to the bill's lack of integration language during an eight hour speech. paul ryan today promised the issue would be addressed once the government is funded. >> i know there is a real commitment to solving the challenge in both parties. that is a commitment i share. to anyone who doubts my commitment, do not. we will bring a solution to the floor that the president will sign. >> he would not give specifics on any terms he thinks might be agreed to in any future immigration bill. nominatedtrump has charles reading to lead the internal revenue service. he would also have an even more sensitive job overseeing the presidents returns. he refused to release his tax

returns during the 2016 campaign. two former white house chief of staff say president trump's twitter have it has been distracting at best and destructive at worst. if you were there boss they would tell him to stop. calls mr. trump's tweets political gasoline. says theonough president's tweets have the ability to walk back a lot of hard-fought progress. benjamin netanyahu he is brushing aside accusations of wrongdoing. said it isia have likely to result in indictments. the prime minister insisted the probes will find nothing. global news 20 for hours a day in over 120 countries.

this is bloomberg. u.s. stocks are approaching their session lows. a higher than average trading volume. let's go now to julie for more. >> here are the major averages. they are trading at lows. the long-term average is around 19 and a half. still elevated levels here in the wake of the short volatility trade blowup. 2%see them all falling by and we are seeing it as a broad aced selloff. the action has not been favorable in a number of different ways. stocks continue to make attempts at gaining and then do not make it. several attempts to try

to rally, which have not been successful as stocks fall to the near lows of the session. and these selloffs keep falling. there were only four occasions in which the s&p fell. it has already happened four in not even a month and a half. there is also the question of volume. here is a vat. this morning when there was not , when theice action declines were not as steep, volume was running below the 20 day average. -- then justafter after 11:00 volatility took off

and now we are seeing volatility at 25% above the 20 day average. this is another sign that it is not necessarily -- it doesn't pre-stage selling. it could be the exhaustion that some investors have been looking for. finally, i am just going to refresh here, i want to get the latest numbers. there are only 39 stocks trading higher. drags, the biggest stocks that are both the heaviest weight as well as falling today, you have facebook, amazon, then you have the financials as well. jpmorgan the bank of america. that is where we are seeing laggards within financials. there are still some stocks rising even in this environment.

it is not brought as we have seen on prior occasions but only 39 stocks higher. >> great perspective. let's discuss this in further detail. we are trading at session lows here for the u.s. majors. us, is there any sign as far as you're concerned of exhaustion points, what we seeing across markets? >> not quite yet. when these big spasms of selling occur, there is this pattern that happens. you get a sharp rebound and then you test lows again. the market wants to see where the offers are. tuesdayaday low from will be an interesting level. if we break through that we are going to get nervous. i have seen it being called a flash crash which i think is true but there is a distinction

to be made about this crash compared to the 2010 crash. that exposed a lot of flaws in market structure. caused a lot of stocks to go to one penny. there are some flaws in the structure of the market that have somewhat been addressed since then. i'm not sure this had anything to do with market structure. someone was selling big. i don't think it is productive it is notingers but necessarily a flaw in the structure. program want to outlaw trading's that sell at certain times and pick up some volatility. was earlier there volatility. in ways that perhaps imbalances or may have exacerbated the selling. is that monday's news?

now we are onto something new? >> when you look at those exchange traded products, there's a great metaphor. they are like the visible tip of the iceberg. the norm is trade that exist that we can't necessarily see. part of ity are the that you can see. there was likely a lot of other that weand selling don't necessarily point a finger at directly. how long that takes to shake out, it could be part of what is going on now but you look at the market last week before the big freak out. volatilealitative -- to what we have seen going into that. you have this drop after the wage data was higher than expected. the mostople not just

sophisticated computer hedge fund traders, but regular people thinking about that all weekend. monday, who knows how many people made decisions that infected what we saw monday. scarlet: big selloffs tend to come on monday when people have time to reflect on what the data indicated. everyone keeps coming back to this idea the economy is fundamentally sound, it is not much different than it was a week ago. a week ago people were buying on the dips. where is the buying on the dips now? good story about that today -- fundamentals look great. all indicators of recession aren't there. that said, you have to second-guess that notion when you see this continued weakness. to get back to the short volatility trade, my knee-jerk reaction would be to say that has nothing to do with fundamentals.

once that clears out it will be record highs again. but there is probably a guy sitting here in 2007 saying what do mortgage bonds have to do with the stock market? i am reluctant to bring that bell. hasa: i fear of missing out turned into a fear of washing out. why would you buy on dips now if you could buy on a lower did ultimately at a better price? is anything that surprises you and what we are seeing? i'm talking asset prices in general, given the concerns people were voicing about the run-up in risk assets that we have seen in 2018 to start the year. >> the surprising thing to me and one of the more alarming things, this huge volatility has not caused a rush in treasuries. you saw these two auctions where people were not buying with both this like you would expect in

this environment. keeping rates higher in the which is what started this whole thing in the first place. with 21 minutes to go in trading we are looking at indexes after session lows. for the s&p 500 that is down 2.7%. julia: why? why are we not seeing people to buy treasuries? >> it is a great question. i wish i knew. you go back to the wage data and the idea the deficit is getting blown up at a time when central banks are stepping away. the tendency is to think rates are going to go up. julia: it is the wrong trying to be in. the dollar looks attractive. >> also not the best news for the stock market. 6 we shall see. coming up, monday's implosion

raising lots of questions about the other exchange rate of products that use derivatives. what is next? this is bloomberg. ♪

scarlet: the short volatility hangover may not be over yet. concerns raised that other problem children are lurking. before we get to other problem children, x iv is still trading as well even though credit suisse said it would wind it down. julia: this is the quark and how these things work. they will terminate and be liquidated. for now you can buy and sell

them. joe: anyone trying to catch the it bloodyare getting hands today. scarlet: what lurks beyond exide the? >> everybody starts to think about what else that could be problematic going forward. one of the obvious things is products that are derivative-based. 400 or so exchange traded products in the u.s. have derivative elements to them. they don't hold that much in assets. scarlet: but they don't need to. what's these are designed as trading tools. that is the whole problem with these things. retail investors buying them and trying to make a buck out of them. were juste people getting in and out but there was some form of retail

participation in this. how big is the retail exposure to this? >> it is incredibly difficult to estimate. israll the typical estimate 60% retail 40% professional in the u.s.. when you look at these particular products they are designed for more specialist investors. harder to buy? >> you can get a pop-out that will say here are more information about this products. are you sure you want to buy? they spell itf out but they try and educate investors they are taking a risk. you are free to buy that product. scarlet: i just wanted to point out that it is pretty high for an etp. 1.35% amid that is incredibly high for something like an exchange traded note. >> it reflects on is incredibly

complicated. it is not an s&p 500 fund. that is very straightforward. for an exchange traded note have to pay up for that. joe: i remember 2016, everyone freaking out about junk bond etf's. it is never made sense to put them in this liquid wrapper. it turned out to be fine. but from time to time you get these scares. is there any evidence any of these would have systemic affects or do people mostly think the investors in these funds my get blown to bits, but it doesn't seem like they had any real spillover? >> to mike's point, it is hard to tell what is going to have a systemic impact on a market. it was interesting looking at

how the stock's interplay with one another monday. stocks fell. there was a sense as volatility was rising that was pushing down on stocks. whether ecp is themselves are going to have a sustained impact is less certain. they are a small part of the volatility market. the derivative side is a small part of the exchange rate. >> there are small things but they do not act like any extreme market strategy. not even extreme like we saw monday. they don't behave the same way. .> you have to differentiate the two things operate very

differently. you have a credit obligation. there is an issuer behind it. you have all the usual terms and conditions. which is what we saw here. it is normally controlled by the funds. whylet: it would explain the short volatility etp is still around. now, i'm going to put you on the spot. in terms of complex products we knew it was complex. are there any other you can similarlyhat were complex that forced people to think of everything to make money or lose money? they are more complicated than a stock. you have to understand the holdings and understand how those holdings are held.

when you look at the exchange rate of product market, you have 400 products. that is not to say they are necessarily bad but you need to understand what happens. housewives operate. -- have to do your hard work homework. joe: could you make the argument everything has worked fine? it was going to do? suchone knew there is no thing as free money. they have not taken any hits. they were able to manage exposure. it seems like you make the argument this product did what it was supposed to do. >> it is the correct argument to make. buyer beware. that is what was talked about after the financial crisis. the risks were spelled out. if people don't read them you

have a real difficulty. that could be one way they look at it. they normally go for disclosure have the model and leave it up .o brokerages >> sophisticated investor comes to mind. >> after monday they may be nursing some wounds. scarlet: let's get your check of where the major indexes stand. you can see we are at session lows. 830 points. the best performing group is utilities. this is bloomberg. ♪

julia: we are less than 10 minutes away from the close of equity markets. abigail has the details. >> the selloff today we are seeing intensifying. the dow s&p and nasdaq down 3%. down 900 points, clearly on police for the worst day since monday. the volatility we saw last week with the major averages posting their worst week since the beginning of 2016. continuing this week into today, we have the declines on the uncertainty of what is next for investors. into january leading to this, the repricing of risk with rates rising. shock that the

complacency is gone but this has to mistreated the certainty that started higher. it made a little bit of a ,ecovery and now at the lowes the s&p 500 in a technically tight spot. the medium-term buyers out of do toward 30 -- 2300. i was mentioning repricing. very interesting here what we are looking at. 500 go up here? we have the 210 spread widening as rates have gone higher.

the inverse relationship here between the s&p 500 and the 210 spread. investors are not liking this. a repricing of risk weighing on the risk assets and stocks today with a big stock selloff. scarlet: we are going to stick with the charts. when we look at the very is .etrics, this is interesting the stock market may be in the middle of a selloff but when you get past this, it is about the economy. you want to look at the new york fed monthly recession indicator, the white line derived from the spread between three-month treasury builds and 10 year notes. the latest reading for february is at 4.2%, below the 20% threshold that is usually .rossed we are no near those levels.

according to andrew that shows there is a low risk of a recession and justify an optimistic view on stocks. adjusting to that but the recession risk is low. >> everything is fine. >> people are hating it is too good. across different indices, but we , at the top is the implied volatility of the nasdaq. normally the nasdaq is more volatile. nasdaq, there has been a major flip in recent days. s&p 500 has higher volatility. which suggests some of what is going on is about volatility products themselves. that is what people are trading.

focus on that. it could be part of the explanation of what is going on scarlet:. scarlet:the market close is next, we are at session lows. this is bloomberg. ♪

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leading 1000 points at the chatterley.am julia scarlet: i am scarlet fu. joe: and i'm joe weisenthal. scarlet: we begin with the market minute. u.s. stocks weekend and the dow is settling down. at least 1000 points off, so it is reminiscent of monday were stocks took a leg lower. had some interesting after-hours action lately, so we'll see what happens now. forget individual names, let's look at sectors. when you slice and dice to

sectors, everything is lower. at 1.4% loss of household products, which is the best performing products. of can look at it in terms 11 groups, the more traditional way of doing it, and united utilities, the best performers down 1.2%. financials and consumer discretionary at least losing 4%, so incredible moves there. momentum indexes lose towards the close or accelerated vix moving saw the higher, now up 26%. become accustomed of doing it because of this trigger within the perspective that at 80%,s it will close

35.the vix is approaching julia: and the worst week in more than two years -- over dollars.dred billion story crucial part of the is monday where we had the big downwardnd we saw moving in rates, and today very minimal. we have been lower and higher, but the equity portion of your of your portfolio got slammed. currency,'s look at the swiss, the yen, and as you can see, both of those gaining relative to the u.s. dollar.

sterling, we had the government bank of england saint u.k. interest rates may need to rise at a super rate. in some ways it is good news because they have upgraded forecasts and it is a repricing of u.k. yields. pulling sterling down later on in the session, and a quick check of currencies, how em is -- weming relative to will come back to this and show you some of the levels of commodities. joe: let's take a look at oil and gold. it was a couple of weeks ago people were bullish on oil, and finally oil is getting caught up in a lot of the industrial commodities in the overall volatility.

now it is showing up below bit more, and gold catching up a bit as it sometimes does there is a lot of volatility, up .4%. and that is today's market minute. we don't like to slap the correction work, but what we are seeing from markets we have officially had that for the 500 extending losses to her percent on the day, and 10% is january since january. joe: correction is good, right? scarlet: it is healthy. selloff, thisday is healthy, right, is what everyone was looking for? >> when you are on the dingdong highs, that means they want to go down and go back up to the highs again, and what you plan

to have when things are looking great is one you should probably execute when things go a little awry. then you see a big fat number. everyone says i wish i'd bought at october or november levels, but it gets harder when we are on the way down. of thosespeaking levels, this is a three-month chart of the s&p 500, and we go up, and in a span of nine days, we go back to levels of november. joe: the stair is up and escalator down? --re are the did people where are the dip people? >> maybe bitcoin? it is like a roller coaster, psychologically, you are supposed to be buying when

crying and selling when yelling, and they are starting to cry a little bit. you have the guts our wherewithal to pull the trigger? you probably should. julia: a lot of money is being but is the market close, there anything that surprises you about the moves we have seen? we saw a steep rally particularly in the beginning of this year to that see a ball back -- pull back. it is jarring. >> it is jarring but it shouldn't become too surprising. you can have volatility being one way, if you go up fast, you should expect to go down faster. julia: the government is saying this is small potatoes. small potatoes? >> i sign image on twitter of a guy with a massive photoshopped

potato. i think the signs are quite strong. qualcomm sport has rejected the revised proposal from bought and says the offer materially undervalues the company and that qualcomm is offered to see whether broadcom can address these deficiencies. the board of qualcomm has unanimously rejected the broadcom proposal saint it materially undervalues the materiallysaying it undervalues the company. one of the things getting a lot of attention, and people thought as encouraging, we haven't seen much spread from the equity selloff of other asset classes. we are starting

to see some of that, right? >> i think a little bit. futuresalysis today and is extended when compared to the last couple of years, and it is quite interesting word the currency positions have been hit, and the short volatility so then hit, commodity complex, oil, copper another one -- and that has gotten slammed. the one exception is the fixed income market. this large indebted short in the fixed income market, and with the exception of pain for a couple of hours in the beginning of the week, it has been pretty resilient.nth -- going up butrates the curve is deepening as they go up, and that is relatively rare.

in arates are going up tightening cycle, you expect the curve to flatten. risk: is this inherent -- withinicing pricing. here isbut the theory that when you have a secular increase in volatility, you try to hold onto the sacred cow. julia: and it isn't sacred anymore. gets lede sacred cow to the slaughterhouse -- and maybe we know that the bottom is in. even though most cherished positions gets closed and maybe one day we'll have a squeeze october of 2015.

is thatossible argument people are in levered long , like and the mechanism many other strategies, there is profile soion, short that these funds to maintain have to sell weakness into the close, which we have seen monday and today. leverage in various forms of shorthas some sort volatility component, and short volatility will amplify price rather than counter it. when it allof xiv goes boom, the correct answer is

when people sell out, out of these relatively toxic products. there are a small proportion of the etf universe, it is not the spy we are talking about. perhaps there is going to be an argument that regulators may have a look at these products sold to retail investors that have this embedded short volatility. is expected value of xiv you, but i would posit to that a number of owners got that far in the perspective. julia: in the meantime will keep asking questions. cameron, thank you for that. coming up, the weeks turbulence and stock is knocking central

banks offer policies, and white the bank of england resident says volatility isn't surprising and what it could mean for interest rates. this is bloomberg. ♪

mark: it is time for first world news. the proposedpaul spending package delivered a government shutdown, according to other senators say paul is holding out a vote for an amendment that will keep congress under strict watch it cap's. to 100 senators must agree hold a vote to occur today without consent the boat with the current at 1:00 a.m. in washington after the funding deadline.

secretary of state rex tillerson welcomed guatemala and jimmy morella's just hours after he met with president trump at the annual prayer breakfast. president endorsed the u.s. decision to move its embassy in israel to jerusalem and announced that guatemala would do the same. talksresident pence held in seoul, south korea and took the opportunity to highlight the visit of the north korean officials to the upcoming olympics, calling them the olympic games of peace. president moon spokesperson said it plans to meet with kim jong-un's sister and other north korean officials traveling to the south on friday for the winter olympics. over ag-un presided military parade today saying the event marks the emergence of

north korea as a global military power despite what he called the worst sanctions. he also warned his troops to maintain a high level of combat readiness against the united states and its allies. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. small potatoes, that is dudley characterized the market turbulence and his press conference this morning. the bank of england governor said he may have to raise rates faster than he thought. where are joined now by the head of td securities -- good to have you with us. there is a repressing going on in the united states saying we may have to raise rates and a

repressing going on as far as europe is concerned. areof these things connected, it is not just about the united states here, surely? you look at interest rate rises, this is the second time we have had global repricing, and the booms have kept up with treasuries. and iormally lag, actually think inflation is overplayed, you don't see them break even or dip. it wasn't a big deal because the boj was buying, but that is unwinding and the entire market is realizing that this decline is stepping away and we have to be ready. joe: are you surprised that in a day like today, the big macro fundamentals aside, where rates should go, we are not seeing a knee-jerk reaction to

treasuries? >> part of it is positioning and exotic products, but when you see qe going away, i think it is going to write and the straits will struggle to the client while equities come off, and what you are seeing is the curve is interesting. the curve is steepening, and that means thai baht equities, maybe the two-year look safe because the fed will rate hikes for or five times this year. the front and has found a ceiling, but the long and -- we could selloff a lot more. precrisis, we had a breakdown of correlations and didn't have this risk on and risk off, as it should be. >> we are living in this new normal, and i think the transition is difficult.

now, how do you carry? you buy long rates, and that can be difficult to create random price action. scarlet: we talked about this new normal, higher rates, higher volatility. can it look like the old normal that we have seen before the crisis? we are starting at a lower base, and there are still qe in the system and is not going away. there is a lot of research that maybe it is lower than it was precrisis, and i'm talking about a move away from the last eight years to another normal, and it probably isn't precrisis because like at productivity and demographics. we are not where we were in 2003 or 2004, and we have to worry about the cycle and if things

turn around and like a lot of money at the problem when we don't have a problem, there is going to be a lot of fiscal support your. julia: we had a tax overhaul in the united states and we are potentially going to see a budget proposal. it is going to add quite significantly to the deficit, and is this all a part of it? treasury auctions are going to be larger too. >> i think treasury made a wise the moving long rates will be a lot more. 200 your bonds, are we getting close to it? >> i think there is a lot of build on the front and. end. scarlet: is this something the ecb will respond to on march 8? >> i think that is the key

question, for the ecb growth is i stilld inflation think they are missing on the inflation magnet. on the some resurgence phillips curve, the are going to look at the u.s. and say after a couple of years you get inflation, and the euro hasn't continue to strengthen. we think there will be -- the pending market wise on march 8, i think he will push back to much of a pricing on hikes, but i think for bankers all around, keep it a little normalcy coming back to the market. you say you are skeptical of the booming inflation story and don't think it is quite compelling. differentro backdrop or a few data points here combined with the narrative of central banks not easing anymore spooking people? how different is it right now versus a year ago? >> i think inflation changed the

with the fednt making a policy mistake six months ago, practically a lot of people i spoke to set this was a policy mistake and they should never be hiking to now that they are behind the curve. when you get fundamentals of inflation, we have a gradual pickup. i wouldn't take this 2.9 average -- think where going to 3.1 there is automation, but i hate to say, it is the amazon affect. there are demographics you can argue that we keep inflation from taking off or making the fed hike much faster. leda: fixed income credit to the rest of the market in assessing of what is going on and repricing it. when youtill going on talk to fixed income clients and what we're seeing in equities and vice versa?

>> i think there is a lack of understanding on both sides because fixed income investors will say we knew that qe is going to and since mid-december. scarlet: this is not new. >> i think for a long time, it was just a repricing when we went to three hikes this year, and other markets is saying the login has the selloff, and that is hurting equities. julia: a fletcher curve or orented -- a flatter inverted curve, can we still see it? >> to me, and i was in the flat in her two weeks ago -- flatten growth, and ic think the hiking cycle can last two years, so the curve should not be this flat, it is a function of how far you are from the end of the cycle. scarlet: fantastic perspective,

thank you. we have breaking news, we have nvidia reported its fourth-quarter results and we are looking at the adjusted eps beating the highest estimates. analysts were looking at a dollar 29, and revenue, 2.9 billion, and the consensus estimates were less, and nvidia's role as one of the chips that power mining for bitcoin and cryptocurrencies. joe: there is this incredible shortage and demand for these types of chips in the crypt, and also gaming. they are crushing it. scarlet: first quarter numbers will be $2.9 billion come at the consensus estimate was 2.4 4 billion. much better outlook than expected.

julia: another impending shutdown in washington, the senate has managed to get a bipartisan budget deal, and now they have to pass it. national legal reporter joins us now from capitol hill. that there was going to be a several hours ago, what is the holdup, what is going on? was initially the plan to hold a vote to the senate and senate to the house and hopefully get it through and get to the president desk before midnight when the government would run out of money, but there has been able to. senator rand paul of kentucky has demanded a vote of preserving spending caps and essentially allowing senators have a say on whether those should be preserved at the existing level rather than increased. the nondefense increases will be 131 billion over the next two

years, military spending increases will be 165 billion for the next two years, so they are still working out a time agreement and what senator rand paul can get in order to placate his concerns. the senate is an interesting body were a single member can hold a vote for a long time. or similarand paul characters do this, do they roll their eyes, what are their reaction to this? >> that is pretty much their reaction to this. to yield a point where senator paul can get a vote on something he wants and this is certainly going to be a showboat where senators can cast a protest and say we don't want to raise military or domestic spending, the budget deal is almost certain to pass in the senate. we are than eight hours from a shutdown and it is yet the past either chamber and it could be a bizarre situation and we have a shutdown because we ran out of

time even though there is a deal on the table. scarlet: so the clock had run out, what happens then? can they get the government reopened? >> they can retroactively do it late into the night or early morning tomorrow, they could retroactively authorize pay and make sure none of the government functions and up having to be docked pay and other staffers have to be docked pay. there is no government funding and certain nonessential employees need to be on furlough. julia: this is going to be a long night. thank you for that. the market closed 30 minutes ago, and guess what, they closed at session lows. is can see right here, there a rapid acceleration of losses into the close in the last 30 minutes. this is bloomberg.

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retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

mark: i am mark crumpton with first world news. the senate has begun voting on a budget deal worked out between mitch mcconnell minority leader chuck schumer. the deals stake in the house is uncertain, and nancy pelosi sent a dear colleague letter writing she will not vote for the bipartisan spending deal because it doesn't come with the promise to address the flight -- plight of dreamers. investments of priorities that will create jobs and spur growth, plus he spoke for more than eight hours yesterday in opposition to the deal noted in her letter that although democrats are in the

minority, house democrats have a voice here and we must be heard. the white house is facing questions of how much senior aides knew about rob porter's history of abuse. john kelly said he was only aware of the claims yesterday, and porter officially resigned and cleaned out his desk today. them, itunderstand involves incidents on before he joined the white house, therefore they are best evaluated in the background check process. it is important to remember that rob porter has denied these allegations and and so publicly. porter received no special treatment and added that it is fair to say we could have done better in dealing with the situation. the wife of a conductor killed in a south carolina train crash says to rail companies are to

blame for her husband's death. the widow has filed a lawsuit accusing the company's of negligence. the engineer was killed yesterday when the passenger train collided with a parked freight train, more than 100 passengers were injured. the widow scs sex was negligent waslocking a manual -- csx responsible. anti-militant operations today aimed at this lodging insurgent cells, some of which are believed to be remnants of the islamic state. major operations against extremist and at last year but the iraqi government said the threat from militants remain serious. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet: let's start back into

the selloff today, joining us is kevin coronel. seenhree deadlines we have so far this week, the indexes have lost steam into the close and the losses have accelerated as we head to the 4:00 p.m. closing bell, whitey think that is? i think traders are positioning themselves and that a halfake too much of hour or hour of trading. you have gone down more than 10% from the market highs, but, if you look back over the last 30 years, we've had more than two dozen declines of more than 10% in the last 30 years, so you have to take a longer-term perspective on this. julia: we have a lot of people calling this a healthy correction. are you one of those who agrees with that? i don't know what the work

healthy means, it is what it is. markets had a strong move globally last year and valuations and most people's opinions got rich, and at the same time volatility in 2017 was the lowest in decades, so those two things are not usually sustainable, and to have a spring up of volatility in seeing an increase is not something that is unusual. joe: bottom line here, how much more do think this could go or do you think we have had this wash out of the system? >> it is hard to tell. what we are for is what happened to the fundamentals in the next several days and weeks? if you don't have a change in underlying fundamentals, if there is a a systemic issue that affects behavior, then this is a buying opportunity. we are looking for things to buy, prices are better so our

expected returns are better in investments were looking at and we will follow the fundamentals. infects business psychology and consumer psychology, and this is a buying opportunity. julia: you are looking for things to buy, i you bind here, kevin? >> we are preparing a list of things to buy, and is the first time in a couple of months we have seen prices reflecting better looking returns. as soon as they settle out as we get a better assessment as things clear out, we will position on the long side. i will also say yes to be careful on the short side because when you have spikes in volatility, you can also wake up and find that the dow is up 500 points or down 500 points. --rlet: define settle out are you looking for a 20% bear market? in such aets worse,

way that perhaps it goes on for a wild and begins to change leadsor -- it eventually to recession and that would be something that would have longer-term implication and we have to be mindful of that because it would the great earnings and fundamentals. if that doesn't happen and that process doesn't take place, then this would be a buying opportunity. it is just a matter of finding an entry point where things begin to settle out and we get a sense that this is not becoming a cascading thing. it is not going to be affecting psychology -- if we got there, and we clearly have a better entry point for things to buy, and that can happen in days or a couple of weeks. joe: you say you have your buy list ready, where are the parts of the market that you think may be getting too extreme, two

dislocated, and thus presenting opportunities? >> we've seen a long. where -- this is an odd year ortion -- the last two has been a risk on markets, so there are a lot of places, companies increasing evidence, consumer companies, health care companies, companies with good balance sheet. --t is where you get participate in an upturn, and those happen groups that have lacked over the last year or two. to get back to the potential of a cascading market, on broader selloff. see whether it is the fundamentals are valuations that would suggest a reason for a cascading of the markets, or is the correction giving a melt up and somewhat

justified here, as he said, as an opportunity to get involved? >> let me clarify what i mean. i don't mean a cascading market, but a cascade of impulse. a temporary risk off impulse buy investors. if it stops here, it can be correction.s a but if it were to continue and show next month as a weaker employment report or if earnings begin to get cut substantially or consumer demand falls off -- if there is a problem with investment, that is the kind of cascade i am talking about. unless you and the in that negative feedback group, and it could be a shark and quick correction that ultimately gives way to a bull market. thank you son,

much for joining us. julia: the spotlight returning to the chinese yuan. this is bloomberg. ♪

a weaker finish for the u.s. majors and united states, we have the dow jones off more than 4% at the close. 3.75 for the s&p 500 as you can see there, and the nasdaq also losing just shy of 4%. get a perspective on the market, joining us is global head of emerging marketing strategies, weston, great to have you with us.

talk about the emerging markets more probably, but what you make of the markets overall at this stage? >> i think most in the markets don't think everything was clear after the price action this week, we are for the other shoe to drop. i think there is more weakness ahead. joe: what are you nervous about? >> my view is the market overestimated markets all year, and there was a hike one or three times, too next year, to the year after, and the switch is not there yet. julia: talking about global shift, and we had the u.k. repricing, and it is a just about the united states, and where has been underestimated. that said, i think we are having an overreaction because the ecb will not be hiking until

2019, but you are correct we are in a section point of crazy market moves. scarlet: bill dudley called it small potatoes. people are going to be thing attention to what mario and -- the federal bank officials responded this and address this, talk about it, bring it up in any way? if people are this nervous about central banks moving faster than they realized, then we are going to be looking at trying to read the tea leaves on everything. officials seen looking wednesday and say we are aware of the market moves and keeping an eye on it. we are steve mnuchin also saying, where verbal support, and that this point this is all we need. fed officials are saying we need a deeper correction. it is not to

destabilize, we are not there yet. it is sort of a correction, and see soothing words, but no policy action is needed at this point. julia: what you're saying about inflection points, for emergent markets in particular, this is the critical thing. >> it is, i have been in emerging markets for decades, and it is tightening and stressful for emerging markets. whileates are going up brazil might not look attractive. on deafit is falling ears that emerging markets are continuing to rally in the last several quarters and now, and has potential, it has the attention of all investors. inia: the fundamentals emerging markets are stronger now and can compete with the u.s. cycle -- you disagree? >> they can cope with it but it

doesn't mean assets are overpriced. some of these currencies and stocks and bonds are overvalued, and that is the one thing about zero interest policy. corporate's, we are repricing assets, so emerging markets will survive. we probably want have a huge blowup, but some turmoil or dislocation or repricing. joe: emerging markets are not sensitive the u.s. monetary policy the weight they have been years ago when they had debt and rising rates hurt them, but when there is a risk off environment, they become essentially these high data assets. assets the most liquid are liquid compared to the treasury market, so as get smaller and smaller -- joe: funny how that works. history repeats

itself, and we are seeing things over and over. i do want to stress that emerging markets are in general stronger than we were in the past. see hugehink we will blowouts, we are having problems in venezuela, but we are a solid territory and can write this out. julia: you called it healthy. scarlet: you look at what is going on with the selloff, the dollar weakening consistently, i would imagine that some of the officials and policymakers in emerging markets were getting uncomfortable with their currencies that the need to the extent with the dollar falling. we saw china currency we can overnight, is this weakening something will see play out that there is going to be a ripple effect with other countries letting their currencies we can in the days and weeks to come? >> i do think so, and as you intimated, it is welcome. there have been multi-they can

highs against the dollar, and there's nervousness from korea, taiwan, the usual suspects. that otherricing markets aren't dislocated. malaysia doesn't start packing, i think they are ok with currency weakness, but it is a big if. you may have jobs on the other side saying, fundamentals are strong, don't panic, from emerging markets. with steve mnuchin talk about the u.s. dollar, job owning, getting a blow nervous if you look at the strength of the chinese yuan, it is that two years highs -- headlines, good julia: is it justified? joe: chinese equities have been doing well for a long time in

the precrisis regime, but they weren't linked to the rest of the world. now it feels like we are seeing more linkages and there are getting clobbered. what is going on in the chinese markets? more of the global economy take small steps, but one of the products -- byproducts is that it becomes one big business cycle. howsed to talk about emerging markets were a hedge, and now everything is moving together, and as you pointed out, it is a high data play. more correlated. >> it is getting tougher to find hedges where you can hide or protect. scarlet: what are you looking at, what asset class or geography to look at? >> in this environment when

where having repricing, no one is safe. equities my fall, very highly correlated, and with u.s. rates going up, that will hurt emerging-market bonds and people start filling them -- fleeing them. you have to pick your spots. my feeling is that the last several months is that asia should outperform. china is still pretty good, nothing to be worried about, but problem countries like turkey, south africa, it is a matter of looking for divergence in the em and try to find currencies that will outperform in a bear market. julia: like asia, eastern europe, concerns about south africa and turkey. scarlet: win, thanks. nvidia scoring, we have more on that next. nvidia shares up by 11 and a half percent.

this is bloomberg. ♪

scarlet: nvidia reporting eps that beat estimates in the last quarter, and this order projected sales that top the consensus estimates. discuss, nvidia graphic chips have benefited from the boom in the man's for cryptocurrencies, and the video gaming market as well and data center owners requiring their chips.

which part of business is driving revenue growth for nvidia? companies that have $10 billion in sales in the chip industry aren't supposed to grow 40%, and these are one of the exceptions here. one of the funny things about nvidia is they have their fingers and a lot of growing the favorite of spots to be in semiconductors, it is in a data center and in a specific part of the data center which the cloud vendors are adopting en masse. gaming, which is expanding rapidly in the world over, particularly pc gaming. if you look across all of these verticals, it is well-positioned in all three verticals, the markets are profitable, and that is by far the leader in the sectors. chip sector there is

anxiety about margin pressure and companies coming in and doing the same thing that other companies do, except cheaper. what does a company like nvidia have, what is its secret sauce that keeps it in the lead in some of these areas without bigger behemoths like intel squeezing them? >> that is a fantastic question. the interesting part is the underlying technology that nvidia makes, which is graphics gaming, autos,ss and data centers, and ai -- it is fundamentally the same. these markets are evolving to the point where the technology that was once particularly applicable to graphics processing is being used to parallel processing technology, and no been used in ai and autos. from a computing perspective it is all in in one specific kind of technology and is far ahead of intel and amd.

great question, intel is resourceful, but from a technology perspective, and to 24 is probably 18 months ahead of amd and intel. know the gaming community, they are also into exciting,ink they are but it hasn't caught this in spark that nvidia has an shares have been ok, why haven't they been able to write this wave? >> it is interesting because all prospects fors completely different reasons -- if you look at amd, it is well-positioned in traditional cpu share for servers where it has a potential from intel, and that is because intel is 100% share. even if you move the needle a

little, it adds value for sales and margin perspectives. nvidia,ook at well-placed and all growth markets with advanced technology, and if you look at intel, obviously did are the market share leader in multiple markets and are trying to diversify into a adjacent markets. into iot, and autos, but again, the needle is going to move far slower for them, and they had a great quarter, and that is because the market is expanding. all three of these companies are well-positioned. julia: great to chat with you and thank you for joining us. joe: coming up, what you need to know for tomorrow. this is bloomberg. ♪

scarlet: u.s. stocks tumble in

the close for the third time this week. julia: now in a correction. that is all for "what'd you miss?" joe:

♪ >> it is a correction. the nerves are back in the market. the s&p closing below its record from january 26. wall street reels as the dow falls more than 40%. the s&p at its lowest since the middle of november. the volatility index is more than doubled. 10 year treasuries really -- retreating. and oil falls to its lowest of the year driven