who uncovered it all. first superd it pickup. i sat down with the president of the americas on the bold new look. mark: could hollywood be headed off a financial cliff? we will hear from the analyst to says there are too many secrets. manyo says there are too secrets. somebody got caught between a rock and a hard place. matt: i don't want to destroy television viewers have. like a rock. bob seger did that song. we are talking about ford, not chevy. i am not sure that is a play on the competition.

we are seeing drops across the board. not a good day if you are. almost jones falling 200. 16,095 does not look as. as bad. up 46 92. looks like investors are running for the state the of treasuries. as you know, when you buy treasuries you push down the yield. mark: we see oil climbing, the lowest level in more than a week . take a look at the chart, nymex crude up over half a percent at 44.7 three. taking a look at west texas, a big turnaround.

brent crude is higher as well. brent is up .8%. more on volkswagen. west virginia university is where they discovered early evidence. i can was cheating autonomous vehicle emissions asked. " only from west virginia university, he helped lead this ready. cap entitlement joins us, our bloomberg auto intelligence. matt tienan joins us. we are thrilled to be joined by your. we have been reading over the studies. can you walk us rua timeline of

when you got to the findings and when you release them to the most of theic? public only became aware of this on friday. >> actually i became aware of the frenzy on friday. we did this testing in the spring of 2015. that testing concluded at the beginning of summer. we actually engaged our colleagues at the california resources board to their five the vehicles were behaving as we should. their data was significantly data than our data. us we wereirmed to not making poor measurements, it was simply there were new errors

that the vehicle was not performing that way. it took about a year to go through the data, write the report. it was not something high profile for us. we work with our colleagues. we get to our data presentation together. we publish the report on the website. matt: kevin joining us from princeton. what are we to make of the data? to be goingd terribly wrong here, whether that was through negligence, whether it was done on purpose or just an oversight. i think dan can speak to this, we often see the results in the lab are different than in

the real world. there are often several different types of tests that will yield different results. it is often difficult to find which is the number that correlates to what we would actually say if we were behind the wheel driving a vehicle. mark: i matt: it is interesting they put up this in 2013 and the finding march 2014. it almost seems as if he heard about it for the last time last week. can you believe senior executives at volkswagen did not know about the discrepancies and figure out why they were happening until recently?: >> that would seem to me, and thatee what the fallout

essentially somewhere wrist the entire enterprise to cheat on device.s for the defeat this is not part of the problem emissions on, but nox are the real problem, apparently 10-40 times the legal limit for one of these vehicles. it is very easy way to keep the emissions cleaner? two volkswagen vehicles had two different technologies. we are done a lot of work. it is really of physics chemistry and thermodynamics problem.

there is a complicated trade-off between drivability, durability and fuel economy. the small tests are almost always done on the same type of equipment. mog tests are a most always done on the same type of equipment. >> a lot of people get the impression this was a small, call to later -- calculator type device. it is a number of suitcases that takes about eight hours to install on a vehicle. matt: we're hearing the ts mueller will be nominated as mueller will be nominated. is it possible he did not know anything about this, and how different our porsche's engines? orsche was not one of the

vehicle. liter.e the 2.0 nothing from porsche involved in what would be the recall. it is entirely possible. porsche is busy enough running that business and running a very effectively that is in -- that it is entirely hesible that she -- that neither had the opportunity nor wherewithal to know those things. most modern engines the exhaust to pull out of the gases. is that what is missing? would that solve the problem? technology dide have that type system. the jeddah has a lead nox trap.

the system was there. it is just not active as much as it needed to be. ask, we are to talking about 11 million cars. what does this mean for the owners. >> you are dealing with clean diesel, performance and cost. more important we what is this strategy. does diesel work? not only with the low numbers or even wheres. the diesel penetration is much higher. is this a single technology interimrward. matt: director at the center for alternative fuels, emissions cafe. that would be a fun acronym for the cafe standards from the west

virginia university. fascinating story. >> think about how is -- biggest business is for the german economy. one in seven germans work in the automotive industry. volkswagen has 6 million employees globally. this could, if it goes wrong, severely affect german exports and even affect your rope. it is a big enough problem to really affect the currency. looking at the other top stories we're following up this hour. a historic day in washington on capitol hill, pope rance is addressed a joint meeting of congress.

he touched on a number of issues including immigration reform and an urgent appeal for action on climate change. >> i have no doubt the united have annd this congress .mportant role to play [indiscernible] now it is time to implement a culture of care and an poverty.d approach of mark: he is the first hope to ever address -- address congress . he has there shortly. matt: the president will meet with the president of russia

tuesday. they will begin new york therefore a meeting with the un's general assembly. president obama once to see if he can make progress over their differences over the conflict in ukraine in syria. cutting up tolar 10,000 jobs over the next four years in restructuring plan. plus, caterpillar cut the sales forecast. the company is heading for the first full-year sales decline ever. caterpillar is hurt by the global slump in commodities. there was a decline this week and average long-term mortgage rates following the decision to people target rate at record lows. fighting -- freddie mac says the rate is 2.68% down from 3.91 a week ago. the 15 year rate fell as well. in the world of agriculture, a growing buzz about be stealing.

-- bee stealing. now they are being stolen in australia's prime all men growing region. 5 million bees have been taken in the past two months. australians are trying to grow them because the caliph on your drought is hurting production there. those are your top stories at this hour. still ahead, a preview of what janet yellen may say in a speech later today as markets fall in lastake -- in the wake of week's decision to leave terest rates unchanged. ♪

matt: welcome back to the bloomberg bloomberg "market day." -- mark: welcome back to the bloomberg "market day." getting a look at the

markets with julie hyman. finally moving. not say finally moving. i was not here yesterday. that hase a sellout been going on today. people waited or janet yellen to close after the speak -- after today. hoping for more positive coming out clear. off, have stopped selling people going into gold today. one thing conjured into the stock sell up and the rising role, economic data out this morning that showed orders for business equipment installed in the united states as part of the durable goods orders report we got. we have shares of newmont mining on the rise. s&p 500.stock in the it has rebounded by 6% from the low it reached a month ago. that is much smaller than the rebound in the other commodities. 10%for example of more than

from its lows. nonetheless, the rest of the commodities have been somewhat volatile today. gold and gold miners have been doing better. mark: the federal trade commission has been aggressive lately and blocking acquisitions. it seems we have one company that has been successful in fighting back. a medical sterilization company has been trying to buy cinergy health. a nearly $2 billion deal. today they succeeded in the bid to overturn that s ftcattempt to block video from happening. 's the acquisition block between cisco and u.s. food earlier in the year. another one pending. we are seeing office depot and staples on the rise.

staples and office depot will also go through. the shares are rising. much.thank you brave senior markets correspondent julie hyman. investors are selling stocks ahead of janet yellen's speech at the university of massachusetts, the first apparent since they left rates on hold last week. mark: chief u.s. economist carl riccadonna joins us now. what can we ask that gekko what -- what can we expect? >> i think she said everything she had to say in her press conference last week. there has not been a lot of new information. durable good the highlights of the week. they were more in line with expectations. sales. the ongoing story of housing looks decent.

majort think she has had the fedon in light of meeting. what today will provide us the opportunity to possibly refine her message or clarify things she mentioned in the press conference that she feels have been blown out of her portion. for the most part she does not rock the boat. matt: can i add you had called before the meeting last week, so nice job. it seems to me the fed is more concerned with what is going on elsewhere. the message has been the u.s. economy could handle a 25 point rate increase but the rest of the world we're worried about right now. right. they are concerned about how will impact global

growth process and will feed back into the u.s. economy. that is a major concern. part of that concern is concerns about the strong dollar. when the ecb is hinting about additional rounds of easing, ints it will resurface. we have not gotten that much new information, but it has confirmed weak performance. you mentioned it is not the u.s. federal reserve that the central bank. repercussions. the emerging markets have been watching this with a keen eye because they need to know how it will impact them. >> absolutely. as the fed raises rates there is a risk out of capital flight of the riskier areas and into those economies that are raising rates. history shows that tightening cycles have not been kind to emerging-market performance from the 1980's all the way up to

last economic cycle. a very valid concern in the economy. matt: i can see what fed funds interest rate mean. i can see there is a 30% chance of a fed rate increase rate next month. what feeling do you get from investors as far as expectations. everyone expects a rate increase in december. >> there are lots of members of the fed that it back to see rate raised by the end of the year. i think already too much damage has been done for october 2 realistically be in play. realistically be in play. i think people are in -- read too much into occur

international concerns in the press conference and maybe they are writing the fed off as not going to this year. thing wallis the one street ones to hear from janet yellen client? >> they want to hear further clarification on her concerns about the international governance. mark: carl riccadonna joining us in studio. thank you. into these sure you tune bloomberg television and radio. not both at the same time. one or the other for complete coverage of 5:00 eastern. if you choose both means then you can use the internet. we will also have this live on her website. ♪

mark: welcome back to the bloomberg "market day." tragedy today and saudi arabia. more than 700 worshipers are dead following a stampede in a tent city near mecca during the annual muslim pilgrimage. more than 2 million pilgrims are taking part. the stampede is the deadliest since 1990 when more than 1400 were killed. a war that has lasted five decades. a peace treaty within six months. the rebel will start to disarm six two days after that. the fighting in colombia has led to 200,000 deaths. closing --esia pledging to reduce greenhouse gas emissions by 29% by the year 2030. the world's fourth-largest country says it will strengthen

it can reduce emissions even more with international support to include access to support and technology. those are your top stories at this hour. all eyes waiting to see you what say when shewill speaks a university of massachusetts amherst. markets have been down since a week ago today since the fed decided not to move on rate. matt: now testing the august lows. many of them have artie gone there. i will be watching at 5:00. you are splitting. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. matt: welcome back to the bloomberg "market day." i am matt miller. wants to openator

another phase in the hillary clinton e-mail investigation. chuck grassley says an independent authority should determine whether she'd deleted any official messages. the computer server shoe turnover is being checked for deleted messages. show most americans agree with the central theme of donald trump president -- theme for president. 72% of those surveyed think their country is not as great as it once was. it shows americans are fed up with politics. they think the country is going in the wrong direction. fell lastods orders month, down 2%, less than it acted. a strong dollar in china's economic slowdown of her demand. durable goods are products that are meant to be used at least three years like refrigerators or cars.

sales rose last month at the highest rate in 7.5 years. 2000.ual rate of that was much higher than the median forecast. those are your top stories. ford unveiled the first aluminum pickup at they texas state fair in dallas. yearsedesign follows last and50at went on sale december. earlier i spoke about this with the president of the americas. -- f-150. to 350 poundse up because of the aluminum body. frame.is a fully boxed add a lot more capability to the axle. this truck is all about work and only work. we are not giving up numbers for

fuel economy or towing or hauling but saying it will be the biggest super duty ever when it comes to these metrics. matt: you had a tough time getting up to speed with production. it was reflected in the sales numbers all year. are you there now? have you got the capacity, the inventory to get your numbers back up? months the past couple the sales have been very strong. last month results 71,000. we are getting the inventory there. we're not quite there yet, but we are very comfortable with where we are. we always knew we would have a dip in the late spring and early summer because of the capacity coming online with kansas city converting over. now we feel really good about the inventory and feeling good about the sales. we will have that series b the truck leader again for the 39th straight year. we will make a 40 with this great truck. turbodiesel power stroke

make me salivate a little. technology? all that we are hearing about diesel does not seem good lately. we have been building diesels since we launched it in 1999. for the very important customers because they need the torque. we develop the power stroke diesel engine several years ago. we build it ourselves and are very proud of it. we are very confident the results in the lab match what you see on the road, and we are excited about how the diesel performs in the marketplace. over 60% of sales are 6.7 power stroke diesel. matt: are you worried that sales are going to fall now that we see this old slacken scandal -- ?olkswagen scandal emerge

>> the car market suffer. those who need this for work, for telling, front end torque, they still love the big diesel. they have been in the market for quite some time and very well received. you do have ramification on the car side, but on the truck side, they want and need diesels. matt: let me ask you about the volkswagen scandal. you have had your issues with the epa. do you think it is industrywide? i do not think it is industrywide. ford is proud -- of being named one of the most ethical companies. we went to the epa inside we found this problem and work together to make sure it is right and then we take care of our customers. i think there's a lot of implication when it comes to the degree we have to test these

vehicles and configurations. we are confident and no these vehicles perform on the row. we continue to evolve in that way. we will work together to do that . that is something very much in our own interest. matt: do you think they will lobby for more real-world testing like more standardized testing for different regions around the world? >> we certainly have been supporting that and working close the with the epa to make that happen. --supporting that and working with the epa to make that happen. there is so much advancement, we have to keep up in the vehicles.

we look forward to being part of the solution. matt: ford's president of the hinrich. joe coming up, took times at caterpillar. why the company says it will cut up to 10,000 jobs in the next four years. is this really a strong economy? stay with us. ♪

matt: welcome back to the bloomberg "market day." i am matt miller. checking on commodity prices. .tarting with diesel

added to the commodities flooding global markets from china. the generic means the front contract for diesel. the country exported a record volume of the fuel last month after shipping unprecedented amounts of deals and aluminum overseas. diesel at fort are a risk. exporters are a risk. 19 .1rude rose to million. wti rose for the first time as it turns as much as 1.6%, the difference between that and brent. that lightning. take a look at the spider s&p oil gas exploration and production index, again gain of .6%. the mining and

energy industries is why caterpillar reduced the sales forecast, saying it would cut as many as 10,000 jobs the result of that as well until the cycle turns there is not much caterpillar can do. shares of the biggest mining and construction machinery a fracture fell as much as 7.9%. they are heading for the first full-year decline in 90 years. for more, i want to bring in carol uber hahard. thank you for joining us. when i look at this tory i think the u.s. economy is not as strong as i thought. caterpillar cut 10,000 jobs but really a result of the emerging markets that is the heart of the problem. >> the commodity weakness is in large part of china. more broadly, emerging markets. then we have the collapse in energy prices impacting the domestic market, and they make a

lot of money in the commodity-related equipment. is attorney general and that is the other high-margin business. matt: how much of this is overseas, and how much of it is at home? joe hendrix has said this is sales.fected the f-150 >> one of the problems it has gone into other markets like the construction market. the u.s. construction market has been the strongest market for caterpillar. there has been overflow into construction market. another negative. the one thing they can hang their hat on, and that is gone, too. new home sales rising. people are building houses. what is the problem?

nonresidential members as well. there is a digestion impact where we now have the excess equipment that might have been going into the energy markets. now the what do we do with this. -- now what do we do with this? we have to use this before we see a pickup in new equipment demand in the u.s., and i think that will be one of the stronger markets. matt: is this specific to caterpillar? i see joy global going down, united rentals, dear going down. all of the machinery makers seem to be going down. at least on the stock. it is clearly not just caterpillar. tied companies are not as to the heavy equipment market. the otherst is in

you mentioned are all getting hit. and has a huge exposure to energy and metals and mining. they are getting whacked a little bit more. products are high-margin for caterpillar. no one can hide from the commodity decline. matt: him and i were talking to an analyst earlier, robert gordon, that had a caterpillar target that was very low. i think his target was less than half of that. do analysts expect this to ?ontinue to fall > >> i think you could say gordon is the most negative on the street at this point. iso think the 5% decline probably not enough. analysts tend to track management guidance. up until today sales down 2%

next year. that's not really make sense because capital spending is expected to be down 20 percent next year alone. companies catching up down five. probably not enough. the price target is $28. faand away the most bearish on the street. thank you for joining us. you get back to the desk. i know your bidet radio and television today. a big story we will continue to follow. let me get a look at the other top stories. citigroup getting out of the retail banking business in massachusetts. they will close next retail and others inton the surrounding area. the financial giant will still offer services to high net worth clients in the boston area. weird since citigroup

is so ubiquitous in new york. goldman sachs has been waiting for a fair market and copper for years. trending 2015 says could see the largest drop in metal and the financial crisis. speaking of one of the world's largest economy, a surveillance team asked yale senior lecturer and former chairman stephen roach to gauge the futility of the global economic situation. a crisis, and we are still stuck to a large extent with the debt that was filed on before or after the crisis. the world has to come to grips with this one way or another. also delaying. we saw that with governor carney a number of weeks ago.

john farrell and london, the bank of america and fed altogether. western pleas for dr. roche. -- question. >> i think what we're trying to figure out whether this is temporary or a structural shift syria and is this a new world, a new chapter for the china of the a good point. for me it is a was a new world where i would not be doing what i'm doing for a living all these years. tom: are you getting enough direct quote yale? >> early in the semester. >> there is a bond market bubble leading to a crisis. what about a commodity crisis? getting back to the point on the brave new world. china is not crash landing.

china is changing the structure away from the old manufacturing and resources intensive model to a new conservative-based consumption model. the economy is in serious trouble. they will likely continue to be so given the ongoing adjustments in the manufacturing economy. tom: this is the nerve region currency against the euro. extended ay how large, developed retro state like norway is. they are way outside three deviations. state norway.tro even the developed economies are challenged. >> they are. we look at the commodity situation area the economists will, my show, your show and come on bloomberg tv and saying this is positive for the developed world but we have not

seen this. it would be interesting to get the view of the professor to gauge what is happening in the commodity market, the positive feedback from lower oil into the u.s. economy. we certainly do not see it in the commodity reducers in the norway's of the world. that is a great points. you have not seen it because the consumers that are supposed to benefit the most from falling oil prices are still dealing with legacy effect of a horrific balance sheet of the recession. this is the weakest time of consumption on record, and lower oil prices are not changing the calculus for balance sheet constrained american consumers. tom: we see steve roach, and you see it on wilfork hd, the philippine central bank keeping the key rate unchanged. everyone compensates to the global system. the media goes china, china. what do you look at through the

roach prism, away from china? what is the compensation part you are paying attention to go? >> china is important. recoveries in the the advanced world are anemic. that is why china gets a seat at the fomc meeting. if our recovery in the united states was as strong as we are being told, china would be a blip on the screen. tom: do you agree with bill gross the fed should have raised absolutely. an emergency policy and the emergency is over. matt: stephen roach with the bloomberg surveillance team this morning. coming up, hollywood could be heading off a financial click a -- according to her

next guest. we will ask wayne. explain.

matt: take me to the movies. 2" expectedsylvania to bring in 36 million, six million dollars of the are so evening three years ago. sequels are the name of the game in hollywood. four of the five this year have been sequels or spinoffs. the next guest says hollywood has a problem in sequels are part of it. david west and will join me. the managing director. he will tell us what the problem is. david westin joins me as well. what is the problem? where thee sequels answer. >> for a while they were. i think what we're seeing now this technology came to life, computer-generated imagery.

suddenly it became possible to make credible movies out of the data that existed, superheroes, lord of the rings. so all of that was reminded , and because it was so successful, we had a lot of. everything comes to an end sooner or later. we are now down to antman. for wille top 24, only be original films. four will be original films. the nature of the cycle is such that the best property gets monetized first. as the market get situated, the market is -- we see the market collapse on itself. matt: you ran abc four years. did you see this as well? cycles

with less original content that you had to rely on older content. >> i never dealt with movies. absolutely you see these patterns. you go through these patterns where there is a lot of dramas and no sitcoms. people say are the sitcoms did? then it should expect the other way. i was there when we had millionaire. we just ran that like crazy. so sure that happens. like they have a ways to go before they stop making a lot of money. sequels still to come out. everyone else seems to have very little original content. >> remember star wars was 10 plus years ago so developing for

a while. disney ultimately will come to deal with the situation. today in the best position because they have the best sequels coming to finding nemo, -- 10 years. >> disney has done this through the years way back. cinderella or snow white would be released vhs,. also, there is other ways to be creative. star wars brought jj abrams to come in. they will rejuvenate it. i think if you make a call now will we have star wars in 15 years? i don't know. nothing lasts forever. matt: this is supposedly the end of the run of the star wars saga . the question is, will there be anything else new? will we have to cease world woman, business

antman film. 1990's for example, the decades of male stars. arnold schwarzenegger, bruce willis -- they were in the top 10. ultimately the industry will follow. the transition of overproduction will manifest itself. >> it is also not revenue simply from the movies. it is the theme parks, merchandising and all of the other things they can keep going for a long time. matt: thank you for joining us. that should be easy enough. managing director. we will be back in two minutes. ♪

matt: it is noon in san franciscomatt:. scarlet: this is the bloomberg market day.

matt: good afternoon. scarlet: we are heading into the final hour of trading. .hird day of losses s&p 500 index headed for its lowest close in three weeks. push closertinue to and closer toward the august lows. asare not there yet as far the indexes, but as far as a sectors, including industrials and machinery. scarlet: yep. matt: we are losing only 60 points. to be fair, we are well off the session lows. downow at one point was 263. so really clawing our way back in late trading today. -- but nout no day doubt, it is a risk off day. lower yields for the two in the 10 year. if you were to look at inflation institutions, take a look and the bloomberg terminal.

an investor expectations for inflation just keeps declining. this is the 10-year breakeven rate. right now, the market is pricing and 1.49% annual inflation over the next decade. if you were to change that affected 2008, that is the lowest since may 2000 nine. remember, the fed target is for 2%. matt: i am going to go ahead and call it to jargon alert. the breakeven rate. scarlet: is the difference between 10 year rates and treasury protected tips. those are the initials for the acronym, basically what investors are pricing in matt: expeditions. so this is an investor look at inflation. -- inflation and fictitious. matt: -- inflation expectations. matt: so this is an investor look at inflation. we see the cpi there.

scarlet: but we are not there yet. let's get to currencies. the dollar is weaker versus the dollar and the end but the real mover is in the norwegian crown and a euro. norwegian krone, that is something you don't scarlet: use that often. -- you don't use that often. trey.t: we are joined by you see global weakness across riskier assets. is the fed paying far too much attention to our market checks in the moves in the different asset classics -- class it's rather than the u.s. economy? trey: the messaging was very poor. it gave the impression that they don't have a dual mandate.

they are not as focused on the dual mandate of wage growth and labor market gains and inflation. instead, they are worried about temporary overseas woes. it would have been better if they came out and said we would like to hike or not because we are off our inflation goal. matt: that is for real. that is -- they are not even close. troy: cpi is 1.8. there would have had plenty of cover if that is what they wanted to do. instead, they sent a message oh, was interpreted as, wow china is having real problems and u.s. growth will slow substantially. matt: we all know that the markets, one of their main mandates as well. the problem with that is they ain't getting anywhere close to 2%. even in october, even in december, even in the first order next year. for real, inflation is just now there and they need to leave

themselves some room to be able to raise when they are so far off. troy: that's right. if they had gone by 25 basis points and said we want to pause and get off of emergency level rates where we have been for quite some time, we would still have ultra loose to loose monetary policy. that would have been one signal to say we are concerned about overseas and the u.s. economy is strong enough. this can expect expectation markets. there is no change over the next -- this gets back to expectation of markets. change over the next year or so. they introduced a whole bunch of uncertainty that was not necessary and they could have just focused on inflation instead. a bigt: there is distinction between ultra-loose policy and loose monetary policy. troy: we haven't seen much evidence of asset bubbles. you look at u.s. housing, deftly not a bubble. equity, definitely not in a

bubble. biotech stocks. you could argue, hey, there wouldn't have been such a big shell revolution. hiking rates, because of a concern over bubbles, we don't think it makes a lot of sense. rates off an emergency level to signal that you have enough confidence in wage gains andof labor market gains would have sent a more positive signal other than saying, hey, we are focused on china. which markets interpreted very negatively. points is 25 basis ultra loose monetary policy. bubbles that you pop are the only markets that you tame with such a low rates like ultra luxury condos in san francisco, right?

tr for they, ino americany: -- troy: for the average american, if your business is going to be affected by a 25 basis point hike, you are making that investments to start with. so where is your biggest opportunity now? look at this selloff, up until august 20 of this year, everything was behaving fairly rationally. that had problems or geographic regions that had problems, they were down in some cases a lot in in some cases a little because the fundamentals had deteriorated. but the regions that had , i.e., thendamentals u.s., health care, consumer discretionary, we are doing better than market averages. august 20, it all started to

change where everything got taken to the woodshed and there was this cascade avenue technical selling. the first thing you want to do as an investor's say, hey, do i have exposure things that are in the crosshairs here? ok, the coast is clear. what can we buy that has been disproportionally technically impacted? and the three things we focused on is health care, u.s. consumer and europe. europe is tougher to call because those markets are a little harder to handicap. but health care is. an area with tremendous fundamentals. . -- but health care is an area with tremendous fundamentals. we are heading into election season. into theseways comes things. it is rational for investors to excel. that create opportunities for the next two or three or five years. we stay focused on those two sectors and maybe add a little bit of europe as well if you

have been underweight there. rightit is silly season now. politicians are going to say things they are not going to act on later, especially if certain drugmakers become donors to their campaigns. troy: yeah. scarlet: that could be of the case for the next year and a half. troy: as long as there is a republican congress, it is hard to enact any of these things into law. every administration seems to exert more executive authority. you are right to be concerned. but it is but -- it is creating a buying opportunity. matt: thank you. scarlet: remember to tune into our special report and janet yellen's speech. inflation dynamics and monetary policy. matt: you can see it on bloomberg tv, here it on bloomberg radio, and on the internet at bloomberg.com, you can do both as well. an f or a look at some of the stories making headlines at this hour. has hired mattias

miller from porsche. he has been with the company for more than four decades. meanwhile, the scandal could lead to a downgrade. s&p says it could cut the rating on the company. winterkorn resigned yesterday as a result of the emissions-- the evading scandal. -- : doubtrancis: i have no this congress has an important role to play. now is the time for courageous action and strategies. i am implementing a culture of

change and an integrated approach to combating poverty, , and at thegnity same time, protecting marriage. matt: not so urgent, but he is the pope. the first pope ever to address congress. he heads towards new york city later today. if you're anywhere around here, get out because you will never be able to move with all the security in place. tragedy today in saudi arabia's mother than 700 worshipers die in a stampede. during the annual muslim pilgrimage known as the harsh. the stampede is the deadliest since 1990 when more than 1400 people were killed. president obama will meet with vladimir putin on monday. they will talk while they are in new york for the opening of the yuan general summary. the white house -- general a summary.

the white house says putin requested the meeting. they want to make progress on their differences in the conflicts in ukraine in syria. obama administration has been resisting, but putin is willing to go it alone if the u.s. says no. scarlet: this time it is for real, vladimir putin has called elton john and agreed to a meeting. pranksters contacted the british musician and pretended to be putin. to talk about gay rights in russia. so elton gets his meeting. those are some of your top stories. coming up in the next half hour, why the results of a new bloomberg politics poll finds most americans agree with the central theme of donald trump's

campaign. ♪

scarlet: we are going to head over now to julie hyman with a look at the markets. another down day. the weakness continues. julie: but it is not as weak as it had been earlier. the major averages cut their losses and half. it doesn't seem there is necessarily a specific catalyst. pointing to a potential reason or more likely an excuse for a bounce off the bottom. if you look at the s&p 500 intraday, you can see what i am talking about. we opened lower

by about a percent and then trended lower from there. off theactually bounced lows. and made a run at unchanged before taking a little bit of a leg lower. bottom line, we are well off the lows of the session. scarlet: if you look at the different sectors, eight out of 10 industry groups are lower. what is notable is energy is bouncing back and utilities also gaining. julie: utilities have been gaining consistently throughout the day. we have yields lower again today. utilities do better when rates are lower. you've got energy and utilities in the green. everything else is pretty much in the red. but there is a magnitude issue. most of these groups have paired their losses. health care, financials, industrials and still remain the worst performers. if you take a look at what has gone on with oil prices, you get an idea what has gone on with the energy stocks. you saw oil fallen nearly morning and then come back. it is napoli much at the highs of the session.

i wanted to look at the best and worst performer in the s&p 500. that tells us something about the broader story today. caterpillar remains the worst-performing stock in the s&p 500 after the company said it was going to cut four to 5000 jobs in the next two years and as many as 10,000 jobs over the next three years. it also cut its revenue forecast for the full year. it was pulling down the rest of the industrials. it is still doing so. mining is the best-performing stock right now i'm -- and is rebounding along with gold prices. as you saw, oil prices as well higher. people have been looking for what they perceive a safety today. gold is one of the places they have been going. mining has been benefiting from that as well. newmont mining has been fan -- has been benefiting as well. the world's second-largest

energy services company says they cut about 2000 jobs since july. halliburton says it will make further workforce reductions, primarily here in north america. the cuts could get as highs 20,000 when they are finished. a rip the look and senator wants to open another phase in the hillary clinton e-mail investigation. to determine whether she deleted any official messages. a computer server that she turned over to the fbi is now being checked for deleted messages. the server rent a private e-mail the hillary clinton used as secretary of state. ran a private e-mail that hillary clinton used as secretary of state. democrats plan to filibuster. the house is only three sessions left next week before federal agencies run out of money.

those are just some of the top stories we are following for you at this hour. scarlet: we want to talk some politics now. the latest on the bloomberg politics national poll found that 72% of americans say their country isn't as great as it once was. that is the central theme of donald trump wil's campaign. 66 percent of registered republican voters said no. only 24% said yes. i want to bring in phil mattingly. phil, is this unexpected? people if things were better when they were kids, don't they say yes? scarlet: back in my day -- matt: kids these days, things ain't what they used to be. phil: the size of the difference right now is the most notable thing.

72% said politicians were simply out of touch. if you want to know -- matt: you don't think people trust politicians? i can't believe that. phil: if you want to translate what this will actually means it to the political's rewrite now, look at three of the top four people in this actual national .oll donald trump, once again, number one. ben carson a solid number two. and carly fiorina number four. those with no political experience are clearly casa fight as outsiders. they are running a campaign specifically talking about how they have no relationship whatsoever with washington, d.c. is that a rarity in politics? no. people truly represented and the electorate

is responded so far. scarlet: the way you ask it, you might expect the answer. what were you surprised by when you saw the results of this poll? always tap into the crosstabs of the specific candidate. rising so carson fast? anti-politician. but his nature is the opposite of donald trump. his favorability ratings, 60% favorable of people to recognize ben carson. 10% unfavorable. those are skyhigh numbers compare david else. the other thing, just in general, what are people interested in? you talk about the republican debate up to this point has been very national security focused. people still care about the economy. it's a jobs, unemployment and jobs by far and away number one. decline in income for real workers runaway number two. there is is -- there is ice is in their bank, but it is -- isis is in there.

but far and away it is the economy. scarlet: tune in tonight at 5:00 for "with all due respect." new surveywill do a tomorrow on news car salesman, how americans feel about them. scarlet: and the former u.s. ambassador to the vatican will be the guest. speaking of the vatican, these are live photos of the pope in manhattan in new york city. matt: he is still in washington, d.c. scarlet: greeting the people. matt: hundreds of thousands along the route. people waiting days and days to see the top effects. and here they get a chance. something they will probably never forget. they will remember this lifelong. scarlet: and they are all taking selfies to commemorate it. ♪

matt: hans nichols is covering the story from will smirk, germany -- from wolfsburg, germany. moeller will confirmed as ceo of volkswagen friday. according to people familiar with the matter, he is the clear front runner. he appears to have edged out herbert dietz, who recently came over from bmw. ehller is a former toolmaker. he has turned porsche into a profit engine. 3 billion in profits in 2014. that is on vehicle sales in less than 200,000, which they could make as a high water mark this year. so going from a smaller luxury

brand to running the entire they have 12and different brands. it will be a transition. he appears to have their banking -- they're backing and he is likely to be announced tomorrow. confirmed yet.en just to be clear -- scarlet: this is our reporting. matt: a number of other outlets have reported this as well. madea's mueller matias mueller. they need to get past the scandal. if you bring in someone who has been with the company for decades, does that help you? it has been with porsche, the most successful unit of volkswagen. scarlet: and there is contention

between volkswagen and porsche. matt: that's right. mueller was there leading candidate. but the question is how much did you know about this and how could he not have known about this? story will see this unfold. it is the gift that keeps on giving for journalists. scarlet: an matt miller is enjoying every second of this. matt: i will be back until tuesday. scarlet: much more coming up, including chicago's fiscal problems. rahm emanuel trying to fix the city's benefit. -- cities deficit. it will not be easy. ♪ sure, tv has evolved over the years.

it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. scarlet: welcome back to the bloomberg market day. we begin with ford unveiling its new line of super duty pickups. cars likerst time,

the-two 50 are getting a new aluminum frame which helps shave off about 350 pounds -- cars are getting a new aluminum frame which helps shave off about 350 pounds. whenthink their locations it comes to the degree we have to test all of these vehicles. ourre confident and we know vehicles perform on the road. we do not used if he devices. we will work together to do that. that is in our interests as well as the consumers'. scarlet: he says in missions cheating is not industrywide. -- he says in tradingcheating -- he says in

emissions cheating is not industrywide. the 15 year rate to decline appeared protested below 4% for nine straight weeks. sales rose last month to the highest in seven and a half years. sales were up 5.7% in august. that was much higher than the median forecast. himt-time claims front of and benefits rising less than expected last week. the weekly number was up 3000 to 267,000. having said that, any figure under three who is a sign that the job market is robust and improving. another one that we are monitoring is chicago which faces a major physical challenges. mayor rahm emanuel this week announced his proposed when he 15 budget that attempts to close a $6.8 billion budget shortfall.

with the city facing a toxic combination of mounting pension payments and plunging ratings, how will the mayor fix the problem? what was your biggest take away from rahm emanuel's 2015 budget proposal? tracy: there will be a very large rise in property taxes. that will be commercial and residential. i say they can actually raise him a $600 million over the next four years. said what the short follies. kind of a drop in the bank honestly if you're thinking about it. it also does i can't for $20 billion shortfall in the pension system, too. it sounds like they are starting to make some strides, but there is a long way to go on the story. scarlet: how urgent is the need for cash right now? tracy: the next pension payment is later this year. one of the things he might run into trouble with even getting that those property tax rises will go straight

towards the pensions. you will have some sort of really large tax increase and that is good to go to to your neighbor's pension fund. it really has the potential to have a lot of social applications and it as not passed yet. that is some thing to keep in mind. scarlet: that gets back to the root of the problem. the pensions. are they completely untouchable? under what circumstances can they be altered or revised? kate: i don't think there is a way you will be able to impair pensions, at least for that short term. congress sayte they cannot do that. that was actually the trigger super downgrading to the junk territory. i have been following detroit and other city bankruptcies. even in those cases, they weren't able to touch pensioners, even though in those cases they were legally allowed to. i don't think the precedent is there. i don't think illinois is willing to do it. i don't think that it will ever

be on the table. scarlet: a lot is riding on his property tax increase. chicago residents obviously not happy about this. what does it mean for a commercial property owner, landlord's? kate: i think this could impact the city's competitive advantage as a city. this is the third-largest city in the u.s.. it is appointed to remember that and they are competing with the other large cities, l.a., new york, for those you people to come in, for businesses to start growing there. if you are a company and you see some day like this on the horizon am a further obstacles in your way that could threaten your top line, you might think twice about expanding in that area. i think that could be a problem. scarlet: so residents will suffer. proposition -- emerson property owners would suffer. who would benefit? k: retirees. they will just get what they are owed. scarlet: other fees that rahm emanuel is considering or has already enacted? nickel and dime

a residence on streaming services and taxing uber. taxing uber and taxing netflix and privatizing the 311 service. scarlet: the call you make to the city? kate: exactly. just to show you how desperate they are for cash right now, that could save them about a million dollars. scarlet: and he is considering it. -- thatt mean that this bondholders are calling the shots? kate: it will be interesting to see how much influence they actually have. again, for them to really come out of this pension problem -- and again assuming that they cannot touch pensions -- they are going to need access to capital markets. you can only have access to capital markets if you are this distressed, if you have a very clear line of to medications with your investors. we are not going to default on this. you're safe. this is a good play for you.

and one step is doing towards that is mayor rahm emanuel will be doing his first official visit to new york city on monday. he will be talking to investors. he wants to make sure they know he is committed to this. remember, raising taxes is not a good thing if you are a politician. it always heard you in the end. thank you so much. we will have you back on monday to talk about rahm emanuel making his case. kate smith covers community bonds. coming up, what does the future of virtual reality look like? ♪

scarlet: those get a look at the markets as we approach the close of trading. julie, we are well off the lows of the day but it is still yet another down day. does it look like we can get into the green? julie: it doesn't look like we are going to get there. nonetheless, we are still going to finish lower if things keep in this direction. even though we did have may be some technical reasons for a bounce off the bottom, there are still some fundamental reasons that stocks are down. let's take a look at the worst performers in the s&p 500 to illustrate why. we have caterpillar that is still lower after cutting his forecast. a lot of their clients have been hit. and we still have this selloff in health care. it initiated a couple of days ago with a tweet from hillary clinton saying she was going to introduce a plan to cap prescription drug prices and then she detailed more about that plan in a speech that she

gave. selloff began in pharma and biotech and spread to some degree. we are seeing some of the hospital companies, some of the more traditional drugmakers down and not just limited to biotech. we do have a little bit of a push upward and i wanted to highlight those docs as well. mining is higher come along -- newmont mining, hire along with gold stocks. it looks like netflix is what are the companies that might be collaborating with facebook on some kind of streaming project. we have seen these shares rebound today. micron might benefit from a potential cap x cut over samsung. you would think that would be a negative. but what folks in the industry are looking for a rationalization, a stabilization of d ram pricing. scarlet: some visibility for investors. newport,are looking at

i could not help but look at the underlying commodities, gold, copper, oil, they are all higher today. julie: the dollar weakness is helping out these guys, especially because we still have these persistent concerns about global growth in the face of .3%. oil of one it is seen more of a haven. we have a number of central banks around the globe that cut rates. the taiwanese central-bank and the norwegian central-bank. given that, we have seen some reaction come as well as in the rates market. if we look at the dollar versus a basket of currencies, it is lower. the swiss franc, the 10 year yield is moving lower as well to 2.13%. as you know, we will be hearing from janet yellen at 5:00 p.m. she will be giving a speech. there will be special coverage

of that speech. investors are looking for direction here from the fed chair. scarlet: they are looking for any kind of guidance. she spoke last weekend she spoke for a while at that. thank you so much. let's get you some of our other top stories making headlines. is planning a $40 million renovation of the farmers sphere building an oakland. purchased ub --er purchased the building for an undisclosed amount. company is moving ahead on plans for a two-building campus in san francisco's mission bay. days are gaming differently than we once did. smart phones and tablet have taken over from home computers for game platforms. according to a report, 63% of this demographic are now gaming on mobile. they mobile market is now worth

an estimated $30 billion. netflix can tell you how long it took for you to become a binge watcher. the answer for most people is three episodes roughly. that is according to new statistics released after netflix crunched the data for more than two dozen showed's. -- two dozen shows. those are some of your top stories at this hour. teche going to stick with because over 1500 tech insiders are in los angeles for the atlas to. the company has now introduced a new device with samsung. emily chang's in san francisco and she is joined now by oculus's ceo. emily: brandon, thank you so much for joining us. headset samsung year

that you partnered on is getting so much buzz. $99. at the same time, it is not oculus ripped. why this product now when consumers are waiting for ripped? brendan: we wanted to get virtual reality out to as many people as possible. it will appeal to a new and different audiences, especially at $99 prayer -- paired with your smartphone. i think it is just a bigger audience. excited about the new partnership with samsung. emily: your former partnerships with netflix, fox, lions gate in terms of content, how do you share revenue on that content? do you get a cut of what netflix or hulu get? brendan: we announced a lot of

partnerships today with the game developers and entertainment and film studios and producers and services like netflix and hulu and ones that you mentioned. we just want to provide as much entertainment as possible on gear vr and on rift for users to enjoy. these partners are really excited about virtual reality and where this is all going to go. and they want to get in on the ground floor. want to get in now. emily: can you give us an idea of how the? brenda --hare works revenue share works? ndan: these are the early days and we are doing everything we can do to support them and they are doing everything they can do to support us. they are just doesn't is he a stick about where this is going to go as we are. emily: content is one thing.

exclusive content is another. how important is exclusive content to oculus, stuff you can only see when you use your headset? the content you have on these devices will certainly be who is going to come onto the platform and who is gone to buy the product. at oculus, we don't have that much is close of content. we have a lot of first party and second party content. there is a lot of content where we have fully funded the entire game. we consider that a first party approach, like microsoft and xbox would have halo. we have this whole suite of games that will only be on our platforms because we pay for the full development right from the beginning like a first party game. emily: i was speaking with the me heristiansen who told thinks virtual-reality will be mainstream as early as next year. this samsung ear headset seems like this could make that possible. will be you think vr

mainstream and how many headsets initially do you expect to sell? brendan: i think it depends on your definition of mainstream. we believe the mass market will have a lot of early adopters of vr. but if you are looking at the smartphone scale, at billions of users out there, that will take a long time. theaid today this is just beginning and, year-over-year, it will grow into something big. but it really is good to start small. everybody is getting and now because they are excited about the potential and grow over the next years, like smartphones did in the early years. it will take a while, but it will get very big in the future. facebook,ng part of what d.c. for the potential for social and interactive vr -- what do you see for the potential for social and interactive vr markets? brendan: mark announced yesterday, facebook announced

that they have 360 videos on news feed. that is just the first step to that is not full true virtual-reality. you can experience it in a vr headset. over time, we will go to new capture devices they capture to 3-d. so you can capture a moment in true 3-d, not an old photo or video, but fully immersive experience you can share with others. and they will feel like they're right there with you. so maybe it is your kid's birthday and i can share it with your family and they can feel like they are actually at the birthday party with you. and that is when to be very big. that is what i think scott and marketable face but team is so excited about. how many people will fork over a potentially hundreds of dollars more for rift. how will the experience be different? an: we look at both of

these as mass-market products. they will start small and the audience will build over time. but i think there is going to be a very strong enthusiast market on the oculus rift. there is hundreds of millions of players a pc video games. a lot of people say the pc is in decline. actually, the pc gaming market is growing year-over-year. it is getting bigger and bigger. there is this use super enthusiastic and pvr is going to vr is going to expand. and you will have it at a much lower price point, more accessible for some this for somewhat different audience that will also be super competitive -- compelling. emily: i know you have not given a launch date for rift right now. we are still expecting it to come out early next year. is that still the case? will we see it in the first quarter? what can you tell us about the cost? : the rift is on

schedule. the team is making a credible progress. we will be shipping in q1 of next year. the team is working really hard. we haven't announced the price yet. but what we did say is you can have a rift and a new pc -- because many people need new pcs -- there are certainly some pc and that have their own pc and just upgraded gaming card and have everything they need. but for a lot of new users, they will need the pc and the combined price will be acting hundred dollars or less. scale oure able to get bigger pcs if you want. but that is the option that we are excited about. that is not the headset alone. that is the headset and the pc. you scale up the product and think about what that looks like, what about the business model? do you see advertising within oculus? and what does that look like? an: we are not thinking

about advertising at all. we are thinking about advertising our own product out in the world to get more people to grab a rift or a gear vr. in-vrertising -- advertising is not something we are talking about right now. emily: really excited to see the samsung year that will beat -- sam some -- samsung gear that will be out for the holidays. scarlet: emily chang speaking with oculus ceo. they are holding the oculus connect conference right now. much more coming up. we will discuss the fallout of dw woes on the stock in the markets. ♪

scarlet: pope francis arriving

at andrews air force base. it is an american airlines plane from washington to new york. running a little bit behind schedule. a lot of people waiting at andrews air force base for him -- and toand to make take pictures of him and say goodbye for him. kerry also at andrews air force base and current vice president joe biden. we are also there because president xi jinping of china will be arriving at 5:00 p.m. so i a lot of traffic coming into and out of -- so a lot of traffic coming into and out of andrews or for space in washington, d.c. pope francis getting ready to get on an american airlines plane that a lot of people are calling shepherds plane. in the world of business, volkswagen stock, which is already under pressure this year, took a nosedive on monday and tuesday after the pa said the automaker cheated on emissions tests.

other automakers got caught up in the mess fairly or unfairly with shares of bmw tumbling. mike regan, editor at large, and lisa brought marriage -- lisa bromridge. pressure for caterpillar saying it will fire all these people, having problems finding stability in light of the mining problems. machinery sox owner ready -- mr. ernie stocks are at a two-year low. me is iat is amazing to think this issue with volkswagen is something that wouldn't necessarily rattled the market if it was doing well. obviously, it has been such a dense -- the whole market is on center folks these days. it doesn't take a black swan to rattle people.

pigeons in this case can shake people up. not just with the autos, but with the biotech stocks and the renewed focus on drug rices. something in the past would not have brought the whole market down but is really rattling people today. lisa: that is a great point. yes, ok, we are having a scandal. are they going to go out of business? are people not going to buy volkswagen cars next year or in two years because of this? this is an aerated company. havehave bonds that dropped in some cases over the weekend. scarlet: is remarkable. there are a lot of questions here. think is a much for joining me. much more coverage on bloomberg market day right after this. ♪

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

[closing bell ringing] u.s. stocks paring their losses, easing a global selloff in the goodies. is "what'd youon miss?" janet yellen is about to give a major speech on inflation. will she use this chance to better explain the feds inking on interest rates? scarlet: that sinking feeling. we look at the emerging markets must -- emerging-market mess. joe: and norway's central bank unexpectedly lowers interest rates. what this means about the health of the developed world. we begin with the markets. andegin to mount a comeback to not have the juice and are closing in the red once again. for sectors closed in the green -- six out of 10 groups still down