a joint meeting of congress. theill listen in on historic speech. missouri may soon company. bmw is under scrutiny. we have the updates on the growing emissions scandal. it has only been one week since on fed decided to stand pat interest rates, so what will janet yellen say today? good morning. i am matt miller. it's get a check on the markets after a slow low-volume day yesterday. we had red arrows across the board and we are back at triple digit moves on the dow jones industrial average. 16,070 is thes, level. s&p 500 down 21, a little more than 1% at 1917. and the nasdaq down more than 1% as well that 4699 as investors

weighed more guidance on the fed. -- guidance from the fed. we have coverage of the pope right now that we will go ahead and break you. he is walking to the front of the joint session of congress and he is going to give an historic speech. the last of his visit in washington before he comes to new york city tomorrow. we will bring you some of that speech as soon as he starts to address members of congress. there he interesting attempt not pope political, but the will make statements that are political in nature but he does not mean them that way. that is what we have been hearing about the speech ever since we started preparing for it. he will speak -- will be speaking english or spanish is the question. yesterday, he spoken english and he is going to speak in english again today from what i hear from my producers. we will come back to review more

on the justices, and the cabinet gathered there. as soon as the pope comes out, we will bring you more and we will bring you the speech. ofaking news and the release new homes sales for august. i want to go to senior markets corresponded julie hyman. julie: thank you. coming up better than estimated gain in new home sales 552,000.ual pace of the prior july rate was at 522,000 to 570 -- and do recall that new home sales are a minority of the markets, existing home sales or previously home owned sales, however you want to put it, are the largest part in the market. new home sales can be a leading indicator and they can indicate or broadly how the construction market is doing. matt: thank you very much. .reaking news on new home sales we watched pope francis walk toward the front of this joint

session of congress to make this historic speech. phil is standing by in washington. as i was trying to point out, the pope does not mean to be political but he does make statements that seem very politically loaded. phil: -- matt: i'm not sure phil can hear me. we are having technical difficulties with phil in washington. maybe the applause of congress is too loud for him to hear. i microphone -- but you can see pope francis is 78 years old and he has been in the u.s. a couple of days after a trip to cuba. standing in front of a joint session of congress and they are applauding him. i will heard that they will not give up causes after each statement he makes. that is what we heard yesterday when he spoke to the public. the reason being that one party or another might applaud for certain points and they don't want to make this a partisan hearing. you can see john boehner, the

speaker of the house, pounded the gavel. members ofr: congress, i had the distinct honor of presenting to you pope francis of the holy seed. [applause] [indiscernible] congress, dear , i am most grateful for

your invitation to address this inoint session of congress the land of the free and the home of the brave. [applause] i would like to think that the i, too,or this is that am a son of this great continent seenwhich we have always

so much and a court to which we share a common responsibility. forgiving country has a mission, a personal and social responsibility. our responsibility as members of congress is to enable this activityy legislative and to grow as a nation while the face of its people are representatives. you are called to defend and preserve the dignity of the citizens and the tireless and demanding person of the common

good. aim of all a chief politics. societycal [indiscernible] needs byy common of all ofg the growth its members, especially those in great legislative activity. fixing chaos for the people. invited by those who elect you.

yours is a rock which makes me .eflect in two ways [indiscernible] symbolizesof israel peoplee -- the need of bykeep their sense of unity just legislation. moses leads side, to god and the dignity of the human being. [applause] moses provides us with a

sentences -- a synthesis and asks to protect by means of the law, the image and likeness fashioned by god on every human life. today, i would like not only to put through you, the entire people of the united together.re i would like to take this opportunity to dialogue with the many thousands of men and women who strive each day to do an honest days work, to bring home

moneyily bread to save and tons of time to build a better life for their families. these are men and women who have been satisfied with simply paying their taxes but in their own quiet way, sustain the life of society. [applause] they generate solidarity by their actions, and they create organizations that offer a helping hand to those who are in need. there you see pope francis

addressing a joint session of congress, telling them that each member of society has a personal and social responsibility and that their responsibility as members of congress is to legislate in a way that would allow the society and the country to grow. if you want to watch more, go to andwebsite, bloomberg.com watch a live stream of the pope addressing the joint session of congress. tomorrow he will come to new york city and we will continue to cover the pope's historic visit to the united states. sales constitute a tiny total of home sales, they are very important in informing us on what the demands for new construction is. for closer look at the number, let's bring in zillow's chief economist. pleasure to have you here. thank you for joining us. numbers a moment ago and we saw pretty decent growth. sales month over month with a gain of 5.7%, much more than

anticipated by economist resurveyed and a little bit better the previous month. how does new-home sales look and how does it in former picture of total home sales? >> i think it is nice to get the numbers and annually. the heels ofter existing home sales dropping of it earlier in the week. this is positive news on what we have been hoping for. matt: i wonder because it has been a week since the fed and janet certain pad on interest rates and today we'll have a special on janet yellen at 5:00, but what do you think the effect .25d have been had we seen increase. what happened to measurable effect? think it would have been different depending on where you live. a market like san francisco or denver where homes are expensive and they are stretching the budget to make it work, and increase ever so slightly in mortgage rates would have an

impact their and you could see further cooling of the market. matt: well maybe it is ok if those markets: little bit. am i wrong? svenja: absolutely not. we have been seeing cooling. matt: do you think those markets on bubble territory? frothy? svenja: i wouldn't call them bubbly quite yet but it is good news. we are seeing renters saying that they are likely to buying as a decreasing. just from now until july when rebrand the survey, renters and not optimistic about the markets and being able to afford a home so they are taking a hit. if you're in the middle of the country or less expensive markets like philly, renters are more optimistic about being able to make the transition from renters to homeowner. matt: we hear a lot about the millennial generation wanting or choosing to rent rather than

owning a home because maybe they don't want the responsibility of a 30 year mortgage. is it really is choice because of the last out they want to lead or is it because he literally do not have enough money for a down payment and they don't have the credit score to get a good interest rate. is it a choice or are they being forced into renting? millennials are choosing to become homebuyers later in life. the age for some late 20's to early 30's with the first time to buy a home. on top of that, fundamentally would think it would make sense for renters right now with given how high rents are to make a transition to homeownership but we are not seeing as much as we would ask you to see and that is a lot of times driven by the fact that it is hard savings for a down payment given high rent right now and on top of that, they are not qualified for mortgages and not finding entry-level homes that they can afford. matt: what is the affordability

looking like? you mentioned cities like surfaces go where it is off the hook, but across the country it is original market. is affordability decent in general? in general, yes. we are spending much more blessed historically now then we are used to paying every month. that will permit, so even if they rise 5% or to 6%, i don't think it is an issue. but if you get local, the west, denver, seattle, things are much more expensive and incomes are not keeping up with home value appreciation and we are becoming concerned. matt: and brands are so high is so high itnt impedes the possibility to save for a down payment, so it is difficult to get out of the cycle. nja: it is. i would go as far to say there is an affordability crisis in

the nation. very few markets are affected and everyone feels the pain of rental rate increases while wages, especially at the bottom end of the income distribution, are not doing much of anything. matt: surely the market will meet that with enough supply. so high, people will build more condos and more apartment buildings and went out. venja: we are seeing a pickup and supply but most of it is in the high end. a lot of construction in the luxury sector or high end and not enough buildings in terms of the middle tier or even affordable housing and that is a problem. hopefully the market will come and meet is but it is not happy right now. matt: what about supply of new homes? existing homes supply has been tighter as people are not as urgently excelling as they had been in past years. you see the same thing in new homes? venja: we are up 22% annually

that we still need to see more of that. we should be building more new homes and we should be building more new homes for the middle tier and the entry-level tier. i am really hoping builders will start to build more for those first-time homebuyers. we are seeing a lot of activity in the market right now for move-up buyers but not for first time home buyers. matt: luxury and higher and demand being that by supply but everest we need to see more. svenja: right. a lot of the hot markets we have been talking about, supply is typed across the board but most other market appetite inventories, especially at the bottom end of the value distribution. matt: thank you for joining us. svenja gudell, chief economist at zillow. still ahead on the bloomberg "markets a," we continue to cover the volkswagen scandal. ♪

matt: welcome back to the bloomberg "market day." i am matt miller. julie hyman is back with us today, fortunately for me and do, to give us a look at how markets are run. it slowed almost to a halt yesterday when you were out. we had very little volume and little direction. julie: i was not the only one out for the jewish holiday, so that is one of the reasons perhaps we saw lower volumes and action but it is back with a vengeance. we are seeing the selling across the board in the major averages. it looks like there are a couple of things going on. on the one hand, there is this sort of uneasiness on the part of investors on not knowing what will be happening with the passive interest rates. janet yellen speaks after the close of trading today, so investors will be paying

attention to what she has to say and there is also this continued decline in commodities. we are seeing a lot of real effects from that on corporate earnings. the latest example is caterpillar coming out saying they will be cutting 4000 to 5000 jobs. that amount could be as highthas 10,000 jobs going through 2017. the are cutting their revenue forecast to 48 billion dollars from $49 billion. if you take a look at my bloomberg terminal, actually, i'll tell you. it looks like the company could see a multi-year slump in this revenue growth -- growth. it is continuing. this comes back to what we have been seeing a commodities. the company has a substantial business that caters to the energy industry and to the mining industry as well. problem for the company. if you take a look at some of the other construction equipment and mining equipment or anything

having to do with machinery, we are seeing declines so joy global for example is trading lower, deer has been trading lower and industrials have been leading declines as far as today. as we have seen recently, when we got lower at the open by substantial amounts, state 1%, does declines tend to have accelerated over the past month or so and that is what we have seen happen today. that they drop at the open that gains steam in the first hour or half hour of trading. matt: thank you very much. aquifers and covering markets. the federal reserve has been the target of a lot of criticism -- back with this and covering markets. the federal reserve has been the target of a lot of criticism for the way he explained itself. the fed's communication strategy is a driving investors crazy. scott ran a them, managing director of wells fargo says e-mail figured out the fed's was rough plastic.

scott: it was. i think what happened was after the non-announcement on thursday, really what i thought was a lack of clarity in the statement, you saw what the market did into close and the new solid happened on friday. i suspect that probably fed officials got together and said we need to do something about this. that is why you saw multiple -- matt: the protection team cannot. scott: that is right. over the weekend, they talked about that. we believe the fed is laying the groundwork for a december hike. we thought that was a high probability, higher than september. when janet yellen speaks today, i think what you will see is when fed generals speak over the course in the next few weeks and couple of months is that they are prepping the market for a small december rate hike. they could affect the market for a small september rate hike. why did they not go? it seemed to be janet yellen thatshe was giving her q&a

she was nervous about the global economy but was a try not to let on which is why they had to send out cheerleaders over the weekend. scott: we had argued that if they would have pulled the trigger in september, they really had not done a very good job of prepping markets. if you look at how the futures market was priced in, not high probability. i would certainly have agreed that september did not do a good job prepping the market. i think they are starting to realize how sensitive the market is to just timing issues. matt: is it a concern that if janet yellen and the fed allow the market to make their decisions for them, isn't that concern? at some point, you have to stand firm. scott: you know as much as i did that frequently in the hike cycles or using cycles, it really does push the fed into action. most of the time, the market is ahead of the fed raised on the fundamentals and how they will play out.

i think that this time, the market is pretty confused. i think they want to see investors -- investors want to see clarity. i think we will start to see more clarity, but even if the ,ed hikes rates in december next you, maybe we see two hikes after that. matt: we saw a temper tantrum in august about this i think and reaction to what happened in china. thee just pointed out that machine companies are pushing down lower, lower than august lows. where do you want to invest right now? what is a safe place to be? scott: julie talked about industrials and they are one of the sectors that we like. when you look forward 12 months, 18 months. matt: global, caterpillar, deer? in general, the sector level. they have been outperforming since july.

think what you will see it as we will have better performance economically in the states, modest performance, and then you will see better news out of china. news that says, this is stabilizing. you will see better news out of japan and the eurozone. industrials, technology, consumer discretionary sector, we want to be in sectors sensitive to a continuation of the recovery in the states and better news abroad. matt: scott, thank you so much. scott wren, managing director at wells fargo institute. a reminder that at 5:00 p.m. eastern, we will have live coverage of janet yellen's speech at the university of massachusetts. it is called inflation, dynamics, and monetary policy. we will be right back. ♪

matt: welcome back to the bloomberg "market day." i am matt miller. a quick look at the markets because we are seeing triple

digit losses on the dow jones industrial average. we are getting down to the lows of the session, a drop of 1.5 percent, 16,037. some people think the dow jones is too narrow and we should look at a broader index, so let's look at the s&p 500 down one point 3%. the nasdaq off 1.4% as tech stocks fall or the 686. bonds looks like were investors are going. as you know, when you buy treasuries, yields fall. we see a drop in the two year told and four basis points 0.66%. the tenure at 2.09%. the 10 year to 2.09%. let's turn to top headlines. tragedy in saudi arabia as 1770 worshipers died in a stampede during the annual pilgrimage. more than 2 million pilgrims are theng part in and it is

deadliest stampede since 1990 when more than 1400 were killed. agreed tonion leaders spend an excellent billion dollars on humanitarian aid for refugees but they are split on how to police the continent borders. leaders of the bloc met in brussels and that eu had suggested putting border control under an eu agency. vladimir putin would like the u.s. to attack islamic states but he is willing to go it alone if the u.s. says no. russia's president is preparing to launch unilateral airstrikes against the militants from syria. putin would rather have the u.s. and allies cornet the campaign to russia. the obama administration has resisted. china's president will meet president obama tonight at the white house. talks in d.c. could be mor confrontational than his appearances in washington, state. he visited boeing and spoke to some of the top business

leaders. xi told her that entrepreneurs can bring the u.s. and china closer together. >> entrepreneurs are the driving force to promote development and entrepreneurship is an important story of strength to overcome difficulties. i hope they will fully leverage this with an enterprising spirit and bring more success stories to make new contributions to the growth of chinese and growth for the two countries. matt: the obama administration is at odds with china over cyber security. first official visit and he will attend a state dinner tomorrow night at the white house. the senate will vote today on stock cap funding that would keep the government next wednesday but it is not expected to settle anything. the bill does not include money for planned parenthood and democrats plan to filibuster. mitch mcconnell his that he will offer a new plan that includes

funds for the women's health organization but the house has only three sessions next week before federal agencies were not of money. once toican senator open another phase in the hillary clinton imo investigation. says anassley of iowa independent authority to determine whether hillary clinton deleted official messages. the computer server she turned over to the fbi is being checked for deleted messages. the server ran the private e-mail that mrs. clinton used as secretary of state. those are some of the top stories we are following at this hour. in focus at bloomberg, fed chair janet yellen will speak tonight at the university of massachusetts. markets are waiting her speech which is titled "inflation, dynamics, and monetary policy," to see a she gives clue of when the fed will raise rates after it failed to act last week. joining me now is bloomberg economics editor like a wiki. -- mike mckee.

will she use this speech to commit to get what she wants to do as far as rate policy? like: that's the first question. will this be an academic speech and talk about academic series which was the theme of the jackson hole conference visit, or does she is the opportunity to build on an academic team and talk about current monetary policy issues with inflation? if she does that, people want to know when does she see inflation becoming enough of a danger that the fed really needs to focus on raising interest rates? the fed forecast they put out at the press conference last week is that inflation rises at a slower rate going forward than it has been. there does not seem to be any urgency for the fed to get going, and that has the markets confused because of the same time they are telling us we have reached almost full employment. she said there is a case for raising rates, so people are confused at what the fed is looking at. matt: when we were watching the

fed decision and you and tom keene were talking about the phillips curve and the possibility of it being broken, it really struck a chord with a lot of people. we have 5.1% unemployment that there is really no upward pressure on wages. do we need to get down further as far as unemployment is concerned or is there a structural problem? open debates an that people don't know the answers to. the folks at the fed, including janet yellen, think they need unemployment further down. the more wage pressure that will generate and there are anecdotal reports that at the higher end for jobs like computer coders and other technical people, it is getting harder to find people and companies have to pay up. on the other hand, you have caterpillar cutting 5000 jobs today to try to keep costs down. you have disinflation very -- pressures coming

from the personal side and it is hard to tell where the economy will come out and were inflation will come out. nobody knows what the fed will do at this point, whether they want to keep stimulating with ultra low rates or just go to two ultras. matt: does janet yellen address this directly? we ve economist on all the time like alan krueger from princeton who says the reason you have so much, for example, or so little precipitation -- participation historically is that demographics of the country is changing but it has to come from somewhere and it can't come from retirees. increasedslack has and we do have fewer workers but the question is how much of it is demographics and how much is discouragement? alan krueger argues a lot of it is not discouragement mosey demographic. fromthose people are gone the labor force i want go back. a number of others say there is pool of people who would come back and we saw this in the 1990's when we had such a strong

economy and unemployment got down into the trees. retirees decided i might as well work and make a little money because the economy is so strong and there are those that didn't even if we see a lot of people leave the labor force, they could be enticed to come back. or that, we need wage movement. matt: bloomberg news has drawn parallels to the fed's failure to raise rates in september and the possibility that janet yellen will raise rates of december with ben bernanke is there your to start in 2013 and then he started in december. you think people make that connection? mike: they are making the connection in the sense they don't think the fed has a good communications policy. on question is if they plan december, did they start to tell people in advance it is coming? when the fed did not going september, they talked of the possibility of a move after that. they said that the next meeting a would formalize the and of this process. if they do that, maybe they get

back in the ballgame but you have people like citigroup coming out and saying based on what we know now, we don't think the fed will move late into the first quarter of 2016. if the fed has a message for december, it is not getting across to the markets. matt: maybe that is a janet yellen will put across a 5:00 p.m. thank you, mike mckee, joining us. radio and bloomberg bloomberg televisi for complete coverage of the fed chairs speech at 5:00 p.m. eastern tonight. if you are not near a radio or television but you have a computer, it will beyond bloomberg.com. still ahead, we will get you caught up on what is happening in markets around the world. stay with us for global look at stocks. ♪

matt: welcome back. one hour into the market date and we went to give you a look at some of the top stories we

are following. first-time claims for unemployment benefits rose less than expected last week. the weekly number was up 3000. aything under 300 is seen as sign of an improvement in the jobs market. a new poll shows that most americans agree with the theme of donald trump's campaign. the bloomberg politics poll finds it 72% of those surveyed think the u.s. is not as great as it once was and it also says americans are fed up with politics and suspect the wealthy have an unfair edge and take the country has gone in the wrong direction. fell 2% durable goods last month, less than expected. a strong dollar and china's economic slowdown has hurt demand and durable goods are products meant to last at least three years like refrigerators and cars. sees a bear market in copper for years to come. the firm says prices will slump as interest rates rise and consumption levels off in china.

2015 could see the largest drop in the medal since the financial crisis and it could last through 2019. senator elizabeth warren said the government is dysfunctional for most americans. the massachusetts democrat of paribas not on the "colbert show." those with warren: we have a federal government that works great for millionaires, works great for billionaires, works great for giant corporations, for anybody who can hire an army of lobbyists and lawyers, give lots of campaign money. for the rest of america, it is just not working and it is time to take that government back. [applause] matt: elizabeth moore renewed her call to fight income inequality saying 100% of wage gains go to the top 10% of americans. of the topome stories at this hour. coming up on the bloomberg market day, it is never too early to start holiday shopping.

releasing their annual holiday gift guide and hot list today. we will talk to the magazine's publisher. plus, the folks fog and scandal is far from over. what kind of fines will the company face and how could the operation with regulators tell? and ibm's watson unit is expected to be a huge engine for company sales. that story and much more ahead on the bloomberg "market day." it is time to get you caught up on the market action around the world. let's start off for the naked fell by two .76% and the hang seng dropped less than 1%. the shanghai composite rose almost 1%. one big story, svenja gudell commissions --volkswagen scandal is being felt across agent. >> bw problems are snowballing as regulators from germany, france, italy have scrutinized their vehicles.

japan says a have no plan to launch a probe as no vw diesel cars were imported. the company is reconsidering introduce diesel models altogether. japanese carmakers have already been investing in diesel technology to compete with european rivals with mazda offering a diesel engine mazda models. the scandal could be a blow for asia strategy when they are struggling to revive sales in china, the largest market. matt: let's head to europe or mark barton is standing by. mark: stocks in europe have fallen to the lowest level since january. investors waiting for janet yellen's speech a little later. minor sinking to the low after that goldman sachs report for casting a slump in copper to $4500 a ton by the end of next year. that is if the fed starts to raise rates and demand stalls in

china. a bit of a lift from german business which unexpectedly rose. that is because of domestic demand striking off fears of lackluster demand in emerging markets. still, you can see the feel of the market. this is an interesting story. sinking to a 12 year low -- the norwegian krona sinking to a 12 year low. that is after the unexpectedly cut interest rate to try and shield the economy of the slumping oil price. by the way, the oil price is relevant for no way because it is europe's biggest oil producer. that is the currency story of the thursday session. you can seat money, stocks down, and u.k. yields, italian yields, and german yields all lower today. i cannot not talk about volkswagen because it would be

crazy of me not to. alkswagen rebounding for second day. still awaiting a replacement for martin winterkorn. bmw shares down by 6.2% today. the magazine reporting that it's seb admits as much as 11 times the limit for evolution within the eu, so it seems as if w scandal is spreading and not confined to european carmakers like volkswagen. over to you. julie: a lot of concerns on what it could mean for the u.s. auto market as well. we are seeing considerable selling across the board with u.s. averages all down by at least 1%. the clients have been accelerating. spurring theeally selling in the industrials which is the worst-performing group but material shares doing

poorly. within that group, it is not necessarily the miners doing the worst but the chemical companies. to be a lotot seem of news spurring them downward and health care shares selloff but it is not the biotech's leading narrative like the past days. some of the hospital stocks are selling off today. i mentioned commodities. let's take a look at what is going on. copper and oil are both on the decline today or they were on the decline. looks like we are seeing a turnaround after they both hit a three-week low. also, take a look at rates today because sprinkled in the investor calculus today is of course that janet yellen speech that will be happening after the close. in advance of that, we are seeing 10 year yields get closer to 2%, so a decline on this uncertainty over what will happen with rates. we are also seeing the dollar decline versus a basket of currencies and people factoring in that norwegian krone

interest-rate cut that you just heard mark barton talk about. the dxy heading lower today. matt: i just wanted to pull up oil because you mentioned that it was down this morning. clearly it was down to about 4370 -- 43 point $70 a barrel but of a turnaround about half an hour ago, so oil taking back off just around 10:00. this is kind of a roller coaster ride we saw for crude. we were down after chinese pmi and we jumped on the inventory number and fell again on outputs. looks like a reversal of what we saw yesterday. still ahead on the bloomberg "market day," attention. say hello to a new barbie. not only does she talk back, but she tells jokes. we will get cold tech toys for your kids when they come back. ♪

matt: welcome back.

i in matt miller. it is not too early to start your holiday shopping for at least it is time to do research. the publication "toy insider" releases holiday gift guide and their hot list for different categories of toys. here to talk about tech toys is the publisher, lori shock. theput together a list of top 12. i don't think will have time to get to all of them, but why don't we start with something strange. we saw barbie and we were showing video that i believe you can plug her in? lori: this is an exciting time because forever we have been talking to our toys, right? talk hello barbie will right back. she can have a full conversation with speak recognition and a progressive learning feature so that when you tell her your favorite color or your favorite food or subject in school, she will remember it and be able to have a conversation with you.

it is really exciting. matt: is barbie more realistic? that she wasncerns setting standards that no girl could live up to. have they change it or is that why she is popular? lori: she has always that controversy but still the reigning queen of the toy aisle. i grew up with barbie and i wish my talk back to me. she is not coming out until november, so we have to wait a little while before we can play with this one. matt: but she will still have impossibly long legs? lori: they are a little thicker because of the technology inside. getting stronger. speaking of high-tech tech, a couple pieces of gear on the desk. one of them looks like a laptop. last year, i was buying fires, kindles -- of the things children want are what mom and dad have.

one of the things is a hybrid. this is the first time we are putting a microsoft office 1- in-1 -- two and one in front of our children. we have our keyboard we can take this apart. kids can do their homework, they can write papers but we are also loaded with over $200 worth of games and app.=s. when kids are done, they can play. we know that smart wearable technology is a big trend. matt: this also introduces kids to windows. lori: for the first time and for one year, it is free. matt: then you have to watch, like an apple watch or some kind of smart watch. kids want smart technology, too. this is our smart watch dx. we have loads of games for the kids and we have a touch screen that we can swipe.

we have games on here we can play and there is a video camera and there is a pedometer so it is an activity tracker like mom and dad are wearing. matt: well. it is making noise. how much is this thing? is a $64, a lot cheaper when you buy the apple watch. matt: what else do you have that could be on the hot list? lori: another trend is the exciting things in our same. drones, our sky viper hd video drawn with a camera, video and kids are flying this from novice flyers to the most expert flyers. they can fly it, take camera pictures and it is really cool technology and the kids will love it. matt: but you can't use it in washington, d.c. isi: this is a toy, so it

under $100, you can only fly the subject to hundred eight. the con -- to 200 feet. the controversy on these is the one seco over 400 feet and above and over that $100 price point, so it is a different kind of thrown. matt: they have been popular for a couple of holiday seasons because i have nephews who are seven or eight years old and they love it. they love flying them and you can see everything going on. they are easy to fly. matt: so you won't poke your eye out. that is always a concern. lori: it is like ma for children. list,you have 12 on the smart watch, laptop, drone. any regular toys? is there an elmo? lori: there is. he has 150 different phrases and kids will adore him. favorite monster.

in terms of technology, there are robots kids are learning to program. 600 pieces that kids can put together in six different motors in it. the art learning how to program the robot. the robot is listening to them. there is that voice recognition. they can lead to the kids along in doing programming, so pretty awesome. matt: lori shock telling us the hottest toys that wall street masters of the universe and spend all your money on this holiday season. coming up in the next hour of the bloomberg "market day," volkswagen needs to find a leader and that leader will have a major must the cleanup. will discuss the harsh realities facing the company and industry. ♪

a.m. in new york and 4 p.m. in london. welcome to the bloomberg

market day. after apologies and the resignation of the chief executive, what is next for volkswagen? top: plus, ford's oncutives giving their view this. i have a one-on-one interview with the president of the americas. speakjanet yellen will today. we have a preview and a special report. that's 5:00 p.m. here on bloomberg. good morning. in pimm fox. am him out. p --imm fox. matt: and