[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, led by health care and

industrials. the outlook for inflation among investors is headed for the lowest since 2009. just another ugly day. we could not get act to but it was better than it could have it. one stock i was watching was the m w. a report early in the morning from a german newspaper that they might have some innovations issues of their own and the stock initially got them. late in the day, there was a clarification from the newspaper and it said we really don't have any indication that there were issues. it was right around the same time as u.s. equities staging their comeback, so there have -- there may have been an indication that these issues are still driving the market. thing -- scarlet: we are

keeping an eye on the francis. he is heading up to his american joint baseane at andrews. he's broke with secretary of state john kerry, who is about to greet the chinese president .n the next hour joe: new york is getting the yuan general assembly and the pope. i want to dive into my terminal back to the markets. this morning, the big news was caterpillar, the big maker of minor -- mining and construction equipment said things are worse than expected. ine's a chart that shows yellow caterpillar shares and in white, the emerging markets for the last 10 years. stuff driving the china

slowdown and commodities -- it is very well levered. it's hard to imagine caterpillar is going to come back until we see an emerging market. expand on want to that and look at the background for janet yellen's speech about an hour from now. equity investors did not take much comfort from the fed decision last week to stand pat. this index includes developed and emerging markets. it has not gained since the announcement last earth day. we got a little bit of a pop and then finished unchanged. since then, it has been down, down, down, down. the index has fallen for five straight days. there is the remarkable thing -- you don't want to extrapolate a few days of market action because it could be noise but when you get a red move considered dovish and he don't

get a pop and assets, that's a remarkable result. chairt: as we mentioned, janet yellen will be speaking in just under an hour. a study shows the federal reserve is putting markets more central to policy. since 2000 five, they report shows a jump in mentions of financial markets in central bank meetings. the fed said financial development threatened to impede growth and inflation. joe: joining us to discuss that is peter fisher from blackrock. thank you for joining us. what do you make of the market action since that? peter: the important thing the fed said was what they are likely to do in the future but unfortunately it was murky. rightlyllen has been trying to get us focused on the expected path of interest rates, but she has backed yourself into a corner where what matters most is when they start.

i think they have gotten a bit tangled in their own medications strategy. scarlet: is the fed to sensitive to swings in commodities and currency prices? peter: monetary policy matters. interest rates are a big influence on asset prices but they run the risk of making it look like they are fine-tuning things with respect to markets, so that is another whole she may be stuck in. joe: what about the market expectations of inflation? janet yellen cited them but in the san francisco fed said market expectations don't have any predictive power at all. should the fed be looking at breakeven's? they: that's one thing look at. they don't have an impact because they are all much the same. we all get our impulse on the same place. one of the problems with what the fed did last week's they

announced they were all lower -- they were lowering their expected path of gdp and expected path of the funds rate, but their forecast of inflation stayed the same. that is not credible. you'd think of growth is weaker and they are not raising rates, the idea that they are going to get to their magic inflation target is not credible. joe: do they just throughout all these dots and forecasts? throw i think they should them out. what we should listen for his whether she really believes they are going to get to that 2% inflation number and whether she believes that can happen without a pickup in demand. the fed must be expecting that because productivity is weakening, we are going to narrow the out put gap and inflation is going to normalize. scarlet: and there is one of their famous. charts. peter: japan kept expecting that -- a week demand and narrowing

output to give them an inflation, but it never came. as what we have to listen to to see if that is what she expecting -- what she is expecting. they have surprised with rate announcements, but this federal reserve doesn't want to seem to surprise -- doesn't want to seem to want to surprise investors. peter: they are telling us they're having an argument over timing but they're having a much more fundamental debate. those who think raising rates is the right thing to do inc. so because they think zero has not been working. those who want to maintain zero think that zero is the only thing that's working. but that came out and other way. in a statement, they have been saying the outlook for the economy and labor market is nearly balanced on meeting as soon as a gets balance, we will normalize rates, and take off the emergency stands. at a press conference, she said

in addition to repeating that, she said something quite different -- the economy is so finally -- so finally balanced finely balanced. joe: bill gross said zero businessexisting models like life insurance, balance sheet and pension funds. we should use the proceeds to pay for and if it's for an aging boomer society. he thinks we have to it off zero. is there value inherently in getting off zero? peter: yes, i do. i think it has been a mistake. the fed has adopted the view that if we could just get interest rates as low as possible, that would get credit in the economy and pick up demand. unfortunately, a compressed term rhenium suppresses the supply of -- compressed term premium suppresses the supply.

the termsve to have to land and with their qe purchases at the long and it is zero rate policy, they are suppressing the incentive to lend. moreet: are they creating detroit and puerto rico's that cannot create -- that cannot meet their obligations? peter: i completely agree on that. night?at keeps you up at peter: this fear that productivity is grinding lower. the forecasts leaked from the fed had a gloomy outlook for the economy going forward, particularly for productivity. if that is really our outlook, we are in for some really week growth. joe: thanks to peter fisher. scarlet: don't miss our life yellen atrom janet 5:00 eastern time. i can wait. coming up, and unintended consequence of the volkswagen

scandal. what already beleaguered precious metal they be taking a hit due to that whole mess chart -- two to that whole mess? ♪

scarlet: i'm scarlet fu. joe: i'm joe weisenthal. "what'd you miss?" trading at a six-month low. scandal dogging volkswagen is undermining diesel popularity. scarlet: have you ever driven a diesel? joe: i don't think i have. volkswagenonce had a rabbit that was a diesel and it wrote down and it was like a diesel truck driving through the

neighborhood. it was a historic morning on capitol hill as pope francis became the first pontiff to address congress. the pope urged lawmakers to welcome immigrants as humans and islamicf fighting about extremism. in sauditragedy today arabia where more than 700 people died in a stampede. it happened during the annual pilgrimage. saudi arabia puts the death toll at 717 and says more than 860 others are injured. it is the deadliest since 1991 more than 1400 died. in seattle, nine people are dead and two people are hurt after a collision between a charter bus and an amphibious tour vehicle. the insidious military style vehicle is operated by a company known for exuberant drivers with tour guide to play loud music as they take tourists around the city. pace slumped to a

record low and brazil's reality collapses further. can these emerging markets turn their currencies around? when is the bottom? bob: what we might have missed during the day is a major reversal in the zillion currency. -- the brazilian currency. scarlet: come inside my terminal and youcan see the real can see the turnaround with the dollar weakening against the brazilian currency. guest: the dollar traded to a new high today and now it is closing below yesterday's low. that's a classic reversal signal. it comes off a very extreme, overbought situation for the

dollar. you have the dollar reaching an extreme overbought situation versus the real and we have had a key reversal off the absolute record high of the move. this could signal we are getting a bit of a reversal. if we stay at these levels, you could see some significant short covering over the next couple of days. i'm not sure it is related to the intervention. it may just be an exhaustion of the move. interesting that it could be a major reversal day in the short run. joe: what do you make of the fact that we had this dovish fed last weekend you would expect that would be u.s. dollar negative, but they've got no lift from that. bob: if you look at the longer-term part of the treasury market, while they have rallied some, they have not rallied all the way back.

some of the commentary in the last couple of days has suggested that maybe it is december where people might be thinking it is early next year. there were fundamental economic problems. the economic rate in brazil is up about a percentage points just in the first eight months of the year. they have significant economic problems. joe: a right there of the unemployment rate. it's at the highest level in years. scarlet: nike has reported earnings and it's a need on the bottom line and top line. $1.34 versus the estimated $1.19. the -- higherthan than expected. nike says global future orders, effect --k out the fx greater china orders, when you back out the effect of foreign

versus the up 20% expected 15.8%. joe: doesn't sound like a beleaguered mulkey -- beleaguered multinational. to talk about other currencies people are pointing to -- the mexican peso. do you see anything interesting there? bob: it was at a record low this morning and has not completed the same reversals the brazilian currency has. it is not as oversold as the brazilian currency but the mexican peso has been a much more gradual move. the big thing for me is to see how much the peso has gone down versus china. those are two destinations for manufacturing and i have to believe over the next couple of years, we will see u.s. producers looking a lot less at china as a source of reduction and moving facilities into

mexico into the north american region. scarlet: hong kong is feeling the effect as well. hong kong exports taking a hit. are we passed the danger zone for hong kong's currency take? the stability or some stability has returned. kongpeople thought hong might let its currency go when dollar china went through the same level as the hong kong currency. they did not do it and i think they have heard that so long and and seerency peg's go the devastating impact it has had. i think they are just going to hold the pagan hong kong and get to the process. and investors believe them and they have been through such turmoil that i would be surprised if they let it go. you looking for

anything in particular from janet yellen coming at 5:00? bob: our chief economist is not expecting her to say a lot. this is an academic oriented speech and i think she had a lot of people making comments in the last five or six days, it's starting to send the message that december might be in play, so i doubt she wants to jump on that and create volatility at 5:00 in the afternoon. scarlet: she is not known for too many surprises. discuss thek as we developing markets. joe: and whatnot is delivering booming business for a country andfrican what do lactose intolerant americans have to do with it? ♪

scarlet: i'm scarlet fu.

joe: i'm joe weisenthal. "what'd you miss?" scarlet: we asked how lactose intolerance americans are fueling demand for a net from africa. hugecashews -- there is demand for the net from the ivory coast. it's now the second most valuable crop after chocolate. scarlet: and apparently, cashews are not native to the ivory coast. and it paid off. bob finche.with i want to start with happened with norway and taiwan. a developed market and the norwegian central bank unexpectedly cut interest rates. why did most economists not see the cut coming? oil has been ade

big drag on the currency but the , most people were not looking for a rate cut. at that chartlook and see the norwegian currency had fallen against the level that might be implied. to do with that is the neighborhood that they are living. they are against an ecb with interest rates and a swedish bank with really negative interest rates. there was a large enough differential that they felt they could eliminate it. manufacturing sector i norway is suffering and i think that will turn around, but it has not had time to develop yet. it may have been a bit of overkill, but given how the rates are in neighboring countries, it might do. i want to go to germany

because we have been talking about books wagon. we got the latest climate survey and i don't think this captured in the of the bolts wagon news but the is this climate is strong. what do you make of this? bob: i think we see a significant shift out of growth dynamics out of asia and into europe. has endedrn in europe and it looks like the euro zone gdp is growing at about 1.5% and that is probably above potential for them. are seeing benefits on the growth side in europe and i think that will partially offset some of the slowdown we are seeing in asia. if you aggregate the euro zone economy, they are almost as large as the united states. we are picking up a little growth on the european side.

scarlet: you mentioned an improvement in french you factoring. does that hinge on a weaker euro? bob: improvement and french manufacturing are not often words we hear together. the manufacturing pmi has been above 50 42 out of the last of an teen months. it's not great, but manufacturing confidence picked up and i think that's a combination of the weaker euro and better demand growth in the eurozone. joe: we have to talk about the gap between beef prices and chicken prices. what do you make of that? bob: unfortunately, we are finishing barbecue season. economists talk about long cycle and beef is a long cycle. it takes a long time to develop .eard him a bring it to market when grain prices went up sharply in 2007, there is a big

move to market which cap prices down and then a dearth of supply. we have seen grain prices come down and herds are increasing. are beginningwe to see a turn in beef prices and they could go lower. joe: fantastic stuff. thank you for coming out. scarlet: we will be right back. ♪

scarlet: i'm scarlet fu. joe: i'm joe weisenthal. "what'd you miss?" hat did you miss -- scarlet: don't miss our coverage of janet yellen's speech on inflation and monetary policy. joe and i will bring that to you in just 30 minutes.

janet yellen at the only fed official speaking -- james bullard will be speaking at 9:15 tomorrow followed by esther george of the kansas city fed. both are nonvoting members. ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...)

man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. posts aresident obama private dinner for chinese president xi jinping tonight. first course on the menu -- cyber security. i'm emily chang and this is "bloomberg west." watson is moving west -- ibm is betting big on the artificial intelligence that one jeopardy. -- awatch out apple circular smart watch just announced that is thin and sleek. and you won't want to miss my