The chinese want their stock market to look good before they celebrate the defeat of the japanese in world war ii. More for that in a moment. Stocks in europe rising as well this morning. Up 2. 4 . And europe a poll released this morning could add one more reason for joe biden as he considers a run for the white house. Bidenrvey shows that pulls better nationally against the top three republican candidates than Hillary Clinton does. At the poll shows biden has a higher favorability rate and then clinton or bernie sanders. Republican candidate donald trump says he has plenty of enemies in the hedge fund crowd. One of his proposals on taxes. As to do with carried interest much of that money is taxed at a lower Capital Gains rate. Trump was asked about carried interest. Do you want to tax carried interest in the same way . I would take carried interest out and let people that are making hundreds of millions of dollars a year pay some tax because right now they are paying very little tax and i think it is outrageous. Erik trump says he wants to cut taxes for the middle class. Youkraine creditors are taking a haircut. Both sides have agreed to a structuring deal that includes a 27 breakdown to the face value of about 18 billion of euro bonds. Of the redemption date will be pushed back by four years. Ukraines economy has been devastated by fighting with prorussian separatists in the east. Mourners turned out for a vigil in honor of two television station employees. The killer was a former reporter of the station hood previously been fired. He killed himself after a police chase. President obama is in new orleans to celebrate the citys come back from hurricane katrina. This saturday marks 10 years since the hurricane made landfall in louisiana. The president is scheduled to speak in new orleans lower ninth ward. That is coming in 5 00 p. M. Eastern time. David guerette is in new orleans. What is the president going to find when he shows up . David this is president obamas night trip to new orleans. He was last year for the fifth anniversary. Im standing in front of the Community Center opened rather recently. This was a neighborhood that was devastated. The president wants to look forward to the degree which new orleans has rebuilt. That is something i talked to mayor Mitch Landrieu about. It is something he attributes to the coming together of parties in new orleans. Nothing in the city of new orleans that is going well has been done without the partnership of the federal, state and local governments in partnership with the foundation, the notforprofits and the citizens. It has been a complete team approach. Health care, education, criminal justice, that kind of approach has produced a much better result. The new new orleans way. David that is a phrase ive heard time it again. The mayor coming up with a trademark phrase looking at a new city in the wake of hurricane katrina. A lot of people refer to this as a laboratory for new ways of running a city and what a city can be. Erik many Success Stories in new orleans. The president will see evidence that the reconstruction still continues in new orleans. David absolutely. The federal government sent out sent about 71 billion so far. I had the chance to tour a new hospital in new orleans. People are very proud to have a Teaching Hospital open again 10 years after katrina hit. Erik thank you very much. David gura is on the ground. Tune in at five clock p. M. Eastern time. At 5 00 p. M. Eastern time. This is the point of the show will be get you started with the five things you need to know. Julie hyman is back to help me kick things off. I dont see anywhere else to begin but with the comments yesterday by bill dudley. We will be hearing from a lot of fed speakers over the next couple of days thanks to the kansas city said jackson hole conference. Dudley talked about when the fed might raise Interest Rates. From my perspective, at this moment, the decision to begin the normalization process at the fomc meeting seems less compelling than it was a few weeks ago. Normalization could become more compelling by the time of the meeting. Julie there was a lot of hedging. That, theyay from will not raise rates in september. The other takeaway seems to be, stocks rose on that. I have an intraday chart of the s p 500 yesterday. Around here is where he made his comments. Lows of the session after he made those comments. It was around 12 45 that they bottomed out and started going up again. Can you attribute the comments to dudley directly . The timing does not seem to work. Erik it formed part of what traders and investors are factoring in. Julie on a day like that people are looking for an excuse to buy. After all the selling. They found one. Erik they appear to be finding another today. Ulie china overnight, china was able to stem a 5 trillion route in its markets. Fails, you just go into the market and buy. Is that what the Chinese Government has been doing . Conflicting signals on chinas economy. After watching stocks have their worst twoday selloff since 1996, the government has been forced to start buying shares again. It tells us two things. This market has not found a bottom yet and the selloff could have a way to go. The government is sensitive to what happened because they want to make sure the market is on a stable footing ahead of a military commemoration next week. It has forced the government to come back in. To Global Investors in ascending confused messages. If the idea is to avoid embarrassment, Everybody Knows thats what they are doing. How does that avoid embarrassment . Nda welcome to china earlier in the week they were saying is staying out of the market because they were debating whether there was point in trying to prop up stocks anymore. There was a view among some that ultimately what is happening in the stock market is not necessarily going to hurt the real economy because of the small investor base. The optics have forced the government to get back in and make sure there is a floor on prices and theyre not going into next weeks memory should with a big selloff. Erik thank you for staying up late with us. Ari fortime, for errari considering appointing its chairman and ceo. This is according to people familiar with the matter. Fiat chrysler selling a 10 errari. N fo it sounds like markey only bash chionne doesmarke not have a lot to do already. The guy gets three hours of sleep a night so when you are up for 24 hours i guess you can run another company. Julie he has been trying to shop around Fiat Chrysler or find partnerships. Erik he believes they need consolidation among automakers but there that only the niche will survive. In the creditves card business. Fidelity investments may replace American Express as it credit card partner. It may drop bank of america. Fidelity will try to find new partners. It is said to be in talks with visa and mastercard. Another blow for amax after losing cosco and jetblue. They need to figure out a new strategy. It appears retailer after retailer, company after company, realized that customers want access. Better access through visa. Produces been known to so many phonies. Designer purses, movies. Now there is a fake chinese wall street right. Goldman sachs Leasing Company right across the border from hong kong in mainland china. The company has the same chinese characters as the real Goldman Sachs. Shenzhen financial Leasing Company. Goldman has very little power in mainland china. Not much the company can do to change this. Apple runs into this all the time. Julie hopefully customers realize it is not the same Goldman Sachs. You do not look too confident. Erik gdp data and jobless claims will be released. These are important data that could have an impact on the feds decision to raise rates or not on september 17. Carl riccadonna is here to give us his sense of how the second reading on secondquarter gdp and these initial jobs carl i think the numbers are a little less relevant. The focus on gdp. A lot of folks will say this is old news, nothing really to say. It is going to be a fairly substantial upward revision. Going from two and a quarter of 23 and a quarter. Gdp. Econd print on with this, we will get the first look at economy wide corporate profit. That is new information that is potentially relevant. We had corporate profits on a National Basis contract in q4. We have to see what happens in q2. The economy is performing better so we should get a modest gain but if we see another quarter of slumping corporate profits that is bad news for the private sector because corporate profits drive decisionmaking like investment and hiring. The pace of hiring has held up relatively well, averaging about 200,000 per month. If profits continue to slump that will auger for a slowdown in hiring later this year. We see weakness in the labor market, all bets are off for the fed. Julie what is your prediction . Carl i think we will get a flat to modest positive so we should see corporate profits are if option of economic activity. You should see profits respond in kind. Faster gdp growth for the Second Quarter also impacts fed outlook. There is a correlation between gdp growth and the temperature in the economy or inflation rate. Gdp is reacts elevating. You should see gdp is reaccelerating. Erik key data coming in at 8 30 this morning. Coming up, what the markets look like in a post doddfrank world. The volatility around mondays selloff. We will be speaking with the ceo of one of the largest institutional trading networks. We had to jackson hole were policymakers are meeting for an interview. Erik you are watching Market Makers. What does the market look like in a post doddfrank world . Point gary volatility may that volatility may point to a new normal. Seth merrin may know a thing or two. Good morning. I wants to get to that question but first, im looking at the way futures are trading this morning. The market ended up 619 points yesterday. Has a floor been put in under stock prices . Seth so many macro events can change on a dime as we have seen in china with the recent intervention. This is a stock pickers market. What we saw in terms of the Market Structure, in terms of the new normal, we have this massive amount of money that has come into etfs and they are all concentrated on primarily the same stocks so when people start panicking and selling, you are selling the same stocks which exacerbates the markets. Our members are 800 of the largest Asset Managers in the world. They sat out when the market was down 1000 points. They said, erik that 25 minute window on monday. Seth the and then they started coming in and what we see, in our market, there has to be a buyer and seller. There are those folks that have to sell. They found refuge because we dont have any hft. They came into the pool and there are some folks that sold but some folks, the same number of players on the buy side looked at this as a great buying opportunity. A lot of those people were right looking at yesterdays market. Erik neither were they buying nor were they selling. Seth during the first half hour, the drop of 1000, they sat on the sidelines. Erik that says something important. Yes they were not seizing the opportunity to catch the falling knife but at the same time those institutions that use your network were not selling. Seth i think that is what you pay those active managers for. What is more interesting this is a global story. We saw 170 surge in our cross european to United States trading as well. That is interesting because erik arbitrage opportunities. Seth i think they have a five hour at start headstart. They had enough time to breathe, talk to Portfolio Managers and say, what should we do. I think a lot of those guys took advantage of the drop in the United States in a more seasoned , patient way. Normal this the new in a world where we are post crisis, post doddfrank. Etfs did not really exist before the financial crisis, certainly not the way they do do now. Seth we have seen 150 150 billion come into etfs this year alone. When you are trading in etf, that is a concentrated group of stocks. Most of them are on the s p 500. When people are buying and mass, the s p 500, yet the buy although stocks. When they sell, they are selling those 500 stocks. Those of the folks forcing the market down. Erik im wondering whether now when there is an excuse to sell or perhaps an excuse to buy, reason to buy, the price swings are going to be more extreme and violent just because of the way the market is structured. Seth that is correct. The reasons for that, the huge concentration in these securities. On top of that, when you have this kind of volatility, this is where highfrequency traders play. They exacerbate those price swings. The great thing about liquidnet, we are hft free. This is a safe zone for these guys to be able to buy and sell. Orders are so large that individually they can move the market themselves. In our market, we temper that. Erik thank you so much. Seth merrin. We are back after this break. Erik the Federal Reserve might not be raising rates next month after all. That is one read on comments from bill dudley who spoke yesterday at an address in new york city. This is different from the financial crisis. The crisis was very much about us, subprime mortgage lending, securitization of securities that turned out to be highly toxic. This is not about us. This is about development abroad. Erik here with me this morning, bob michele. Is there are differences of opinion as to what bill dudley intended to convey yesterday. What was your take away . Bob i took away that they may or may not raise rates in three weeks time. I think they should. I think if you look at the u. S. Economy, it looks fine. Well see gdp in a few minutes. They have the cover to do it. If they are going to worry about whats going on internationally, and they are. How do you know youre not going to get those bursts every so often the next time you do think you may want to raise rates . Erik of what use is it for Market Participants to have bill dudley give a this but that address where he says, the likelihood effectively feels lower now but things could change between now and then. There is important data that may help guide the fed in one direction or the other. Bob he is trying to calm the markets. Erik did it work . Bob it looks like it worked. I think it is debatable whether the markets were already recovering before he got on or not. He did not want to say anything which was going to cause i further selloff. It is open mouth operations. It must have helped somehow to help stabilize the markets. I think the chinese policymakers did more. Erik why with all the stocksity and drops in that we saw on friday and monday and late on tuesday, have we not seen similar price action in the fixed income market . Bob the fixed income market feels a bit tired right now. It has gone through a long rally. Everyone had their sites set on the fed beginning the normalization process in a few weeks. You did have a bit of a rally leading into the decline and equity market. You had already pulled the 10 year close to 2 and the 30 year down around 3 . On top of that you have a tremendous amount of corporate issuance. We were aghast at the amount of issuance we were seeing after july 4, headed into labor day. It is on a record pace. The weight of that hundreds of billions of dollars of new Corporate Bond issuance adds supply, duration to the market. Erik there are reports of the last couple of days of chinese having sold a lot of treasuries, in part of because of in part because of what is going on with their stock market. Do you buy that as a reason treasuries yields did not drop more . Bob that is some other reason. They have 3. 7 trillion in reserves roughly. A lot of it was accumulated in the last several years to offset the qe in the u. S. This is an opportunity for them to bring back some capital as they are seeing capital outflows. They are experiencing the cumulation. Isme, the bigger issue looking at all of the policy levers the chinese have to pull. For a long time, everyone was comfortable with them. If they reduced their reserve ratio requirement, that is good. If the pboc cuts the central bank rate, that is good. If they buy equities, thats good. When they try to deal value the currency, that is bad. The market is friendly to things that expand the liquidity base and reserve base globally and things that are focused purely on the chinese economy, not so firmly to capital markets. We are counting down forget important economic data. The second read on secondquarter gdp just came in. Once take it to vonnie quinn with more details. Vonnie Carl Riccadonna hit it on the head. 3. 7 is the revision to secondquarter gdp. 3. 2 mists were looking for. That was a big up from the big reading from the first 3. 7 ng which was 2. 3 . Annualized gdp for the Second Quarter. If we look at some of the details, consumption came in on consensus at 3. 1 of again. If we look at the inflation data, core pc came in at 1. 8 and that was as economists were forecasting. Jobless claims as well. We didnt see a drop from last week by 6000 to 271,000 people claiming benefits. Futures higher and they are continuing to expand and in terms of treasuries, a little selling. All told, it is being received well in the markets. Erik lets return to the conversation with bob michele. These are very old data but they do tell us something. Bob it feels like bill dudley may have to have another press conference. I think the data looks pretty good. Going into the Third Quarter the u. S. Economy was fairly healthy. We looked at personal consumption expenditures quarter over quarter. 1. 8 is pretty solid. Corporate profits we were 2. 4 percent. P the u. S. Is in a good spot to begin the normalization process. How much the fomc is going to weigh in International Development in the markets, that is their decision. They should tolerably let that go for the time being. Probably let that go for the time being. Erik if the u. S. Economy is pote