i want to bring in our editor, mike regan who is also in studio with us. catalyst forat the the selloff is china, what are you hearing? manufacturing the data from china but also the week market there, the shanghai composite was down almost 5% at one point during the day. reported, the government comes in later in the session and tries to prop the market. all they could manage today was a drop of 1.2%. even with the government intervention, they are having a hard time keeping the stock market afloat. the other story is the volatility itself becomes a catholic -- catalyst for the market. tracy alloway has an interesting piece on bloomberg.com about risk-parity funds. as volatility picks up, these funds pull in their leverage. they have money they borrowed to buy assets. they pull back on that because volatility is higher than what they've modeled four. there is semi-automated trading that is reacting to signals in the market, not looking at fundamentals, not looking at eco-data or earnings outlooks. olivia: this is something i heard mike mckee speak with to

mike regan, thank you so much. ahead, airbus is gunning for boeing and it started with a new factory in alabama. we will take you there live with matt miller. ♪ olivia: airbus is spreading its wings into owings backyard. they just opened their first plant in the united states. it is expected to help the company cut costs and increase sales. matt miller is on site and you chance to talk to the president and ceo of airbus. take away. matt: you can see the gigantic airbus plane behind me. --s the most single successful aircraft in the world. even when they get to full production of almost 50 a month, they won't have enough production to satisfy demand. i asked about that and he said they may need to expand. so successful. we are close to 6% richer. we need to produce more faster. this will contribute to that. monthl reach about 50 a by 2000 17. then there is extra production and we will make a decision this year if we go up again. matt: where could you do that? where do you have room to produce that? oure continue to

joining us now with more, lisa abramowicz and mike regan. this statement came out yesterday. lower yesterday by the selloff was very orderly. we were down yesterday on the dow so why today? >> the fed statement comes out and there is always this spasm of trading that doesn't -- isn't indicative of where the market really wants to go after a statement like that. it's this statement of random moves up and down and you come in today and people have had time to digest it and read the research coming out and the reaction i have read today from investors that we called is basically that the focus on the international stuff in the statement really spooked people. they were hoping for a vote of confidence the u.s. had focus on bad and the the problems overseas has a lot of people spooked. quote from a great bank of america article today that said this was one of the worst things that that could've happened for high yields. there is a feeling that what does the fed see that we do not see? how that is the economy that they are so nervous and cannot raise interest rates by 25 basis poin

olivia: all right, thank you so much, mike regan and jurrien timmer.egyhe best question mark active or passive management? we debate that next on the bloomberg market day. ♪ alix: looking back to the bloomberg market day. it appears stocks have stabilized for now-ish. the dow is off the lows of the session. the real story that has led markets lower has been oil. it seemed to be in freefall over the last four or five hours, down over 7%. that was really waiting on the s&p energy sector. r ofust heard jurrien timme fidelity talking about that. there is a lot that needs to happen if the slide in oil is not a one order event and that will bleed into -- one quarter event in that will bleed into estimates. that is what you are seeing revisions. at top stories crossing the terminal at this hour. in kentucky at county clerk is to find the supreme court over same-sex marriages. kim davis is refusing to issue licenses for same-sex marriages despite a ruling from the high court last night. davis says she is acting "under god's authority." record for the video mus

michael regan is joining us, and kate moore from j.p. morgan private bank. mike: i would like to bring it back to the vxix. the volatility is becoming its own catalyst now. a lot of the focus is coming to these risk parity strategies, in an attempt to outfox your traditional 60-40 pension style investment, they create an ideal portfolio to reduce the sharpe ratio, and then they lever up on futures in stocks. tom: this gets to the heart of the matter. is the roulette wheel of the end of august and early september -- is that -- are we beholden to the hedge funds? are they the ones driving the cart? michael: not just hedge funds. tom: the market pros. michael: it is not identical strategies, but they are similar enough that it appears like a crowded trade -- with the volatility as low as it is people got complacent, and now volatility has whipped up, and they are pulling back the leverage to less volatile portfolios. that might be a temporary phenomenon. the question is, obviously the economic data globally is weakening as well, so it is unclear how much of the sell

mike regan, editor at large, and lisa brought marriage -- lisa bromridge.illar saying it will fire all these people, having problems finding stability in light of the mining problems. machinery sox owner ready -- mr. ernie stocks are at a two-year low. me is iat is amazing to think this issue with volkswagen is something that wouldn't necessarily rattled the market if it was doing well. obviously, it has been such a dense -- the whole market is on center folks these days. it doesn't take a black swan to rattle people. pigeons in this case can shake people up. not just with the autos, but with the biotech stocks and the renewed focus on drug rices. something in the past would not have brought the whole market down but is really rattling people today. lisa: that is a great point. yes, ok, we are having a scandal. are they going to go out of business? are people not going to buy volkswagen cars next year or in two years because of this? this is an aerated company. havehave bonds that dropped in some cases over the weekend. scarlet: is remarkable. there are a l

mike regan is back here with me in new york city and in london, mark barton is covering the picture.tant and what are people saying? mark: you said it. same old china. stocks over the last 12 months. .his is the headline the biggest in four years. since the china devaluation three weeks ago, the stoxx 600 shed 12% to you can see china, the big influence when it comes to european stock markets. i want to show you one stock industry. mining mining stocks are getting hammered. 5% decline for the basic resources index, the big dollar on the mining index is glencore. tradere, the commodities . that little red circle right there. three weeks ago today, china devalues one. glencore has sunk by 32%. inost one third of its value three weeks. that is astonishing. years,gest drop in two 26 doing euros of value. i want to show you something positive. unemployment actually fell in the last month to a three-year love to the data is not all do medical them here in europe. we ,ad mixed manufacturing data french manufacturing contracting in the last month. german manufacturing growing. this is an int

we were forced to bring in mike regan, supposedly here in 15 minutes. 1.1260.lar screen, please. chinese equities again, 4.6% off the 3% yesterday. call it seven percent or 8% yesterday. some good news, and it is called america. this is auto sales. we will see this later as we dash to september. this is the average length of car ownership in america. 71 months. i had no idea. up againstautifully that 17 million unit down. we have really come back nicely. news.s one of the good within the gloom of the markets and the volatility will be cars. vonnie: and you have labor day weekend to consider. tom: this morning it is ugly and it gives a summit to talk about in the final week of the summer. u.s. equities south, chinese equities less self. elga bartsch of global economics at morgan stanley, and extremes esteemed career. we will speak to her about ellen zentner's important call on american inflation. but first, a market that the fed cannot ignore. we cannot ignore michael regan. it never gets dull. the way i look at it, volatility has been trapped in this bottle all year, and someone

robert is the director of market strategist and bloomberg's own mike regan. tomorrow for live coverage of the federal reserve rate decision, a special report scheduled for 2:00 p.m. eastern followed by janet yellen's news conference at half past 2, 2 point -- 2:30 on bloomberg. matt: still ahead, hp wants to cut expenses right to billion dollars annually, so it is terming their payroll by 30,000 jobs. stay with us. ♪ pimm: this is the bloomberg "market day." -pimm fox. matt: with matt miller. we have breaking news. julie, we have been talking about the beer takeover. we get a response from miller. miller basically saying they are open to having these discussions. it does not sound like a formal offer has yet been made between the two companies, but it is said to be open to discussing this potential bid. they are said to have called the counterpart, so we are waiting for the next phase of the news if you will, because the formal offer has not yet been actually made, it is just a matter of these two companies potentially in talk. we do know that if and when the

mike tobin live in fox lake. >>> another horrible day on wall street as the market' wild ride continues. we'll go thrive trish regan in new york coming up. >>> first here's what some of our fox affiliates around the country are covering tonight. fox 2 in san francisco where the family of kate steinle who was killed on pier 14 two months ago is suing city and federal officials. the suspect undocumented mexican national juan francisco lopez sanchez, had been released from jail despite a request from immigration to detain him. fox 10 in phoenix with the cleanup from monday's night's monsoon. that storm left 50,000 utility customers without service as of this morning. there were no immediate reports of serious injuries or deaths. and this is a live look at atlanta from our affiliate, fox 5. the big story there tonight, a police officer and homeowner shot during a raid on the wrong house last night. officers investigating a possible burglary entered the home, took fire, then shot the family dog and the homeowner. the injured officer was likely shot by one of his colleagues. the investigation continues. that officer's in

regan joins with more. breakdown the past couple of days and more a longer-term issue. mike: that is a great way to do it. having a big effect on auto stocks. one of the suppliers is down 8%. ford and general motors down 2%. volkswagen is looking at a huge multibillion dollar fine. that is the biggest drop among the main 24 industry groups. aside from that, by your talk -- biotech week for another day after hillary clinton said she will take a look at pricing in the industry. that is another short-term issue. then we have longer-term issues plaguing out. obviously, talking a lot about commodities. the contagion of getting to be pretty acute. glencore dropping very big today. dropping below 125 pence. that's will stick people out. they raised equity. all of a sudden the new shares are losing money quickly. that makes you wonder if there are other minors in trouble that may have a tough time selling equity to fix the balance sheet. that is a big issue. petrobras reaching a 12 year low. the brazilian real reaching a record low. obviously that is part commodities and part brazil's own problem. they have somet