottom which we all became accustomed to.

you quickly make a new high, by the debt. you would not have a chance to get in. it would be that quick. the other way is to make a base where you see a low, and then things start to improve. we saw that in august of the -- of october of 2011. despite the fact there have been a lot of calls, we still think it is likely because it has now been three weeks and it has not been a v-shaped. it has granted higher, but it has given you a lot of time to get in. normally the v-shaped bottoms do not do that. recent note, most you talked about the nasdaq 100. you check out levels to trade? >> you should look at the leaders if you want to look at the overall market. the nasdaq has a lot of high beta names. we actually looked at the momentum.

it shows a lot of stocks relative to the suv. as long as that keeps making new highs, it is probably, you will not see the imminent role. we are close to that level. it is a huge bounce back from where we were. jonathan: we are close. if they were able to get into that resistance, i think that would bode well on the s&p 500. the bloomberg ipo indexed to ipo's were super high. they had not performed well at all. what does that tell you? jonathan: a lot of charts you can point to our bearish. the poor performance of the ipo is one in the -- one indication the appetite is not there. we're seeing somebody move to the more safe haven. is a slight concern it has

been lacking for about a year now. good stuff. thank you so much to jonathan, a chief market technician at m km partners. much more is ahead. goldman sachs chief u.s. economist will join us to get his take on the fed. let's get his take on what will happen thursday. ♪

alix: we will wait from the closing bell. theur moments away from losing battle -- closing bell.

500 stocks rally in the s&p heading for its highest close since august 28. joe: the question is what you miss. with the chief economist at goldman sachs to talk about what is that they are -- is at stake. alix: the past is prologue. what happened the last three times the fed raised rates. brazil, it is all about with the global markets turmoil. when of the top ceos is your best. alix: we have to begin with the markets. it was quite a rally. at one point the dow was up well over 230 points. all u.s. stocks are of about 1%. a risk on dave.