jeff currie is the global head of commodities research at goldman sachs. d by our own kate kelly down at the new york stock exchange. jeff, gooed to have you on the program again. kate, why don't you start us off. >> jeff, great to have you here. you've been talking in your research about the sort of negative feedback loop that's occurring in commodities right now where we have a vicious cycle recurring low prices. >> can you explain a little what's going on? >> i think it's good to take a step back before you talk about the negative feedback loop and talk about the three ds of macro, deflation, divergence in currencies and deleveraging of debt. i want to emphasize these three themes are a decade in the making. nolg something that's going to unwind over the next three to six months, they'll take a year or so to play out. let's go over why they're a decade in the making. deflation, excess commodity production capacity all over the world. productivity gains through a decade of a commodity boom. so it's response and investment to the higher prices. second one,

jeff curry spoke on bloomberg television earlier this morning.eams.ajor the deflationary impact of lower commodity prices and the excess production. the second one is divergence. stronger u.s. growth against the rest of the world. create a stronger dollar, weaker commodity currency. the third is deleveraging. that's what's going on in china. nats of -- massive debt buildup. all point to lower commodity prices. scarlet: i need to bring in alix steel. you've been following jeff curry's research for a while now. what does he mean by new world order? ix: what he was saying was we have a stronger dollar and lower local currencies. the input cost in those countries actually falls and becomes a lot cheaper to produce commodities. a copper mine in chile are more productive so there is more supply on the market. adding to the glut. you have the deleveraging when it comes to china when they are taking the man off the table. force is what he winds up talking about. scarlet: when he talks about new oil order, the shell revolution shalell revolution -- revolu

plus commodities crush, we talk to goldman sachs's head of commodities research, jeff currie on whether here to stay. or whether oil is bottoming and one the barron's top ten financial advisers tells us where he's putting some of his billions to work. see new about 15 or so. >> let's get to the cme group, rick santelli with the santelli exchange. busy afternoon ahead, rick. >> it's going to be a fascinating afternoon and there is no press conference today. however, if there was a press conference today, i have a feeling there would be questions about china. there would be questions about the global economy. now i don't know the answer to these questions. and what they most likely will be regarding would be how much credibility, attention do we need to pay to the current issues and glide path of the chinese economy as it affects the global economy. >> as all of that affects the u.s. economy. you could be all about the u.s., we don't elect people in government to directly toss all the issues in the united nations. but of course we need to be part of that same type of dynamic. but one thin

jeff curry is on this wednesday. we'll hear from him. >> perfect timing because we may be very close to $43. again, those are levels that are problematic in the high-yield market for a lot of these companies. >> coming up, health care heats one a mega merger today. big pharma earnings on deck. legendary health care investor with his take on where the next deal will be and how he's putting $15 billion to work right now. plus, our call of the day, barron says one old tech giant could rally 50% over the next few years. will tell you the stock and -- it will tell you the stock and if our experts are equally as bullish next. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find m

here's jeff curry. >> i think that the downside risk are substantial.ke to point out there has been real no pain in this industry. we have to actually see some distress start to occur. we calculate that $40 a barrel for six months starts to create real default risk in the high yield markets. if we think pain is needed to get restructuring in the industry we have to see prices down in the lower 40s to really create that type of restructuring needed. >> we're not down in the 40s, but he thinks he can get to 45. but to the question of high yield what's your view? >> with regard to high yield, it's a much different story than it is with the big integrated companies. when you look at an exxon and a chevron, you're right. buy them now or later cheaper. both of them have cash flow break even statistics that require oil to be 50 and $60 a barrel. that's not likely. when you look at the high yield sector energy is part of the high yield index. it's 14 or 15% and in some it's higher and it's compromised to a large degree by the smaller e & p that have been operat

we are hearing from jeff curry who says he expects gold to paul $1000 -- to fall below $1000 an ouncebearish sentiment on gold at present. doesn't seem like there will be any change. betty: thank you so much. now, a look at the top stories on the terminal this afternoon. hbo simmons headed to according to the new york times. hbo will be the exclusive tv home for simmons. his contract begins in october. a talk show will debut in 2016. he is among several high-profile departures from espn. developers proved they could remotely seize control of a moving car. the hackers demonstrated their software -- they were able to disable the accelerator and ,reaks and tune in the radio even though they were on a couch 10 miles away. a bill just introduced in congress aims to keep internet connected cars from getting hacked. some breaking news as walmart will start closing some of its 24 hour supercenters for a few hours each night. across ourt coming terminals. walmart is ending their overnight hours at some of their stores as part of a revamp of the company. that is a look at some of the top storie

jeff curry over at goldman sachs the head of commodities research says we could see a drop below $1000he first time since 2009 and he is not alone. a lot of bearish sentiment right now. if you look at my terminal, holdings in gold backed exchange traded product down for a fourth straight day. you can see the decline here and we have seen them fall almost every quarter since their peak back in december 2012. i mean, just incredible to me, day after day the same story we are telling with regard to this terrible sentiment on gold. matt: it is a trend, right? it is over $1000 an ounce, let's keep that in mind because when i moved to london 10 years ago, it was like 300. scarlet: steph curry saying it will go below one thousand. julie hyman, thank you so much. over in asia, the shanghai composite added .2 of 1% and japanese stocks fell because of a stronger yen on the heels of yesterday's earnings report. one big story out of the region is china's slow down and the recent tremor in the markets which has reverberated their earnings around the world. let's check in in hong kong. >> the afters

jeff curry said below $800. what is the consensus? are people not as bearish?rish and that is conflict morgan stanley is more bearish. stopped in fees it as a possibility. depends if we can they around the level or drift lower. the point is around 1086 is a 50% retracement from the rally we salt from 2009-2011. you are giving up half the game you got. that would be extremely bearish. that could lead to a lot more longer-term thing shaking out. scarlet: catch up. thank you. in the meantime, we will stay with commodities. heavilyany that relies on commodities is union pacific. they get most of the revenue from transporting items, which is crude and coil -- cold. the first quarterly sales declined since 2009 hurt the most by coal shipments. the shares are calling the most in eight months. olivia sterns and i spoke to the ceo. we started by asking him if the slowdown in cold is cyclical or structural. >> for slowdown is being driven by a couple of things. the first we came into the year with pretty good inventories at the utility plants. natural gas prices clearly

goldman sachs analyst jeff curry says the worst is yet to come. he sees gold dropping below 1000 bucks, the lowest self since 1999. i talked to ed butowsky, said it could gown to 650 bucks. >> that mines oil could go down too. i'm not that bearish on it. there are bunch of things headwinds to gold. strong dollar and headwind in the states, took top off it. go back to look, when the shanghai exchange started to tank, we saw liquid earnings or put up margin money in china. so that was definitely the beginning of it. and now the only two real reasons i want to get involved with gold, are number one to hide my money from inflation. we don't have inflation. arguably we've got deflation. number two is armageddon. we made it through the greece thing. i hardly think that is armageddon. i don't think there are real worries there. nothing tells me you want to get in front of this falling knife. david: another commodity affected by value of the dollar, that is oil growing down below 50 bucks. how far does that go? >> i think we go to make new lows. it is har

eastern time goldman sachs's global head of commodities research jeff currie will join scott live. that's tomorrow 12:30 p.m. eastern time. as we head to the break, take a look at two other big afterhours movers. very different stories. gilead popping on earnings and yelp getting taken to the woodshed. the latest from both those conference calls. how to profit off it after hours, straight ahead. >>> welcome back to "fast money." i'm meg tirrell. check out gilead. the shares trading up after hours after a big beat on both the top and bottom line. the company in the midst of its conference call right now. hepatitis c numbers that really showed a big beat in the quarter. the company saying it has 90% market share in hepatitis c right now. 470,000 patients wofrldwide have been treated with either harveoni or civaldi. the company also saying the hepatitis c market right now looks to be in the early days. however, it is saying that some patients aren't getting their prescriptions filled because they're having trouble with reimbursement. the company just saying that some patients are taki

are we at that point yet, or does that come when jeff curry -- where does he work? goldman is it?ng to make a joke. you have ubs concerned as well. do you end up with margin calls at lme? julian: gold under $1000 is not inconceivable. think about it, the british sold their gold at $250. tom: thank you so much for being with us today, julian emanuel. the euro is stronger 1.0922. ♪ telik boy at -- tom: apple enjoys a modest miss. tim cook says wait for the upgrades. commodities cannot find a global bid and in this hour, a conversation with senator don. this is bloomberg surveillance and where life from our world headquarters in new york. greece today -- what is your update on germany and greece? brendan: i think it is a breather where everybody is quietly assembling their new plans for the structure of the european union. tom: what are they debating about? somebody wrote them a big check? brendan: this is a step ladder that they have to work their way up and this is the second series of reforms they have to pass again. they had the defections and he refresh -- reshuffled his cabinet

erik: we have been talking to jeff curry, head of commodity research at goldman sachs.king around. what is happening in commodity prices and what is happening in the chinese stock market. iron or. let's bring up what i have on my screen. this is a bloomberg tried. you can see that over the past few days, the selling has been accelerating. 7% decline overnight and if i percent decline before that. a 3% decline before that. at the same time, the shanghai comp is down 6% overnight. what kind of correlation can we draw? jeff: they're a two components. what is happening in a clear markets and the second, what is happening in a broader economy, started to happen in this rotation away from investment in back to consumption which started well before the rise of equity markets. i like to emphasize this has a bigger impact on confidence that it had on the fundamentals pair what we're witnessing is for the first time policy makers in china stephanie: -- stephanie:stephanie: what is more important, confidence or fundamentals? jeff: fundamentals. the stat that came out is significan

jeff curry, head of commodities research at goldman, will join the traders.gs conference call starting in just a few minutes. twitter shares up a little less than 5% after hours after posting their results, guys. what do you think people will be listening for? >> obviously how's the ceo search going is number one. and then just broadly the strategic approach. twitter doesn't want to say they're for sale down the road. what are they going to do to stay independent? >> obviously everybody's going to listen to who they're going to have run the company. but a strategy from our perspective, that's what you want to focus on because again you get caught up in the specifics of jack dorsey and the management itself. this is not a fully functioning company, so to speak, outside of that debate. so where exactly they're going to take the company when instagram's doing what it's doing, when google and youtube are doing what they're doing, they've got to compete in some respects. >> and you imagine video's going to be a big point of conversation? >> i guess they're actuall

. >> jeff curry alluded to this. it's a confused data set at times.weekly report there was, for us a huge drop in crude oil production in the u.s. 145,000 barrels. that's quite a bit. it was an eye opener. i'm trying to see if there was pipeline maintenance or something that affected that number in the week. it's not unlike other data you get from the government in terms of the shorter term numbers then get revised up our down. i think net/net at this point we're still not seeing much of a decline in output. that's the bottom line. even yesterday's surprising number, i bet we'll see a rebound in that as well. the thing is the shale producers need to produce money whether it's very profitable or not. they're scrambling. they've bent the cost curve tremendously whether it's from shipping costs on the rails or other things or even day rates for the gulf of mexico rigs have come down tremendously. they're hanging in there by a thread. we haven't seen the breaking point yet. there will be a big washout, that's why there will be a price collapse coming yet.