one of the biggest currency pairs in terms of local trading is dollar china.hat is the one that is not being allowed to move that might have further to go. in terms of currency markets until the markets feel like dollar china is at a new level it is going to maintain uncertainty with these ancillary markets. with the level of interest rates having been compressed around the world, where is the incentive to buy emerging-market currencies? the incentive can be wiped out in a couple of days. there is no incentive to do that. a lot of this is about unwinding and risk reduction and that tends to lead to exchange rates that aren't near equilibrium. alix: does the quality and the beed in seen this unwind surprising to you? guest: i have been doing this for 35 years. that doesn't surprise me. big move in currencies. you see this in currencies that have been fixed. the erm crisis, how far did italy move when it went 20%. these are the moves you get when you get markets that are fixed. the problem.rux of the dollar china exchange rate is nine equilibrium and nobody know

is the stamp of authentication, okay, china and yuan, you can be reserve currency equal to the dollar. china wanted that power. >> the g20 has a rotating presence, next year it's china. november 2016, the past the g 20. so they'll let china into the sdr before that. that's the seal of the approval. deirdre: jim rickards, so glad you are here to lend your expertise. the author of currency wars. >>> chinese tech stocks that trade here in the u.s. down across the board. that can't be surprising, alibaba included u.s. tech companies, you're looking at an apple chart. swiss america trading chairman craig smith is with me now. craig, if china falters what does this mean for u.s. tech? >> i think the market showed what it is, deirdre, it's going to be tough, and i think when you are looking at a company like apple worth 27% of global sales come from china and for the first time this year that we sold more phones in china than they did in the americas, i think they have to figure out how they take the currency difference and take it off the bottom line or increase prices. one way or another, it's go

china story. it is not -- this is not a message to buy dollars.is a message to adjust the value of the yuan against other currencies. angie: i have some breaking news that we need to share with viewers right now. that is japan's machine orders falling. they expected a drop of 4.8%. looking at the year on year change, orders rose 16 point 6% versus estimates for a 17.6 percent rise. disappointing news for japan. they have massive exposure to china. patrick: it is a very volatile series. the numbers out of japan rok. japan has very strong exposure to china and if we look at chinese trade numbers that we saw last weekend, the exports to japan have been very weak. that may be a result of the weakness in the japanese yen. we have seen some weakness in the yuan. perhaps we can see some stalling and turnaround. that would be good for both economies. sell the economies which the most to china are most vulnerable. that is taiwan, korea him a -- korea,, the two that stand out. weaker chinese demand [inaudible] so the economies are at risk. angie: we're seei

the market will calm down in terms of how high the fix is going to get away and where dollar china ise over the next week or so but implications, it is going to put pressure on asian currencies, that ones that export to china and compete with china. that's going to be the big narrative here. japan, korea, taiwan, obviously, closely linked with china. they're going to feel the pressure. despite thate fact that it's mo market driven. but there's a fallout. >> is the cost the fed has to wait? >> i don't think at this stage this is going to materially impact the fed's decision-making as it stands. we've had a lot of little mini shocks over the course of the summer. greece, for instance, as an example and it hasn't knocked the fed off course that much. the focus is the dmes you can side in the u.s. >> what if it changes? >> if it goes to 10%, it will wipe out the de facto appreciation that they've allowed. that becomes more destabilizing. >> what does it do to this country if the yuan falls 10% against the dollar? >> it's going to be destabilizing. from an inflation standpoint, the next th

china should or should not do this. joe: david, you have been uan isg that because the y pegged to the dollar, that is hurting china. can you walk us through the mechanism? it to they have pegged the dollar, as you mentioned. thenet has been priced into markets already. as a consequence, monetary conditions in the u.s. have been tightening. you see that in one-year treasury rates. gettingof that is exported back into china. as china maintains that hag and it is being protected, it runs through reserves. on one hand, it is protecting a peg that brings in tighter monetary policy that is creating a drag on the domestic economy. onthe other hand, the effect interest rates, from november of last year, it has cut the prime interest rates four times. just imagine. they have cut interest rates, lower the reserve ratio. all of those things tend to but downward pressure -- put policy. pressure on but china is trying to maintain that peg. china is burning through reserves. they have had negative growth for the past six months. at some point, they have to devalue given their growth model. they did. left china over the last year.

china's growth. uber trying to raise a billion dollars in china from the wall street journal. with me now. so tell us. if those reports are true and uber is seeking to raise a billion dollars on the ground in china, it seems like u.s. tech not scared away at all by what we're talking about with china. >> well, it just continues to be the people who are being putting to work on these technology companies on the long-term basis. the evaluations now of a lot of those private companies, your ubers and snapchats and airbnbs and stuff like that, would exceed what you would get as a public company today and you're seeing that on a dramatic scale in china, it's down 12% for the year but people still putting money on this bet that there's going to be a transformation there as there was here. >> so here in the u.s., i'm assuming that this is why i want your view, that the average tech company here, that is well funded by venture capitalists, they must lebanon at this week and is forget it. even if i were thinking about going public, it's not going to happen, at least in the 12 months. do you think th

dollar started to rally dramatically from the middle of 2014. china didn't really join in. sn't much appreciation, but we saw the dollar rising the most in asia. as far as what this means for other currencies, the three we our korea,int singapore, and taiwan. are likely to move in response. >> the idea was that china was going to move for more andumption led structure effectively by appreciating the currency they were putting money into profits. as a result of which you would make this happen. where does that leave this idea? >> i think that was the idea of the market as well. china's goal of seeing the renminbi because -- become a reserve currency requires stability and confidence in the currency. what i don't think we need to see in china is a competitive devaluation or a trend. very important to couch this the way they have. it is aimed at market reform. i think that is very important. going to not suddenly see a lot of central banks making moves on the back of this? asked i don't think so. those currencies are most correlated to this. the most probably move in response.

stakeholders are salty that they are not getting their -- and china. >> it had been a surprise because they were holding the currency equivalent to the dollarn addition to their export number, gotten messages from the irs, that if -- they have to be more transparent. when this settles out, china is going to be growing faster than any developing country in the world. can see the currency after we get these speculators out of here. it is a developing country, but it is big and it is having impact on the developing countries. i classified china as a developed country. : the markets getting ready for a rate hike. 's jeff with us after the break. ♪ olivia: minutes showed policymakers did not think conditions for a rate hike have been reached yet. is with us on set. segment, the numbers showing a slowdown. that is nowhere near 2%. >> the fed has said they do not expect to reach 2%. i am not sure if inflation is the basis of what they are deciding to do. we have no discovery of what the rate is at which banks should be lending to each other. we are not going to know what should be the right rates out there. going to do something in september. we w

dollar. moves that whipped around to china, because the value of its currency is loosely pegged to the dollar. >> because of that loose peg, because the dollar has dropped against the yen and euro, china is down. when the people's banks of china decided to execute a one-off depreciation on tuesday, it's lit the surprise economists around the globe are crying currency war. >> this week evaluations came on the heels of weaker than expected export data. the china central bank insists it's not competitively evaluating, but changing to give market forces more influence. something the international monetary fund is pressing to do to earn the juan status. enjoyed by the dollar, euro, yen and british pound. but the timing of the devaluation is raising eyebrows in washington. >> the u.s. trade deficit with china has been growing, and a lot of politicians have been calling for policies to curb currency manipulation, that will make the voices loud ir. >> when it comes to currency war, any devaluation is tempting political fodder. roxana saberi reporting. >> ferguson, missouri will be under a state of em

dollar. for countries operating in china, a double blow.s notes the chinese economy will remain weak and the government in china is certainly very concerned about the weakness in the economy, so that's going to affect earnings of a company like apple in china. but in addition a lot of the foreign earnings in china and elsewhere are going to be affected when that money comes back to the u.s. because the u.s. dollar is stronger and china is going to keep the dollar stronger than it would otherwise be and that will hurt earnings in dollars, so it could potentially be a double blow for companies like apple operating in china. >> woodruff: mike mcdonough, what would you add to that? what do you see as its effect in the u.s.? >> what you need to look at isn't the devaluation. it was relatively minor. the problem is why did they do it? china's economy is hurting. it is slowing down. they're doing everything they can to stable -- in a best-case scenario, in my view, china -- they don't have a resurgence in growth, they stabilize growth. so you have

stick with jim. ♪ all right, remember what you need to see the sothe stock mar need a weaker dollar and chinad interest rates going down and oil going up. all for the grand slam, and you get a higher market. only three, hm-mm, like you say, there's a bull market somewhere, i promise to find it just for you. right here on "mad money." i'm jim cramer and i will see you tomorrow. (male narrator) tonight on the west texas investors club... (rooster) we've got you set up to cook for 100 people. huh? [upbeat music] (rooster) it's a test of his sauce, yes, but it's mainly a test of old jack himself. [coughs] (desiree) future college fund is a way to crowdfund your kids' college education. (rooster) how much dollars have you generated? about 1,300. this is tough. (male narrator) deep in the heart of texas, two men carved a fortune from a harsh and unforgiving land: butch gilliam and rooster mcconaughey. (rooster) butch and i have actually done it all. drilling oil wells... a cattle business... i'm 50/50 partners with one of the world's largest steel manufacturers. no one gave them a damn thing except

china's central bank devalue the yuan by 7% against the u.s. dollar.ajor asian indexes did fall with the shanghai composite about flat on the session but did call. a surprise move fair. in europe some significant moves to the downside in germany and france with losses of 1% feel in the selloff here at home. u.s. to record features looking like we see a lower open on wall street today with dow futures at 76 points. checking in on key commodities after china's move, the u.s. dollar sees strengths. you would think gold prices with you moving to the downside. the opposite reaction of gold as a tux, crude oil moving lower and a look at currency markets right now. or is the long currency higher in as the u.s. dollar sees weakness against the greenback and looking at the yield at 2.18%. turning to sports this morning. mets rally three runs for a come-from-behind 422 when. curtis granderson hit by a pitch with the bases loaded tying the game. daniel murphy drove a pair for the winning margin. but that's a state again in a ahead of the nationals who also won la

dollars. it was a horrible -- i think china saw an 18% lower. for every 1% drop, this is according to their financial statement last year, every 1% drop in the yuan erodes about $120 million u.s. from their bottom line. those industries that export capital goods, that's a positive for them. these industries have pricing power, heavy machinery to a lesser extent, some of these car makers in china, the cherries, for example. but the exporters, that's really seen as one area that's really poised to benefit from this. those that get a big portion of their sales from selling abroad. i think yesterday we saw a big op in len oveow -- lenovo. a caveat to this, an increasing number of these companies have started to settle or transact which is a bit more difficult to say what their currency exposure would be in this space. angie: you mentioned currency war. nobody officially wants to use that moniker. but of course a lot of people saying that japan has been getting a free ride for a very long time. maybe now china's stepping in. guest: is this going to b

the deficits we run up with china are inexcusable, inexplicable and we see corporate america investing hundreds of billions of dollars >> it's getting larger and larger that surplus against the united states, and at the same time, we're not enforcing our trade agreements that we've made with the chinese, and one of the things is we're not willing to call them a currency manipulator, even though they meet the requirements of the law. lou: let's be clear about this too, this is not just an obama thing or democratic thing. george w. bush was every bit as reticent, failed to decry the manipulation of their currency, and you know, john, you may be right, maybe we're not who we used to be. >> china is a platform for the united states and europe, right, that's what it is. apple computers are not manufactured in california. lou: you tell me what the implications are for apple computer. 25% of apple's revenue is in china. the products are manufactured in china. we're watching what could be a very serious reversal of a contraction of the economy in china, are we not? >> we certainly are. china claims 7.0% growth for each of th

it is not just the dollar versus china's currency. look at the european currency. erik: even more against theu. >> the euro is stronger against the dollar. the swiss is that more than 1%. it really just froze into the trash can all of these risk models that a lot of people had, basing their decisions on and basically, a stable china currency. the question is, does that volatility -- is it just a flash in the pan? the it work itself out and markets will settle or is it strong enough to have an actual impact on the economy in an of itself? but can this much financial inmoil, 150 billion dollars market capital lost from apple since february, is that the type of thing that can jump out of the markets into the real economy? matt: you can have an effect on the fed. two days ago we were looking at 56% chance that janet yellen would raise rates in september and today we're looking at something like 40%. don't we have a chart of said fund futures fed fund futures? i think we do. you should see about a 40 in change percent chance of janet yellen will raise rates. over the las

situation of china devaluing the yuan has been a major factor. rishaad: a strong dollar is good for you, isn't it? guest: it is good for trade generally. us. is welcoming news for it cuts 40% of our operating costs. rishaad: what do you do with that? if you were in aviation i would say, do you hedge it all out? guest: some hedging. but you do not want to hedge everything and one go. some float and some you hedge long-term. rishaad: there is always a consensus that maybe oil prices go weaker but and the long-term they are going to be declining. together you see we're coming down operating -- reflecting the fact that operating costs have been driven down so i expect the industry to be profitable for this year. the first half has been terrific and we are looking forward to a decent remainder of the year. as far as business is concerned with a long-term contract we don't really have the exposure so there willis be ups and downs. rishaad: walk me through this. we have charter rates which are high at the moment. then you have freight rates which are relatively low which are no

the things they were worried about, the dollar, china, oil prices of all gotten worse over that time period. then you get this dovish interpretation. you have to go back and look at what they also said. close to getting ready to raise rates. it is all about growth. myers, he is not a subtle, quiet guy. larry is all fired up. let's get going. the kazakhstan tenge, will it tell larry to be quiet? michael: i don't think the tenge is going to do it. there were two things people are tired of. one is deflategate. brendan: amen. raise rates already. michael: you've talked about it already. we will get past the volatility. tom: richard, what an interesting soup this august. help us from the chair that janet yellen sits in. the choice that she has. the toolbox she has available. what is it? >> she has several tools in the toolbox. she emphasizes, don't pay attention to the first. look at the past for liftoff, which she says will be very gradual. in terms of what is in her inbox or on her bloomberg screen, she is probably thinking, the world is a messy place. every day, you wake up and see som

china's central-bank sent a stronger -- set a stronger rate. aey have been allowed to use mustache to lose him was percent against the dollar this week. china says they will allow market forces to play a stronger role. finally, just how do you get to sesame street? from now on, by churning -- by tuning into hbo. the long-running children's show is moving to a five-year deal with the cable giant, better known for its cutting-edge programming. sesame street is produced by a nonprofit educational group and has relied largely on licensing revenue to stay on the air for 45 years. that income has declined as more viewers switch to streaming and on demand services. funding for public processing -- public broadcasting is scaled back. "sesame street" will be broadcast on pbs nine months after they premiere on hbo. molly: thank you for that. it is time for the press review. i am joined in the studio by florence villeminot. we are going to start off with in tianjin story china, where the explosions went off wednesday. flo: it is interesting to see how the media covers the story. "china daily" did not mention it at all. there was a blaring silence

dollar, and very close to its guidance rate. the people's bank of china says there's no reason for further falls, given the country strong economic fundamentals. reuters says sources involved in chinese policy may want to devalue the yuan more. i asked our financial correspondent about that. >> whether that could actually happen, we don't know what the motivation of the chinese government is. officially, horse, it -- officially, of course, it is market reforms. but they might actually want to devalue the currency even further. at the same time, we have those reports -- we have also reports saying that the state owned banks in china are actually selling dollars in order to prop up the chinese currency, in order to prevent it from falling further. reporter: this would get a lot of countries on edge when it comes to currencies. >> we would probably been see other emerging markets also trying to devalue their currency. we have the famous or infamous slogan of currency wars popping up during the last year, already talking about other emerging markets that face

dollar, and very close to its guidance rate. the people's bank of china says there's no reason for further falls, given the country strong economic fundamentals. reuters says sources involved in chinese policy may want to devalue the yuan more. i asked our financial correspondent about that. >> whether that could actually happen, we don't know what the motivation of the chinese government is. officially, horse, it -- officially, of course, it is market reforms. but they might actually want to devalue the currency even further. at the same time, we have those reports -- we have also reports saying that the state owned banks in china are actually selling dollars in order to prop up the chinese currency, in order to prevent it from falling further. reporter: this would get a lot of countries on edge when it comes to currencies. >> we would probably been see other emerging markets also trying to devalue their currency. we have the famous or infamous slogan of currency wars popping up during the last year, already talking about other emerging markets that face

guest: if china wants to be competitive in the u.s., look at the other major trading partners, the mexican pesos have moved 12% -- 25%. canadian dollar 20%. japanese yen 20%. china has moved 4%. there is a place for it to move if they are playing that strategy here. i'm not a strategist. i will avoid making an explicit forecast but if china was to return back to the same level of competitiveness in the u.s. with major trading partners it would require a 20% move. emily: if that happens how worried are you? guest: i would be enormously worried. i don't believe it is going to happen. you would have a few percentage points down but i would view this development as a long-term positive. the motivation behind china's move to a more fixed flexible exchange rate is to motivate to global reserve currency status. you will see a big increase in demand for assets. i can see a case for appreciation. emily: what about the markets? guest: the stock market is a lottery in china. it is not the economy and the economy is not the stock market. broadly speaking there are still many companies trading beyond any measurable fundamentals. even some are som

. >> they have let me do china a little bit i think a lot of people miss this the dollar past year, hasreciated 22%, he relative to currencies china pegged yuan to dollar during that year chinese currency appreciated as well an prescienting currency you always have lower triple digits, inflation now that china is on hooks from the dollar you would expect inflation numbers interest rate numbers to rise alleviate some pressure that is true uas it had a strong dollar with low interest rates low inflation. >> when you look at world news you have never mind charlie's chinese yuan but vietnam, the ding-dong was devalued this morning you have the indian rupee under pressure indians saying we can't cut interest rates with rubie two year loss versus dollar does fed policy look at janet yellen i can't find it in federal reserve 1913 act accurate to state where rehearse to deal with the rest of the world's burning currencies issues. >> i don't think we have to deal with rest of the world's burning currency issues if you go to 70s you can see countries had very different monit monitory policies swi

dollar. the, china's reassurance of evaluation moving things along as well. mark: a check of the bond markets. the two year yield, look at that change. betty: a lot of fear with china, the zyields. mark: this has been one of those weeks where use all the ripple effect in china, and we said the other day jokingly when china sneezes, the world gets a cold. absolutely. we saw that vividly in the oil market where we saw them tank this week. they are continuing to fall. look at nymex crude trading near a six-week low. inventory issues a big issue right now. we seem to be continuing to pile on and seeing supply glut weighing on oil prices. going inside the terminal. x index,see the cboe vi which shows volatility of oil back at the highest level in four months, which we saw back in april. crudewe have seen brent also down below $50 per barrel as well. take a look at the top stories we're following up this hour. betty: growing demand from everything from close to cars last month. retail sales up .6% in july, matching economists estimates. june sales revised upwards.

manus: china has unexpectedly devalued the yuan by the most in two decades. they cut the daily peg to the u.s. dollar move triggered the yuan's biggest one-day loss since 1994. let's get a little bit more on those markets and the moves. johnny has it all. john? jonathan: that china story, painting this equities map blanket red. the ftse in italy, half a 1% on the ibex in spain. the dax and in frankfurt down over 1%. the cac 40rks some significant losses there as well. if you're just waking up on wall street, the dollar against the chinese currency. dollar. bashing along the bottom for most of the year and overnight a surprise move. the biggest one-day drop for the chinese currency in two decades. there we go. a stronger dollar, a weaker chinese currency. is this really about market discipline for the currency or just about a dreadful set of export numbers over the weekend and reacting to that. you can talk about politics all day long. for the market it is about one thing. it is about purchasing power. that is why you see the spillover into the commodity markets. copper down about 2% on the session. l

dollar stocks going up and china pegged to the dollar has a very expensive currency. hinese currency -- chinese economy starts getting worse because it can't export because its currency's less competitive. so this whole thing starts. china's economy slows. oil prices fall because demand has fallen and the dollar keeps going up and up and up. and that's creating the issues. and what's happening is as world growth slows u.s. export growth has collapsed as well. so what we're seeing is it's knocking on to everywhere around the world. this is very typical of what happens in vulnerable markets back in the early '80s and the late '90s. >> so which spot should we be looking at first? because obviously we've already seen a collapse in emerging markets, we've seen a collapse in oil prices. how much worse can these things get-k these trades get, or the dax for that matter? you came on the last time talking about how everybody is consensus long this and already we're here in correction territory. >> yes, that's right. so i think you know if i were to say okay where's the next sho

the story right now is that this has nothing to do with the dollar and this is just a china trade. nish: i would agree with that because look at euro-dollar. seen -- with this, the imaging market has a lot -- it's not quite 1997 where you would pay for the dollar and everyone took the pay off, but that is what's happening with the yuan. it's not quite that dire. especially in india, it's a very minor current-account and low commodity prices is going to kick in. the balance sheets i think will do much better. marcus mentioning going forward -- when we try and differentiate between these different currencies, we are moving from the fragile five to the vulnerable 10. when you move away, has the story changed from the current account deficit story to just the commodity producers? the proxies for china? phoenix: yeah. i think it's largely the em effect story. balance very much on the we expect that pain to continue with the domestic economy slowing down, because of decreased trade to china. jonathan: the backdrop to all of this is the commodity rep. -- route. when you look at court gover

we saw early in this process that the dollar was weak itself. china is now out there weakening its currency. so comparatively everything else is that much more expensive which means, our bills to china could go up. donald trump is making big issue on campaign trail. hear him last night with bill o'reilly. >> funny money. they devalue their currency constantly in order to take our jobs and lots of other countries jobs frankly. they devalue point to where they want to take even more money out, even more jobs out, increase and all of sudden they have a big fat beautiful balloon popping right now taking with us us. trish: they devalued and by weakening that currency it also creates an asset bubble of sorts there in china. charlie gasparino came out with very interesting column on markets and trump today in "new york post." let me share a bit with you. he writes as well as continued lackluster economic growth it could certainly get worse, dramatically worse just in time for the 2016 presidential election as economy becomes even more speculative, trumps cha

dollar rise. up against 16 major trading peers. it is dominating because of the yuan move. china trying to devalue and trying to play catch up as we will speak at the stephen saywell. the dollar has rallied higher against asian peers a global peers, will not see -- will not seen it. the overall affect market to very stable. they let go because the data makes too much sense to start a export growth. dollar rallying higher. will it play in for the federal reserve thinking of a rate rise? is this exporting deflation to the rest of the world from china? will it mean they are less likely to do rate hike? dollar goes higher. 1.9% higher. willolleagues in asia point you through that. other asset classes for you gold, the dollar rally higher and gold goes lower. the dollar get stronger, gold less of a cooling to it in terms of a place to put your money and a safe haven. the stocks in europe on the back of the chinese move. the of w daimler, look at the moves. almost 2% lower. -- bmw, daimler, look at the moves. stocks. affect your no big luxury to selling to china. luxury into china, lvm

people say this is the most widely advertised fed move in history, and the dollar has priced and most of it. look what happened when china devalued. the dollar index went down. the dollar got weaker. a lot of people are saying, it is ok for the fed to do this. an interesting statistic out today people have not focused on. is this inventories came out. inventory building continued for the second quarter for june. economists have taken their forecast up to over 3% for second-quarter growth. if you have 3.4% growth and an unemployment rate of 5.3% and are creating 200,000 jobs a month, the fed is going to say we are behind the curve, we should do something. scarlet: i want to bring you inside the bloomberg terminal, because when we talk about all of this, there is a divergence between equity and credit markets. you helped me out with this. he yellow line is the vicks. the vicks is clearly more jumpy. -- the yellow line is the vix. is clearly more jumpy. what is driving spreads wider and why is it not showing up in equities, do you think? the bond yields and in particular are more heavily weighted in energy than, say, the s&

interest rates, dollars, merging markets, china. thin markets.at deal of cash to move these things around. i think i mentioned on this show a few weeks ago, i thought the global economy was a bit of a mess. i think events have tpwhoorn out. what we have seen in china is symptomatic that they are having difficulty rebalancing the world's second large economy. i felt for a considerable time they needed to pull that deval lever. as we have seen it ripple through asian fx and the impact on commodity prices and commodity stocks, of course it is going to have global implication. guy: what should we make of the fed? what are the implications for investors from the fed? >> july 29 is when they made the decision they are more worried on both counts now. the data coming in from the u.s. is a little bit firmer. if you look at the objective bench benchmarks in terms of 2% benchmark target this year. it looks like they are going to beat that in terms of the unemployment rate. 5 tony 25% rate. they are more or less there. i think the market is still a little b

the dollar spiking against the juan, following china's devaluation of its currency. residential candidate donald trump weighing in on issue. in interview on mornings with maria on fox business trump saying strong dollar is hurting the nation. >> strong dollar sound good, it sounds good because we have strong dollar. >> that is what they always say. >> that is where it stops. if you look at it, you could say we have strong dollar and strong currency and there are certain advantages to that and there are certain huge disadvantages and the disadvantages our companies are really suffering. >> the way he says the word huge. i want to point out as we talk about the china selloff. companies that do business with china, malaysia, indonesia, their currencies at 17-year lows versus the dollar. trump is heading for a big rally in alabama at a football stadium. they're expecting 30,000 people. for complete coverage, "lou dobbs tonight," 7:00 to 8:00 eastern on the fox business network. i'm excited. >> go, lou. we have you covered. breaking this morning, u.s. agencies suggesting t

the yuan colin after china began its current 1.6% from yesterday's raid and hitting a four year low after the country surprised by devaluing against the u.s. dollarrior day. the most aimed at boosting china's struggling economy and one expert telling around liz claman. >> the weapon they used today for the economy are not giving them the confidence that growth is going to stabilize in the 7%. the currency has always been the big resume for. it is a problem to use that type of artillery and a weak global demand climate. sandra: the big as dukakis let their currency is. u.s. lawmakers for years have accused beijing of manipulating its currency in beijing was that darker forces. china's central bank is trying to ease concerns of further slicing it is on no basis for continued dish appreciation and keeping the yuan at a stable and reasonable level. let's take a look at the names here we know so well. you can see sky works, qualcomm, 83% of sales come from asia and china in particular. when qualcomm, broad come, john phan, should i keep going? a multiyear low yesterday. that is because they import raw materials and we sat otted -- the apple get hit ha

china alone. we already have another record first half of the year. the firstn dollars in half. ybody should be concerned about what goes on in china. innovation and new technology, especially to get their growth going. they will find it in israel and the silicon valley. betty: what are they investing in? jon: real technology. we are on the verge of a 10-30 year growth based on some absolute game changers. we are going from 5 billion billiond devices to 100 . that will not be trivial. it will change our lives for the better. , but is some fear about it it is a big deal. we are investing in a company that does missile technology. it basically powers the iron belt. israel's antimissile program. they know how to handle millions think of electrical grids, water networks, smart cities. that is the kind of stuff that china wants. they want drones and robotics. they are looking for the hard stuff. betty: are they going to israel first? he for silicon valley? i think they are doing it at the same time. multinationalplus r&d centers. now, to have an israeli product in china is good. it is

the world is waiting for china to do something with its 3.9 trillion dollars are here. cutcut, interest rate silenced. how much silence can this go on? do you think china at some point this week, next week, couple days, maybe the weekend might have to step in? guest: definitely. as i mentioned even despite the slowdown, despite the weakness of the market, pboc has not yet cut interest rates in the pasture month. developmentsrket will force the pboc to act. i do see some high probability this weekend and because otherwise justify postponing this policy response and waiting for my it is quite dangerous and risky. the chinese reserves as you point out in the beginning of the year is three point 9 trillion but now it is over 3.6 trillion. 300 billion dollars less. that is a sign that the usa is putting money away from china. i think including the latest market turmoil will put pressure on chinese policymakers to act quickly. i do see some possibility of this weekend, china will do something. angie: that is a prediction right there. we will leave it there. predicting pboc mov

foothold inger china than four does, but ford is committed as well, billions of dollars of resources hina. apple,e can extrapolate other luxury goods makers. that is it for me. "market day" continues. ♪ this is a great place to work. not because they have yoga meetings and a juice bar. because they're getting comcast business internet. comcast business offers convenient installation appointments that work around your schedule. and it takes- done. - about an hour. get reliable internet that's up to five times faster than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. matt: welcome back to the "bloomberg market day." i want to give you a look at this morning's 10 headlines. starting with jet push, he will step -- starting with jet push, -- he will say the democratic front runner, hillary clinton, shares the mistakes that led to the rise of islamic's eight. mrs. clinton is making two stops today. she will make a town hall on her college affordability pl

china allowing its currency to weaken against the dollar for a third day in a row. l sorts of question about the death of china's slowdown and how it will reverberate. joining us is pimco managing director and global economic adviser. >> good morning, sarah. >> you wrote your first piece on the three gluts. let's start with china. that really is the center of the universe right now. are you worried about the ramifications of this uchlt u-turn in terms of devaluing the yuan or are you calmer about it? >> i think there are some reasons to be worried. two major economies in the world that were willing to let their currencies appreciate. that allowed the rest of the world to export their deflation. these two were the u.s. and china. china just decided to jump ship on monday. i think china has now started to export its own deflationary pressures to the rest of the world. i think that gives reason for some worries. >> how far do you think they will let the yuan slide? >> we have now seen a 4.5% deflation. i don't think the buck stops here. we will see further devaluation.

. >> unbelievable video in china as well as that is gajillion dollar body there, if that happened tounched the gai in as if he live tv. >> somebody have it me on a big i busted spokes out on one wheel with my foot, sorry. >> awesome, note arrested though. >> don't cross dagen mcdowell. >> don't run do dagen. >> huge story this morning crude coming off biggest one day gain in more than six years energy sector leading the gains yesterday, seeing biggest one day gain in almost four years. leading the stock market rally, on wall street, in chicago, on floor cme you are watching this wild ride in commodities oil just a huge story what are you focused on this morning phil. >> i think you have to focus on oil, actually, what it will do for the -- meeting and decisions we just had fed come out with comments, basically saying, about what is happening in oil what is happening in china, may not be a surprise, in china but we have to be data dependent what is going to happen with the data we are concerned about low inflation, expectations becoming anchors but having said that, i mean if you look

dollar. this is china. here is a rubin dollar, and here is the latest dollar move. all you need to know in logarithmic august is this is the move of the rubin dollar. you can bring this right over and it shows you how much we have done so far of the so-called strong dollar. brendan: you talked about it is not just a dollar story, it is all of the various crosscurrents. does this story shifts two years from now when mario draghi make the difference? olivia: that is the challenge for janet yellen. this is not transitory. tom: right now it is a dollar story. jon ferro is in london. a strong sterling as well. this is about yellen and carney. what is the distinction between those two central bankers? jon: the only major two central banks on the planet thinking about hiking rates. very different in terms of action. the market is pricing with hikes at the bank of england in may. tom: when you look at the dollar weakness, i look at athens rolling over again today. what is the nearest follow on is it that gold is going south or the equity markets in europe? jon: i look to eu

>> china has shadowed the dollar.ey're saying now because their economy is weakening and our economy is at least stable, i don't know how strong it is, they can no longer shadow the dollar. i think that's what they're saying. the move against the euro is very, very small. the move against the yen is very, very small, but what you do have is a worldwide drop in commodity prices, which i think is being led by the federal reserve's rhetoric about raising interest rates. and i say again, be careful what you wish for here. usually, usually you raise rates when currencies are rising and commodities are rising, and so forth. i'd be pretty concerned about that. as i've said before, the fed policy, the speed at which they raise rates should be about an injured snail, okay? that's all they should do, maybe one and done and get out. >> on that metaphor we leave it, sarah, john, larry, always great to see you. interesting conversation. we'll be right back. >>> we. now our week-long look at what's being taught at the nation's top

the european central bank started bond buying to devalue the euro against the dollar, moves that whip sawed around to china because the value of its currency, the yuan is loosely pegged to the dollar. >> because that have loose peg, as the u.s. dollar has strengthened, china's currency has, too, even though exports are down and its economy flowing. when the people's bank of china decided to execute when it called a one off depreciation tuesday, only to cult its value again on wednesday, it's little surprise economists around the globe are crying currency war. >> this week's yuan devaluation came on a weaker than expected account port data. china insists its changing the way the exchange rate is set to give market forces more influence, something the international monetary fund has been pressing beijing to do to earn the yuan global currency status enjoyed now only by the dollar, euro, yen and british pound. the timing raises eyebrows in washington. >> the u.s. trade deficit with china has been growing and politicians calling for policies to curb currency manipulation and this will only make their voices lo

yen rate matters less than the dollar yen you one rate. china'smy is more important by about 13 percentage points. the weaker china gets, the worse it is for japan. again, it is about weakening the yen. china is competing in japan in this race to the bottom. the one thing japan's economy have going for them is now being questioned. as doj will have to do more the year goes on because it is the only source of stimulus. >> 32 months of abenomics.how is it doing? >> i would give it a four at best. it has three arrows, but really it has one. it the central bank. the third arrow, the most important one will make japan more competitive. activity, i would give it a four. and i think that would be generous in some ways. you would expect japan would be growing at a steady pace to be creating jobs. that is rising. it is mandate after all. >> you know you're not the only one harshly judging abenomics right now. our bloomberg view columnist. >> we are seeing a little bit of mixed picture in the asian region. china will probably resume by years end. on the mal

dollar, which is more important right now does greece or china? th the dollar renminbi, that is a new price, we are looking at $6.21, a weaker chinese yuan this morning, but no dollar strength yet. equity futures -11. brendan: this is "bloomberg surveillance. " i am brendan greeley with tom keene. we have discovered a new drift. bloomberg is announcing that hackers stole press announcements and then quietly traded on them. us from washington. i'm trying to figure out the mechanics of this. is this what they call a zero-day hack, or was this a really clever idea? we do not actually know how they hacked the servers, but we do know it is a real clever idea. what they did is targeting the companies, the fortune 100 companies that companies use to release numbers including earning financials and other numbers. they got in the servers, they watched, they waited to see what kind of breaking news was about to come, they traded on the news, and over a period of four years, five years, made about $30 million. it was a good idea. brendan: how do you roll up a

china and japan. is there anything to that? what does that mean? to the extent that we are going to assume a strong dollarling x orders and hurting producers. to some extent, we are playing the patsy. if we see china and devaluing their currency. if china reverts to its old model of devaluing the currency, that comes at a cost to the u.s.. you have to think about americans who vacation in the mediterranean. they are not thinking about a 1%. car: i'm going to be listening to some sort of cost control. the college plan is great. are throwing more money at student loans, that inflates college prices. be cost control. brendan: when you control subsidized student loans, it raises the cost of college. we learned that with housing and we are learning it with college tuition prices. tom: the generational change, i do not see that yet. a lack of suggest is discussion of the economy, the idea the anger of america. chairman greenspan talked about this lack of productivity. that involved -- that eve evolved into an anger. both parties will have to contend with their flanks on this sense of unease. has easy solutions.

dollars. they also know -- what does china do? they basically imports of a finished goods, symbol them, and export them. the actual ad you -- value added is very modest. they know this is not going to help exports that much. betty: policymakers also said they will step in to control large fluctuations. the speed at which the yuan fell this week sparked concern that stability.fect sales of cars and building onelies, june's number adjusted upward. and gasolineis up prices down. but americans are still plagued by money worries. the bloomberg consumer comfort index is at a two-month low. -- lastrveys lest week week were more upbeat about buying habits. the average long-term u.s. mortgage rates moving higher this week after three consecutive weeks of declines. they key 30-year alone remained under 4% and the rate on a 15-year fixed-rate loan a little bit more than 3.1%. betty: we are near the weekend. call it the beverage of champions. please -- wheaties beer. it's available for a limited time only in minneapolis where the cereal maker

dollar, finally a rebounds today. one of the reasons people offered was if you need liquidity somewhere, and you can't sell your stocks, stay in chinaollare to sell denominated assets. there was a selloff going on in commodities, which are priced in dollars. and then the fact that people thought the fed would push off the rate hike plans to december, maybe even 2016. let's take a look at the top stories crossing the bloomberg terminal at this hour. sales in july, rising. a sign the housing market is still growing, the increased 5.4% last month to a seasonally adjusted rate of 500-7000. these are new constructions, the biggest gain this year. the government revised june's data showing a decline of 8%. still a bad number in june. sales account for about 10% of all home purchases in the market. americans are growing more optimistic about the economy, according to the conference board's consumer confidence index, which came in higher than anticipated. with larger household income were most confident because they are so rich, those under 35 years old were more confident than those over 55 years old, because they are young. so rich and yo