europe, japan, and even the u.s. i'd be looking for companies you already like there and taking advantage of a slightly better entry level. i'm still on the way tome engineering markets. yes, i think china's largely priced in but i think they face other headwinds in the form of the fed and higher interest rates. you'll just get better bang for your buck with europe, japan, and the u.s. especially if ugh hedge out our euro and yen. >> great to speak with you. >> thanks. >> rebecca patterson, bessemer. for more on china's historic move our own b.k. make his way over to the smartboard. sashaying, if you will. >> yes. >> what are you taking a look at? >> i'm taking a look at the u.s. dollar-chinese yuan rate. that's what we have right here. this goes back to 2006 before the last crisis. if you look at it, what happened today, which is right down here, is unremarkable. you wouldn't even notice it on a chart, right? which is what rebecca was just speaking of. however, i'm in the other camp on that. i think this is the begi

into japan, money into europe, and also looking at china. >> do you think they're on track for the 2%nflation goal? >> that is a tough one. that is tough to achieve, unless they actually change the composition of the cpi basket. many countries in the world of the last 20 years have done that. in japan is prepared to do so, maybe they will do it. >> one thing that is interesting is that it is very product specific. it is very curious. but indeed, it is a good measure , a good barometer of what is happening in japan. still the least, there is a labor pressure right now as people see to find wealth and grow. >> that is definitely the trends. the important thing is that wages have started to rise a little bit. it is not just the stock market hitting an all-time high, but the wealth has spread a little bit across the whole nation. the demographics are still against japan, and we know they are a more saving nation rather than a consuming nation. it will be a tough time for us to see a core inflation rate approaching to present any time soon. >> it'll be an interesting buying opportunities t

the developed world, is you spent time in europe or japan, it has never really recovered.harlie: and the united states? justin: the united states has recovered but not growing at the same levels we were going precrisis. and i don't suspect we will be growing as an economy at those levels. charlie: cap best 3%? justin: i think that's likely. it is difficult for the united states to escape the rest of the world. charlie: you have some unique experience here. -- china hadwisdom been an expert in country. she's in paying and the chinese leadership understood that they needed to move to a domestic economy, as you have suggested. most people did not think that would be easy and most people did not think it would be immediate. justin: yes. charlie: you think what? istin: surprising the most there is a master plan that will never be executed well. however, we have a complex adaptive system, like all economies, and things are moving. the economy is transforming, and there is no visible -- invisible hand leading this transformation. china is an economy that is growing at very health

the developed world which is clear if you spend time in europe or japan, has never recovered, it's never really recovered. >> rose: and the united states. >> and the unites states has recovered but we're certainly not growing at the same sort of levels we were precrisis. and i don't suspect we will be growing as an economy at those sort of levels. >> rose: you expect we will be growing at best 3%. >> i think that's likely. it's very difficult for the united states to escape the rest of the world. >> rose: i'm trying to look at-- you have a unique experience here at some of the conventional wisdom. conventional wisdom, for example, china had been an exporting country, xi jinping and the chinese leadership understood they had to move to a domestic demand economy as you have suggested. most people didn't think that would be easy. and most people didn't think it would be immediate. >> yes. >> rose: you think what? >> i think that surprising the most, there is a master plan. but the master plan will never be executed well. however, we have a complex adaptive system like all economies. and thi

whether it's been in europe, japan, china's had their version of it and of course we've had.nd if you look at the study that came out last week, the other studies i think all they've accomplished was they've over done asset prices. they've pushed asset prices way too high. the economies and all these countries have not performed as all the people hoped that qe was going to save the economy. yeah, they give the default. what would have happened if we would have done it? the assistance nobody knows. but nobody expects the economies to be this week and soared as much as they have. so they've created a bit of a distortion, and i think that's been the problem. >> rosy, that's part of the problem with what the fed now faces come september. i mean if you're janet, how do you move interest rates higher when the rest of the world is doing, including china, the opposite >> well, i think that the contract in the front-end of the right, which is basically that the fed rate hike is a low odds bet at this stage. i know they desperately want to get off zero. maybe they should have done it l

we continue to believe, when you look at the dynamics both in europe, japan, and emerging asia , thatportunities remain here in the u.s. topite the fed's attempt raise short-term interest rates, we still think interest rates will remain very low, probably to 2.5% range. we think that is a supportive environment for stocks. from thes have gone high end of normal range to a much more reasonable level. based upon our forecast for the s&p over the next 12 months, we think the market is trading around 15 times earning which is very much in line with where it has been over the last 25 years or so. matt: what do you think about investing in asia? i relied this is for someone who is a long-term investor and should have a costco box of pepto-bismol by him at all times to reference one of your recent notes. the ceo of ford says they are investing their and still believe in a long-term. thinks they are seeing increased sales there and he is very happy about china as an investment for the long-term. separatek you have to the performance of the stock market which has been on april roller coaster b

the same is true in europe japan, and other developed countries.ow do we get other people in other countries to put some skin in the game? why is it always americans who have to foot the bill for all of us? guest: your point about being hunted about alzheimer's is not unusual. it's the second most feared disease after cancer. for those 65 and older, it is most -- the most feared disease. it is true that the united states leads the way in alzheimer's research, just like medical research in general. that's starting to change especially in the asia-pacific region where we see china and other countries investing heavily in alzheimer's research. one reason they are doing so is not just to carry their share of what needs to be done but also because when you invest in your own country, you have a lot of other benefits as well. you build up a scientific base and the foundation for the next generations economy -- next generation's economy. there are reasons beyond altruism to say that america is wise to invest in disease. it's also true to say other countri

japan continues to pump liquidity. u.s. are seeing the talking about normalizing. people are expecting it. on the other side, we see europeng unprecedented levels of qe. i think of it as a rubber band. valuations have gotten tighter and tighter. people are more concerned about them snapping. for example in china, there is thatng growth, and fear the diversions -- the title d is making people concerned. ivergence do you expect the volatility to continue >> this feels like horrible volatility. last week was rough. the: this takes us back to 2003 timeframe. >> yes and you need to have the context. when people under react and then overreact. it is not horrible. horrible,nt is not jobs are being created. and if you look at china, if they were in a bubble, and now the bubble is coming off. we are not in a horrible situation. -- central back is bank is being accommodating in europe and japan. people will realize that they were overreacting. are their sensible places to invest in a world of high volatility? >> absolutely. we want people to make sure they are focused on taking a deep rest and calming down. this is an overreaction.

the nikkei in japan down more than 4%. over in europe in bear market territory. tranter we saw plunged last week. this morning the s&p looking down 32 points. 1.5% pay down the big picture. 334-point c. all down arrows looking at oil and gold. oil down 4%, below $39 we are also taking a look at gold which is then the safe haven right now pulling back as well almost five bucks at 1154. lauren: here is how the dollar is trading. the euro and the yen but safe havens. as for the yield on the 10 year treasury still holding 2.03% at the moment. nicole: we want to get you caught up. $5 trillion in global stock market value has been erased since china devalued its currency. we will talk to a strategist about why devaluation has caused near panic in global stocks. oil prices also a major during the selloff. oil from it below the $40 a barrel mark. good at the gas pump but not so good at the big oil stocks. we check on crude oil to the downside about 332 points right now. a huge selloff last week continues. you are watching "fbn:am," your first lo

some of it is china, the world, europe, japan, singapore. the whole world is slow, the earnings will not be there to support the stock prices. we have a lot of selling. >> where is it headed? >> it's going lower. >> you know, you look at some of these things, you look at what is really happening, there's a technical analysis, and not to get wonky, but you have programs - we have 400-500 points on the downside. monday is not a pretty opening unless something happens over the weekend. >> at the same time oil prices are at the lowest level in years and years. that means a lot of things will not cost as much as they have before. does that help consumers when it comes to prices? >> it will at some point, but what it's really saying is that the world has slipped so much that they are forecasting demand to not be there. therefore, that hurts earnings, i love seeing oil prices lower, and that should help businesses, at some point that will help some industries, but the cloud of the slow world economy is so great and intoxicating in terms of being a

every major trading block, north america, western europe, japan, and now china, when they get caughthe cycles that beset capitalism, seek to improve their situation among other things by devaluing their currency. it's the normal maneuvering of all of them. so it's a little bit disingenuous to get angry at the chinese, they have joined the international club of capitalists, and now they are playing the game the way that system works. >> and is it fair play? >> well, you know, it's a question. everybody else is doing it. it would be bizarre to expect the chinese, if they are having economic difficulties, which they clearly are, to discyst from one of the standard things you do, which is to manipulate the value of your currency. the most important exporter in europe is germany. germany benefits by having the value of the euro artificially lower, because it effects the weak economies of spain and italy and greece, and so the value of the euro is lower, and that makes german exports more competitive in the world. do they manipulate things that way? sure they do. is part of the struggle wi

institutions which aren't as stable or robust as the developed world, which is largely the united states, europe, japanlie: you are talking about -- justin: sociopolitical institutions, rule of law, different levels of political engagement, institutions that ferment development. and it's a pretty generous bunch, in many dimensions. some are very well-developed, like eastern europe. there is a big difference between warsaw and bombay in terms of levels of affluence. there is a very big difference in terms of the commodity orientation of these geographies. we have some who, in the last 12 months, suffered enormously because of the drop of oil prices or copper prices. laces like nigeria, chile, and russia. and then we have resource importing countries, places like china, korea, taiwan. so it is a very heterogeneous bunch. i agree, i don't think the emerging markets is the right way of thinking about this world. but you asked also about the brics. i think they all probably are perfectly considered part of the emerging world. china,: let me turn to and what is going on over there and what is happening with

. >> europe and japan are seeing much better earnings relative to 12 months ago than the u.s. that's why i'm more concerned about the u.s. because earnings have been a little poorer. they're still mixed and all right but expectations have been lowered and when you think nasdaq is up 8% year to date. you have the s&p up about 2 or 3%. the dow is down but only fractionally and i don't think we're seeing earnings positive enough to justify these equity markets. europe and japan is systemcoming off a low base and they have qe. >> and then you have the stronger which is a whole separate conversation and the impact that's having on multinationals. >> let's focus on one company in particular. toyota. record profits announced earlier. beating on the bottom line in the first quarter thanks to cost savings and a weaker yen. we're joined live from tokyo. >> thanks wilf. for the third year in a row, first quarter profits at toyota hit a record. there are two factors for these numbers. one is is the currency factor. as you mentioned the weaker yen helping japanese auto makers across the bo

you like europe and japan and the u.s.. what are your final thoughts? continuing to stick with the earnings, several years i have strong earnings growth in europe and japan versus the u.s. given the margin situation on top. maria: the greece story of of the market. >> great opportunities in july to add the pullback, we recovered basic year-to-date highs. and to take the market higher. japan same thing. valuations moved higher, still looked pretty attractive and if you will valuations' city, 15% to 20% earnings growth is a great return. maria: the strong dollar has been such a big story, currency hedge, you want to continue to hedge out the end because the end goes local. >> the big move happened and from a u.s. perspective everyone trying to figure out what the earnings growth could be next year. we still think the euro weakens versus the dollar but not something we have seen in the last 12 months. maria: the week 0 and a weak yen helped the economy, selling at, exports out of this with currency will be positive. >> we have seen a pickup in the japanese

jim, any opinion on the russell or small caps on the europe or japan trade? of these things you're supposed to have a strategic allocation and the moves we're seeing in the markets should not deter you from that one way or the other. because again going back to the analogy i started at the gipping of the show, the economy is what matters. you've got a european economy that's improving better than anyone expected three months ago. that's a reason to stick with your game plan. in terms of emerging markets, we do think you're supposed to have exposure. but -- and here's the important caveat -- you have to have an active manager who knows ha he's doing. i'm a u.s. portfolio manager, i'm not going to pick a country. have a good active emerging manager who will tell you what countries to be in. >> gold sliding more than 1% today. bertha coombs is at the nymex with more. >> you know you take a look at gold, you would think when markets in turmoil this would be a safe haven. it isn't happening this week. scott nations as anthony grisanti joining me. if you look at go

south korea, red arrows in hong kong and japan. europefootsie, cac, the dax, up .1, .2 of a percent. weak gdp numbers and greek lawmakers approvalling the bailout. looking to the downside for the dow, nasdaq and s&p. it has been a mixed week. waiting on ppi report, and also sentiment numbers. here is the story. oil? fact looking like it will be down for 7th week in a row. >> show me 40 bucks, baby. also breaking this morning, u.s. now claims isis used chemical weapons against kurdish troops in iraq. after more than 50 years the u.s. embassy in cuba will reopen. fidel castro is already asking for millions in u.s. cash. and this. [explosion] did firefighters in china actually fuel those massive explosions? we'll have the very latest on that story and what the aftermath of that blast really looks like. good friday morning, everybody, i'm lauren simonetti and joined by nicole petallides. sandra smith is off today. welcome to "fbn:am," a look at what is moving in the markets and latest breaking news and what to expect in days ahead. latest bre

the ocd area.uff, europe, japan, a big part of america. it bounces more evenly. the big parts of the world. because they are more energy efficient, it will continue to give you a downward pressure on the prices. demand will be a little bit softer. emerging markets in bigger trouble. financial part of the that will take of them down a bit in this kind of environment. you could be in for a long pedal of time, 10 or 15 years. is starting to change after the stories. francine: we're talking about gas at what you were saying and the projects that it has and the prospects, not a problem for the emerging markets will oil rich companies. will kennedy: a very ambitious plan a is trying to build under the black sea of turkey. this was ambitious when oil prices are up. to 100 dollars. it's looking unrealistic. a currency that has been hugely volatile and russia and one of the worst performers. oil prices under pressure. the move in the ruble. have we passed the worst of the russia story so far? erik nielsen: i do not think so, unfortunately. we talked about china earlier. r

maria: japan nikkei at 3 1/2-year low. europe is under pressure. even under equity side internationally there is no place to hide. >> some of those things really helped to survive the financial crisis. all those emerging markets are falling. >> for long-term investors, keep in mind u.s. is leading six years, international, where they didn't go up like the u.s. they they are falling farther. there will be opportunity for investors. not seeing price to earnings ratios abroad you're not seeing here. >> be brave. maria: what opportunistic areas are you right writing about this weekend? >> i'm not aware of a single foreign story. one foreign story stock specific i can't talk about it. that might be indicator. even "barron's" is looking abroad. we have fascinating story on cancer. we'll talk about it. maria: love it. real promising things there. we continue to see 100 or 200 drugs in the pipeline for cancer right now. >> yeah. they're doing new thing. they found a new way to attack cancer cells which is neat. maria: i want to hear more about that, jack o

we've fallen behind europe, japan, even china.e can take an enormous amount of trucks off the road using the rail system. we need to be weatherizing homes all over this country. buildings as well. we have seen huge growth in solar, despite opposition's from republicans in congress. we need subsidized tax credits for sustainable energy. for my mind, saving this planet for our kids and grandchildren from extreme weather disturbances, is a huge priority. i would invest very heavily in transforming the energy system. senator sanders: -- javier: i would argue the point, but since you brought the pope in on your side of the issue. [laughter] so, on to race relations. let's talk about this. first, by the way, i want to commend you for your long-standing proven track record and the work you have done on promoting civil rights and equality. like you, the ushcc believes in fair treatment and equal opportunities in all communities. that said, given the recent protest, as well as the criticism you have received for your response to those prot

we're still constructive on the u.s., europe, japan. there are far better places to have your money here. you could see a situation where the market collects itself and moves higher. but once again, energy underperforms on a relative basis and even within energy the integrateds underperform energy. so once again, this is a place to avoid. don't fall in love with those big dividends. that could be a trap. >> rich, thank you. rich ross, evercore isi. what would you do here? >> i agree that exxon is broken. we talked about that. people have been trying to pick bottoms in terms of valuation. it has not worked. clearly it made a four-year low today. $70 rich pointed out. that was the low we bounced off from in 2011. i think it goes there. i don't know what an 8% move lower in exxon means for crude oil, but i do think it means lower. the refiners didn't trade well today. i still think there are tail winds there. and you have to mention freeport-mcmoran below ten bucks. i mentioned it. there's an energy component there. >> two years ago they w

. >> we have a great number of people from europe and japan, australia, for all over the world that come here. we want to give them the new york experience and new york flavors. >> reporter: you can get everything from a hotdog to a sandwich to prime rib. chef sandoval's restaurant maya occupies a spot inside the village. he created a fish taco to celebrate the flavors of mexico. >> the fish taco, it's fresh fish marinated in adobo, chili, spices, herbs, with chipotle slaw. >> if you're walking around, you want something fresh. it's warm outside. and something easy to handle. >> reporter: the japanese chef calls sushi the perfect tennis bite. >> i got a lot that attends. this is the serena williams. this is spicy mayo. >> reporter: while people spend two to three hours at the event, at the u.s. open, the average person spends six to seven. that's a long time to go without a tasty nosh. no matter what you have a craving for, you'll find it here. it's a culinary grand slam. ernie: what a fun time. 60 concessions? >> 60 different opportunities to get different kinds of food. if you want a m

companies in europe and japan are already making inroads in this market. now south korea is looking for a slice of the action. nhk world's kim janju has more. >> reporter: the forecasts are hard for any business to ignore. the global halal market is expected to reach $8 trillion by 2030. at south korea's first ever halal trade fair, companies were pitching kimchi, noodles and more. definitely no pork or alcohol and all prepared according to islamic law. a slumping economy -- business owners have begun testing the muslim market for new opportunities. but there is much to learn. expo partic pants got a briefing on halal requirements. they differ from country to country. >> translator: winning halal certification is not easy but muslims could make up nearly 30% of the global population so it would be great if we could tap this market. >> reporter: more and more muslim women are showing an interest in south korean cosmetic brands. this moisturizing lotion is certified halal. it contains no alcohol or animal derived collagen. this company has spent the past ten

your head as to whether or not what worked for the fed is working right now for japan and europe. tai: in the case of japan, qa has -- qe has worked to inflate the price is but done little to drive the economy. in europe it is more successful. it made the euro weaker which is giving more breathing space and lending growth in europe has been revived. quality review at the end of last year where the banks from more comfortable about lending, all of this together has helped improve the liquidity flow within the european system. angie: the 800 pound gorilla in the room, china. let's get to that. in 20 minutes from now, we will join you. rishaad: what struck a on the stories, the malaysian prime minister standing firm -- let's check up on stories, the malaysian prime minister standing firm after protests. allegations of corruption and mismanagement. supporters say that the rallies have failed because they did not draw up ethnic malays. the japanese production fell in july, down 1% from june. economists are exciting a .1% rise. the economy struggling to recover from a contraction. stocks

the interesting thing there, europe and japan are weak. they are in stimulus measures, mindsets. going to last in their strength versus the one? the yuan? fundamentally, we would argue that does not make sense. >> in this context of a gradual devaluation, who are the winners and losers? tim: you have to think about chinese companies. clearly the knee-jerk reaction is exporters win. translate a stronger currency back. they can have better competitive positioning. it is not all chinese companies. it istomotive sector, chinese auto parts that might win. auto companies may not. some of the manufacturers like beijing auto actually import parts from germany because of the relationship with bmw. there they use. -- loose. facel companies competition. we have done a lot of digging. if you go to be i china, you we did looking through industries. shery: a complex situation going on with the devaluation of the yuan. makes --e u.s. dollar following the devaluation. it becomes more expensive to import for other currency holders. the impact on the domestic prices would be mixed. it may be both

in turmoil in mid-september they would not. .hat would be the response alix: what about europe, what about japan? are in waitul: they and see mode. the pboc is in the middle of the conventional easing cycle. with bettert up configuration a few months ago they are somewhat behind the curve. if you are looking for the central bank to play the role of alan greenspan in 1998, they are right in the middle of what is going on right now. joe: in the u.s. we have seen some divergent sectors in energy. from the perspective of a u.s. investor, are there any areas that you like that of that others? : material upside versus expectations. i think people have accepted that it did not fall apart a year-and-a-half ago. they're just beginning to adjust the idea that we may have a second leg of the melting market here. -- housing market here. turin, then it really gets quite interesting. the question a few months ago was with would be turned take place? certainly you had a couple months of good homebuilder confidence, which at the very least suggests that the homebuilders themselves see a material pickup in deman

we have the marxist terrorist groups in latin america, europe, japan. yemen and libya became centers of training and orientation where marxist militants of different nationalities learned tradecraft from the kgb come these germans and from each other. then we had the afghanistan situation i guess we will call at which spawned al qaeda and other global jihadist movements. training was done by the cia and pakistan's intelligence director in particular and of course we had some of us remember the innocent days of the red brigades group, the children of the bourgeoisie. that period reduced traditional u.s. government ct policy. it would bring terrorists to justice isolate state sponsors of terrorism improved allies counterterrorism capability and retrospect to hostages sessions, no deals. after 9/11, that policy was somewhat expanded with the global war on terrorism much more aggressive policy, at least rhetorically and especially more and were -- and the military. and then we had afghanistan, iraq followed idea that states patriot act, the creation of the

easing inantitative europe and japan. of theaid should we be holes, and particularly within the bond market? >> particularly so. we have a pending removal. thee merely substitute structure of equity prices, the we have the price of bonds, and the status expected equity return we have affected interest rate return. is anrice earnings ratio unstablenarily position. and what will ultimately determine where does is to reach back and ask ourselves where is the normal interest rate? one of the things that occurred to me as a consequence of the 2008 crisis, i knew something thegrowing, but i missed actual date, as did everybody else in something very fundamentally different was going on. i went back and look at what my premises were about the way the system worked. i found that there was very little significant problems that behavioral economics is really covering. this particular question is a behavioral issue. >> let's bring this morning. talk about the risk-free rate. does alan greenspan, or stanley fischer, or warren buffett

is the problem misallocation of resources, not the competitiveness like europe or japan.t is really about the government mismanaging the economy. rishaad: i would argue that they are not mismanaging it. that this is going to happen. you have this painful transition -- >> yeah. rishaad: and you're already seeing it now that the manufacturing side of the economy is smaller. because the labor force is drinking. even though the economy is weak, the real wage level is still supported. a lot of the high-value added in the service sector is tied up in cycles. i don't see anything going on there. rishaad: what do you see? you have been writing about this for a while. landing is therd concept of bankruptcy. is very, bankruptcy difficult to happen. the banks often sit down with local governments. that's why we see ppi always negative. if somebody is not making money, it keeps going. landing is a good thing but a soft landing is a bad thing. a hard landing would force them to change. hard landing means that you are changing. in the short-term, you are not seeing that. when you see a

we had the monday modern, the marxist terrorist groups in latin america, europe, japan. centers of training and orientation where marxist militants learned trade craft from the kgb, the east germans and from each other. then we had the afghanistan situation, i guess we'll call it, which spawned al-qaeda and other global jihadist movements where training was done by the cia and pakistan's intelligence director in particular. and, of course, we have, some of us remember now it seems like the innocent days, of the red brigades group, the children of the bourgeoisie. that produced government policy. we bring terrorists to justice, isolate state sponsors of terrorism, improve allies' counterterrorism capability, and with respect to hostages, no concessions, no deals. after 9/11 that policy was somewhat expanded with the global war on terrorism, a much more aggressive policy at least rhetorically, and especially more of a role for the military. a hard line for others, you're with us or against us. and then we got afghanistan, iraq, followed by the united states' patriot act, c

our rail system lags behind europe, japan, and china. we could take an enormous amount trucks off the road by having a modern rail system. we also need to be revitalizing homes. we have seen a huge opposition to solar by republicans in congress. we need to subsidize tax credits for sustainable energy. sitting this planet for our kids and grandchildren, preventing extreme weather disturbances, is a huge priority. i would invest heavily in transforming our energy system. mr. palomarez: i would argue the point that since you brought in the pope on your side of the issue. on to race relations. let's talk about this. by the way, i want to commend you for your long-standing track record. and the work you have done in promoting civil rights for decades. and, like you, the ushcc believes in the inclusion and commitment of all communities but with that said, given the recent protests that transpired at the convention, as well as the criticism you received or your response to those protests, can you talk to us about this troubling and persistent p

europe? what about japan? michael: they had ammunition. in both cases they have used a lot and they are in wait and see mode. the pboc is in the middle of the bench a monetary easing cycle. having caught up with their deterioration a few months ago they have fallen somewhat behind the curve. if you are looking for the central bank to play the role of alan greenspan in 1998, they are the obvious one to look at. they are right in the middle of what is going on right now. joe: in the u.s. we have seen some divergence among sectors and energy. from the perspective of a u.s. investor, are there any areas that you like that of that others? michael: one part of the domestic economy is material upside versus expectations. housing. i think people have accepted that it did not fall apart a year-and-a-half ago. they're just beginning to adjust the idea that we may have a second leg of a new housing market here. is one part of the economy that is still in a deep recession. if you make the turn then it , really gets quite interesting. the question a fe

your long-term allocations are, i think you do want to look overseas if you haven't had a lot of europe or japanxposure. is stronger policy than what we see in the u.s. and can provide a buffer on the downside as we go through a bumpy ride the next quarter. scarlet: the shanghai composite index has seen a bumpy ride with sellers. what will you look to to get any kind of indication of whether fund managers are in a bid to raise cash in order to meet redemptions? alix: we see quite a bit coming out of hedge funds. >> is interesting to see over the last year to date, we have seen money flow out of u.s. equity mutual funds. but it has flown into international funds. we may continue to see that shift as funds liquidate assets in the u.s. but increasingly i buying overseas. -- are buying overseas. rsthink it is one that bea watching and could continue to put pressure and volatility in the u.s. market. marketbout 36% of participants think the fed will hike in september. when you see emerging-market currencies falling off the cliff, do you think that changes the game for the feds? >> the market moves ar

higher allocation into international developed markets despite all the events in china, europe, japanve done very well to date. i think some of the recent weakness in high yield has created relative value in that space. that's another place for investors to be looking. and if you do believe the u.s. economy is going to be stronger in the back half of the year, then i think, no, you don't look at the defensives, some of the more cyclical parts of the market that are both cheaper and likely to be more resilient with a tightening fed. >> couple of contrarian ideas, russ, thanks for joining us with an update. appreciate it. >> all right. 19 minutes left in the trading session here after all is said and done, we're virtually neutral right now on the dow jones industrial average. and like matt said, if you'd been out all day and coming back, you're going to look at that and say, oh -- >> not much happened. you'd be wrong, crude oil and energy stocks have been taking their lumps of late. but this downturn created a big opportunity with investors and we'll share it with you next. i take prilo

trade will be slow across not just europe, but also japan. stimulus will be fruitless.orrowing costs will increase. exports and stocks will be heavily affected as well. and inflation is another factor to consider. a lot of repercussions to think about. ben: certainly global effects and not just regional. thank you very much or the analysis from singapore. singapore. back to sarah. a wish come true. sarah: if you've got went to make, tonight could be the time to do it. the night sky will be full of shooting stars. our science correspondent has more. >> the observatory in the heart of berlin, it is almost 11 p.m.. -- 11:00 p.m. young astronomers are filled with anticipation, waiting to see the young perseid meteor shower. astronomers at this observatory wanted the next generation to be here, so they turned on the heart -- turned on the hike. they know shooting stars are famous for good luck. >> on earth when you have a candle, you cut off the excess weight so it is not covered in such -- soot. people thought that when the angels trim the stars, bits fell to the earth as s

trade will be slow across not just europe, but also japan. stimulus will be fruitless.orrowing costs will increase. exports and stocks will be heavily affected as well. and inflation is another factor to consider. a lot of repercussions to think about. ben: certainly global effects and not just regional. thank you very much or the analysis from singapore. singapore. back to sarah. a wish come true. sarah: if you've got went to make, tonight could be the time to do it. the night sky will be full of shooting stars. our science correspondent has more. >> the observatory in the heart of berlin, it is almost 11 p.m.. -- 11:00 p.m. young astronomers are filled with anticipation, waiting to see the young perseid meteor shower. astronomers at this observatory wanted the next generation to be here, so they turned on the heart -- turned on the hike. they know shooting stars are famous for good luck. >> on earth when you have a candle, you cut off the excess weight so it is not covered in such -- soot. people thought that when the angels trim the stars, bits fell to the earth as s

we have quantitative easing in europe and japan now in force. however it should we be of bubbles -- how afraid should we be of bubbles, particularly in the bond market? very much so. i think we have a pending bond market bubble. if we merely substitute the structure of equity prices and we have the price of bonds, and instead of expecting equity return, we have expected interest rate returns, that price ratio is extraordinarily unstable position. and what ultimately will determine where it goes is to reach back and ask ourselves where's the normal interest rate ? tom: why do we see commodities implode and what is a signal for america? fundamentally what is created a problem in oil .s u.s. production we have added one million barrels a day since the last three years, because of our fracking. extraordinary insights. it is showing no signs yet of pulling back, despite the issue of much lower oil prices. what this is telling us is they are getting the costs down lower and lower, and we will have continued crude oil decline. was, again, dr. alan gree

japan struggling, europe almost inflation, china at a wholesale price level is deflating nor rapidly than japan. a slow down in china is not good, it damages the ability for companies to make profits around the world. >> let's play it out. not everyone, and you may not realise why deflation is bad, prices are not going up. why is it a bad thing. it's a bad thing. they don't invest, they don't expand or higher. everything grinds to a stop. china is a sample. >> consumers sit back and say why do i buy today, i'll by more tomorrow. so consumers don't add to it, and you wind up in an historic stob in economy. we have to grow a population. it's a capacity of workers. it's creating jobs. we have started to see wages moving up. we have wage inequality situation. if we don't deal with the workers. wages go up. i'm not sure we are seeing wages going up. what we are seeing is a concentration of ways going up in certain industries. not in a broad spectrum of industries. we have a deeper problem. it's a low level. prior to world war ii. these problems are significant. they are deep. and what happ

maniac collectors in europe and japan. >> if i had known back then, i guess we would still be over theres is an island, isn't it? it is kind of an island. >> i think it's worse than an island. ♪ darling i'm willing to forget about our past ♪ ♪ darling i'm able to make our love last ♪ ♪ i'm a one man's woman and i'm willing and able to be loved ♪ ♪ oh yes i am yeah yeah yeah >>> another day, another country. miami is like that. you can eat your way across the caribbean and through all of latin america and then over to africa, if you'd like. it's all there. the plaza is venezuelan. if you know anything about me, you know i love few things more than big, new, unusual, comes from somewhere else, mutant versions of the giant hamburger and this one, this one is something special. >> this is the deal. this is all venezuelan, which means everything is protein on protein on protein and it is all about the sauces. we're going to do this. absolutely, right? okay. >> what is this neighborhood? >> what is this neighborhood? ncer ] andrew. rita. sandy. ♪ meet chris jackie joe. minor damage, or major d

due to the lower tourist spending and tourists were apparently spending in europe and japan.tively. but again, u.s. is the big market there. separately, after the bell yesterday, pvh corp. turning in a quarter that surprised the street to the upside. beat on earnings and revenue. ceo pointing to strength in the calvin klein merchandise, particularly the underwear. i guess the ads are working. lower traffic in key tourist stores. pvh expects headwinds to continue and held up pretty well for the quarter. william-sonoma slight beat on revenue and the weak quarter outlook dragging down shares. hardest hit in the wake of the west coast port disruption and that pain continues. the ceo says it incured further supply chain costs to restore the inventory levels. the big pieces of furniture they had to move and got stuck in the west coast ports so it was a big pain for them and still obviously dragging on the results. >> for tiffany, they have overseas business worth less brought back in the local currency and then shoppers at the u.s. store are tourists and they're just not spending a

you know, europe, japan and the united states are not doing badly but it's risky politically. this is a moment, really, that's been coming for 15 years. the big china slow down. and if it comes, it's going to be really dramatic. i think if it happens, the hard lining in china, we haven't seen the worst of it but it's a better chance of 50/50 that's it's not going to happen. it will calm down. >> i'm wondering, this is all interlaced and connected 100% but i keep hearing experts on today saying there has been a bullish market and this correction was overdue. what does that mean? >> well, what it means is that nobody has any idea quite what it should be. >> professor, i expect you to have all of my answers. >> well, yeah. and so a lot of american firms get profits from abroad so you see a slow down in china. you know, it ricochets all over. but i think it also means some sense of fear in the market. that it could get much worse. the other shoe could drop. i think even in the worst case, americans will be relatively insulated. it will hurt but i don't think it's going to turn int

meaningful qe-like type easing in china that's going to follow to the same extent we've seen in europe and japan rekently? >> whenever the central banks say it's a one off move it's almost never a one off move. the market clearly wants to see the yuan lower. they're going to try to obviously manage it in an orderly fashion but i do not think this is the final low that you've seen so far. i think we're going to go lower as we go forward. >> it's seema, good morning to you. should currency devaluations be seen as a desperate move by beijing to stimulate it's economy and it's exports or perhaps this was a sensible move because the moves we have been taking so far haven't really helped the economy. >> well, they needed adjust lt and clearly because the economy was slowing and the yuan was overvalued. they're acting very reactively at this point. they were caught off guard because it didn't anticipate the economy to slow down this much. there's been so much investment in the chinese economy that finally the case they have been making the last three or four years may finally be coming true and a lot o

: you have europe -- portfolio,% of my divergences central-bank policy, you still have qe in europe and japanrope is just cheaper. the u.s. is doing on the heavy lifting in terms of the economy -- it's the only engine firing at the moment. patrick: more important than -- it is a crazy multiple for the s&p 500 and you can't have a premium if that is raising interest rates. i think that will create a stronger dollar, and you are getting much better valuation. caroline: we will be asking you where to go in europe next. us.ick stays with guy: pebble beach, california's famous dog course this week is swamped with drivers of a different kind. we are talking about fast, exotic cars. one british car company is looking to make a big splash. has just's bac expanded into the u.s. and sees a big market. i'm not in california, as you can probably tell -- instead, i got to go to sunny north wales. the surprising thing was i wasn't disappointed. if the beginning of june -- we are in north wales. there is a severe weather warning, which is perfect, because we are here to drive this. the bac mono, the car wit

more monies go from europe into japan which heidi pointed out is the cheapest market we've gotten in t now. >> i'm still going with liquidity, not going with it. europe is where they're scrambling to get out. >> let's look at the guys in the control room if we could. we've been making a big deal about the fact that wti had gone below 41 a barrel for the first time since march of 2009 of the oil majors and so many other things selling off as a result of that chart which i know my friends at power are going to talk about right now. >> we certainly are, scott. thank you very much. tyler mathisen here. we're about one hour away from those fed minutes that scott and the gang were just talking about. they could provide a pretty good him at whether we'll see a rate hike at the next meeting. that next meeting set for september 17th about one month from now. the fed, however, taking a back seat today for the big selloff. sara eisen is covering it with bob pisani. >> investore

japan is aiming for 25%. europe, 40%. canada, often compared to australia, 30% by 2030.%-20 8% australia looks comparable to the rest of the world but if you take the u.s., it is the same number, 26%-20 8%, but five years earlier. the u.s. would be reducing by much more than australia is proposing, around 40%. if these figures are to be believed, that this is the number the cap that will come out with, it looks like australia -- the number the cabinet will come out with, it looks like australia again is dragging the chains. angie: is there likely to be any division in the ranks? paul: again, if the leaks are to believed, yes. some senior cabinet ministers wanted a far more aggressive target. hand, you have some benches who are in the climate change denial camp who see no need for rules that all. tony abbott is one of those. changedescribed climate as "crap," but then going on to say he believes in the science. the policies in australia when it comes to the missions, they are less about climate science and more about political science. angie: [laughter] indeed. thank you

look, the real key positive in local currencies, very good sales in europe and in japan. solid sales in china and the u.s. is holding up okay. >> the chief financial officer reminded investors that when it comes to china, quote, it's not possible to quantify the positive wealth effect from a rising stock market on our sales growth. it's similarly difficult to predict any potential negative effect on sales in magnitude or duration from the recent correction or currency devaluation. the high end jeweler says that it remains focused on serving chinese consumers around the world and it's not altering the strategies in any way. for "nightly business report," i'm courtney reagan. >>> a number of other retailers reported earnings today. dollar general reported a rise in second quarter profits as people flocked to the discounter for bargains. off price retailer burlington stores topped for both revenue and earns an raised the -- earnings and raised the full year outlook and michael's posted earnings guidance for the year. the ceo attributed the strong sales in part for the partne