Soros relies on his analysis and you will see him at 9 00 this morning. Right now, a little more on what topeveloping and time for stories. A new poll shows that Bernie Sanders has narrowed the gap with Hillary Clinton in iowa. According to a poll, it shows sanders now 33 30 . He has picked up 25 percentage point since january. Sanders spoke about his growing momentum on cnn. Not only in iowa, or new hampshire, but in this country, we are generating enormous enthusiasm. People do not understand why the middleclass of this country is collapsing while the same time all the new income and wealth is going to the top 1 . Erik for the republicans, donald trump is out in front followed by dr. Ben carson, ted cruz, and scott walker. Present obama is getting closer to be no support for the iran nuclear deal. Senator merkley says he will support the deal. He needs three more votes to sustain the veto in killing the deal. The Obama Administration is close to making sanctions for hacking into computer networks. This concern sanctions that could trigger further online hacking attacks. That has the economy plunged to its lowest level since 2001. Gdp in the Worlds LargestCasino Market fell more than 26 . D on aall blame corruption crackdown in china. Gambling covers for fist of their economic output. Football, tom brady is back in court for the deflate gate case. Roger goodell is expected to be there in new york and a judge told them to settle both speed over tom bradys fourgame dispenser. If they cannot, the judge hopes to settle the matter by friday. In tennis, the u. S. Open begins today in new york city. Reassure up over will not be playing as she has withdrawn because of a leg injury. She was seated third in the u. S. Open. Those are your top stories at this hour. Let us get started with the toppings you need to know this morning. Guess who is here . Matt miller is here to help ke p kick things off you number 1 september rate hike is still on the table. That is the message from u. S. Policymakers. The remarks almost on question leak came from vice chair Stanley Fischer and he delivered with a direct quote with an inflation below, you can remove a commendation of a gradual pace yet, because Monetary Policy influences real activity with a substantial lag, we should not wait until inflation is back to 2 to begin tightening. More market turmoil than we have seen almost any point. We said mike mckee and Brendan Greeley out there to try to figure out whether this market turmoil and volatility would affect the feds decisionmaking process in september. And every single bed member that they interviewed said that they told not expect volatility affect their rate decisions. If they were going to raise, they are still going to raise. If they were not, they are still not going to. All signs point to yes, which means youre going to see more of a slider tension in markets. Slighter tension in markets. We were looking at 7 . We were looking for 7. 4 . The big economies around the. Orld are slowing even though 7 would be great for us, it is depressing for markets. Erik we are going to hear from Carl Riccadonna on the subject of a rate hike in a moment. Matt number 2 stocks in china following overnight, biggestthe twomonth slide since 2008. This as a regulator told brokerages to step up support or share prices. Edna covers china and hong kong. How does that not work . When the government tells you to do something in china, dont you damn well do it . Lastly, we know that chinese officials felt they should not be anymore. It was too expensive. It is the level of downward pressure on some prices here that they had to come into the market of a recent days did a lot of people point to this military collaboration in beijing this week. They do not want falling stop markets before that parade. The i feel i called signals from the government are definitely for sure. They want you to help the market rise. If they cannot do that, if the party cannot boost markets, why have faith in them to the able to do anything else, i asked the Chinese People . Erik china is about to celebrate the anniversary of japans lost the Second World War . Matt they are salivating their victory over japan in the Second World War. Whether or not you believe that is true. Enda, thank you for joining us from hong kong. Erik janet yellen is working on a system to fix bny mellon is pricing fix. Per this was on a Conference Call last night. Called new york mellon last night and some of the fix should be available or done by the end of day today in preparation for the market opening tomorrow. This glitch has been affecting bank of new york mellon, but it has been declining since the 24th of august 2 if you ask me, the bank has just given activists and other shareholders and other reason to demand the ouster of the ceo who is under a ton of pressure already. Matt for sure. What are the things i wonder and you know more about this stuff and i do do the mutual funds and etf need bny to do this before they know their Net Asset Value or can they figure that out themselves . Erik they do not have the inhouse expertise. They outsource it to the likes of eighth new york mellon, which , thern relies on sungard data provider just recently sold to provide the software. Bank of new york mellon and sungard happens grambling for a week already. If you were in the investor or client who relies on that pricing to make decisions about which traits youre going to make, in a week like the one we just lived through . Redone ive had to be corrected prices. Its disgraceful. Warnedumber 4 Buffetts Berkshire hathaway making its most Significant Energy investment. Is making a 4. 5 billion stake in phillips 66. It makes it the biggest shareholder in the u. S. Oil refiner and one with because name. Buffett sees the intersection of recordle prices and driving. We have seen forecast for Even Lower Oil prices. 32 from citigroup. They are the lowest of the big banks. Each about it with everybody pumping as much as they can hear with you do not know everybody pumping as much as they can here today. Erik i would not evaluate. It does not matter whether it is or buffett ons buying phillips 66 stop. Ck. Matt it doesnt even matter if he goes down to 32. Erik lets talk about alibaba. Hedge fund lovebird alibaba is dwindling. The stock price is down 33 this year. According to filings, hedge funds are boosting state in alibabas small arrival j. D. Com. And hedge funds in turn have cut their alibaba holdings. Matt im not sure it matters about the actual product. Morning andng this j. D. Com has more fashionable products on the homepage. I was seeing smart watches and phones a lot of fashionable clothing. I went on to alibaba and i saw veterinary syringes, horsehair, edible pigments i do not know what that is they are selling that a bull. I do not know with that is, but they are selling that in bold. As a consumer, i found little use for those things. Matt has little use for edible pigment and horsehair. Matt only once in a blue moon. Erik those are your top five things on this monday morning. Let us go back to jackson hole. It may have come and gone, but many are scrutinizing every word and every remark that came out at the feds annual retreat. Hoping to get some kind of a sensor whether or not be fed is going to move on september 17. For more, Carl Riccadonna is here. , basedsensus seems to be on the remarks of stan fischer and others that the fed is looking beyond the term what it feels september 17 more or less the same way it did a couple weeks ago. Carl what they say they feel and what they actually feel could be slightly different things. I think they are very attuned to what is happening in the Financial Markets in the potential negative feedback loops and the confidence affects from the equity markets just generally unsteady. They are worried about that feedback into the economy. They are saying to look at the big picture here with the u. S. Economy doing well, gdp looks good, employment landscape is fairly solid. As long as that holds up, we should be fine. We should be able to move away from a crisis era of Monetary Policy. However, they are certainly very finely tuned to that Feedback Mechanism from the Financial Markets. Ont the meeting is september 17. What data does the fed need . The the market matters because families who have money based onin the market those returns. Consumer confidence is affected negatively at the markets are down, etc. What they need to do is infer what the reaction is. It is not necessarily that is going to show up in a lot of hard data. For example, the new york fed president says the upcoming jobs report will be a little bit stale because the survey occurred before all these market annulments havent. I think people are looking at fridays jobs report for a holy grail for the september meeting. I do not think that is the case. We need to see if chinese stocks can stabilize. If they have not, the fed is not going to just take a leap of faith in september. They will say what is the rush. By a little more time and wait longer. We dont want to hike in thin markets like the volatility we saw in late august that make september a difficult time to raise rates. Erik furthermore, the labor economy is in pretty good shape. It would take a disastrous jobs report for the fed to get off of that. Below 150,000. Ay made even worse to throw them off the track. They just want to buy more time. If the volatility keeps up, theyre going to wait a little bit longer. The market stabilizes, and it certainly does not look like that based on today. Erik here is what the Interest Rate futures suggested this is the applied probability raised on the basis points. A week ago when we were in the midst of the market meltdown, it was down to 26 . Carl they are finally in tuned with how the fed thinks about things. During the market turmoil, use offense futures slip and start to clawback. October, to basically look for a rate increase between now and october, whether its september or october, it is very close to 50 . Continue to emphasize the story that october is a live meeting in the markets are discounting that am ignoring that message. I think they need to pay attention. Erik one quick point as we thatup after all craziness, there was 71 billion in m a here. Carl as markets move, there are buying opportunities. Erik , to donna, thank you. Matt, thank you so much. It is the last day of the month. Erik it is. Coming up, chinese growth a slowdown might not be bad for everybody. From the government next. Moments ago, india reported that its gdp expanded 7 in the previous year. The feds retreat in jackson hole was not the u. S. Policymakers and focus. Also in attendance were policymakers like the governor of the reserve bank of india. Mike mckee spoke with him and he is here now. That herth pointing out has had important words to say. Back in 2005 coming to one the world that financial risk was closing. It proved to be a very big morning. Alanel that was the year greenspan was retiring and everyone else was at jackson hole and how the well had gotten to be a much safer place for he was discussing the garden party. He did not come back until this year where he was received rather royally because he seems to be doing a good job in india from the numbers we are getting. We did ask about central bankers and whether or not they still control the leverage of power given what has been happening in markets. This is what he had to say. If our growthear would move faster. We have said that Central Banks have done what they could do. It is not a view universally held by central bankers. But i think in general across the world, Central Banks have done pretty much what theyre capable of. Now others have to step up. That an implicit criticism, even though i am sure he intended that way, of mario draghi in the bag is at hand . It is more criticism of fiscal authorities around the world who are not stepping up and filling in the gaps. Words, central bankers have done and continue to do whatever they can do. Is in a in his case, he different situation than others because he is trying to build inflation they are trying to build inflation, but he is trying to knock it down. Falling andces china, what is that due to the Indian Economy doing to the Indian Economy . Heres what he told us. We have imported a fair amount of chinese products. It chinas market grows more anticipated, we benefit hugely from lower market prices. It would be another benefit from historic chinese growth. Michael i asked what was the difference between being a College Professor and putting policies to practice . He says he loves it. I thought we should do this and i tried it and it worked or didnt work. Erik in what way does india when and china loses . Michael they are both doing quite well. It is not really a trade between the two. A are not exporting and manufacturing the same thing. They are not exporting and manufacturing the same thing. Erik thank you so much. President obama will be the first sitting president to visit the alaskan arctic. He plans to witness firsthand the affects of Climate Change. Will this trip translates a policy . We will talk to white house of deese afteran the break. Erik welcome back. Matt im matt miller. At features and focus. Last monday inge the fear gauge went dark for nearly 30 minutes as hundreds of billions of dollars were erased from equities. Last monday, american equities have rallied back 5 . Joining me to discuss the next move is filled struble. Riebel. Ip street rise to highs we have not seen since the financial crisis. What w we are around 24 or 25 . We have the dow down triple digits. We have the factory orders. Jobs report coming out on friday to all that will impact the fed. The key here was china last night. They came out and said that they were not going to continue to support their stocks. Gaugeense the fear skyrocketing upwards. It a lot of big anxiety out of traders who could if you no support from china, you will see the stock market pullback aggressively. Index, if we get backed up to the low 20s coming want to get some exposure and protection. Exposure anducing going from there. I think you want to belong on the volatility index right now. Even if we assume the fed is on track for a september increase, last week at jackson hole, most said members said they would not look at market volatility when making their decision. Whether you buy that or not, they were at least trying to hint to the market that they were planning on going forward. I still think it is on the table, but the reality is i do not see how they can possibly do it, especially with the gyrations we had to i think you have got to delay at least till december to stabilize and get concrete footing below the markets are now. There are too many gyrations in the market. Be long on have to volatility right now. The only problem with the volatility index is that if we see spike up slightly last week, it is hard to gauge resistant points and also spots where you want to take profits. It is not a stock that has been around 2030 years that you can look at. This is something that moves erratically on fear. 51 get an extreme level like and reduce exposure, but you have got to aggressively trail stocks on the product. Matt what about the issues last monday were a goes dark for a halfhour . This is clearly something only sophisticated investors or people who are willing to deal with a lot of risk should be exposed to. Phillip that proves some of the inefficiencies in the product. That is why i think that if you are going to look at protection coming might want to look at other products like the gold market. In my want a look at Treasury Bonds for reducing risk. Gold if youre going to play some volatility. And also the silver market. I think oil is also a plate if you get geopolitical risk and there are other commodities to get exposure. Slice of unique investors. Matt is this the most directly linked to volatility in the equity market . Phillip directly linked to the s p 500 for sure it is. You want to use proper Money Management when youre training. I would add some exposure above the 23, right at the 23 level. If we start dipping below 20. The only good thing is that if the markets slow down gyrations or start to level out, you will slowly a road it will not fall off a cliff. When you get involved in the market is making really erratic movements like a 1000 point move in a day, that is really where you shot up with the product. Exactly. It wont drop down like a led zeppelin. Philip, thank you for joining us. Erik matt, philip, thank you. Violence broke out between police and protesters outside the the cranium parliament. Ukrainian parliament. Lawmakers voted in favor of a controversial measure to give ine power to the regions eastern ukraine. Austria and hungary 15 mile traffic jam. Dead migrants were found inside a truck abandoned not far from vienna. Have beencts arrested. The japanese carmaker suzuki is going it alone. The request was upheld to terminate a project as a re sell its stake inn suzuki. More than 13 million. For compton. Those are some of your top headlines this morning. Right now, we will check on manufacturing data. In july. Ring slowed at 11 00, the u. S. Open starts. Oday all eyes will be on Serena Williams as she tries to complete a grand slam. And a 6 00 this evening, president obama arrives in alaska for a threeday visit promoting Climate Change in addressing the concerns of the native american population. We will be right back after this break with more on obama in alaska. As Global Equities head toward the biggest monthly decline in more than three years, investors are looking for any perspective on Financial Markets. Emily chang asked a venture capitalist what he has to say about recent declines. I think the markets have been trying to adapt to the new Economic Data coming out of china about issues in the chinese economy, and the other economy,american global currencies have moved against american multinationals in the last six months. I think wall street was slow to adapt to the reality. When a big Company Comes and says we miss our numbers because of currency changes, the presumption for investors is an excuse. People are just into this new currency world at i think the currency shift is reflected. You the u. S. Is doing really well. From a u. S. Standpoint, things are going pretty well. Emily mark told me earlier this week he thinks there were going to be a lot of dead unicorns. How do you think this will shape up . What does it look like on your side of the equation . These are startups. Some of them will work well and some of them will not work at all. In some environments, it is easy to raise money. Me, that does not translate into a call for everyone to panic. Each company should figure out its own strategy. The headline on sukhoi times. Is r. I. P. Good 2008 was not the our general attitude, i do not know if we had a headline, but it is be measured, cautious, and careful. Invest in growth. We have companies that are growing fast. We do not tell them to pull back. If anything, we tell them to push forward. For the companys well, i think they will do really well. What do you think should happen at twitter . I am in favor of founders running these companies whenever possible. I think of jack or ed ended up in leadership, i think that would be great. Erik that was emily chang speaking with mark andreessen. Now, with glaciers melting and temperatures rising globally, president obama is spending three days in the ark that where he will advocate for aggressive action to fight Climate Change. Andsenior adviser on energy Climate Change is with us. Brian, good to see you again. What message does the president hope to send with his trip to alaska . The president will be heading out today with a simple message. Climate change is real, it is being caused by human activity, and we have a national and an International Responsibility to a dress it. At the same time, because of the ingenuity and innovation of the american economy, we have an incredible Economic Opportunity as well so we can address this in a way that is good for businesses in american families. He will talk about the need to act and the opportunities we have here as well. I am sure there are alaskans who share the president s concerns for Climate Change. Most alaskans need to balance the president s concerns and his legacy, with their very real economic challenges. Senator, sayng the that the president does not recognize the vulnerability of the transalaskan pipeline system. Only one third of the pipeline is full. It macys operation is more oil is pumped through. It does not seem to be one of the president s priorities. Brian one of the interesting things about alaska is that Climate Change is not an issue of the future, it is a now issue. Increased incidence of wildfires affecting communities, and tourism, or it is receding seaiers and increased levels actually eroding the land that alaskan natives have lived on for thousands of years. Alaskans are learning how to a dress and adapt to these issues in realtime. The president will be up there and sibley to learn from them and hear about their stories, understand what they are going through, and talk about practical solutions, making them more resilient to the impacts of Climate Change or bringing more stable and Sustainable Renewable Energy to communities that right now have to rely on expensive and unstable sources of energy to power their homes and businesses. There is a lot of opportunity. The president is looking forward to hearing directly from alaskans about how the climate issue is affecting the lives. Erik away from alaska and sticking with energy issues, will there be a decision this year on the Keystone Pipeline . Brian that is an issue currently at the state department. I will defer to them on the timing of the process. More broadly, i think what you have seen from the president is action, tolarger address Climate Change. You will hear him today make a strong call for not only national action, but International Action to get a Global Climate deal. Also, bigger action with respect to our infrastructure. Have myriad infrastructure needs in this country and the president has been advocating for some time for a much more aggressive and visionary Infrastructure Program that would put people back to work here in the United States but also make our economy more resilient, more efficient. And more sustainable over the long term. Erik oil exports. Alaska is the only state in the union currently allowed to export crude oil, though there has been flex ability, most recently concerning oil exports or the swap between the United States and mexico. Where might the administration of oilhe question exports . There is so much momentum in congress that the restrictions on oil exports are relaxed. Brian the Commerce Department manages the policy around oil exports. The Commerce Department took action with respect to mexican crude. The policy of the administration has been well articulated by the department and it is what it is. That said, given changes in energy and oil markets, that is something we are constantly looking at and assessing as time goes forward. For the time being, the policy is what it is and we will continue to assess as we go forward. Erik we thank you very much for spending time with us. The president is heading to alaska. Brian deese with us from d. C. Have tumbled sharply over the past three months. We will talk to the ceo of Agricultural Equipment major agco. Erik u. S. Stocks are on pace to record the biggest monthly stocks in three years. Twitter down 50 in august alone. Matt miller is back now. What is it about twitter worth paying attention to this morning . Fallen since the end of the first quarter. The drop alone makes the valuation picture much different than twitter. I have got the target here right now. User engagement is huge and user growth is at least good enough for them. User growth has been a problem for twitter as far as investors have been concerned. Suntrust thinks this stock could rise from 2768 if they continue. They have 500 million users logged out of a one billion user base. They think they can get that back. They estimate of potential 22 active users. Ly most users, as we know, on twitter, who are active monthly, are active daily and multiple times a day. All of us included. You can tweet me. Case, suntrust thinking twitter after basically the big drop we have seen since the end of q1, you can see right here, can come back to about 38 per 26. 83. 26 . 83 he has theacey penn right products to fulfill its sales growth target. That is midsingle digit sales growth for jcpenney perry Deutsche Bank think that is possible. You see a trading at 920. 9. 20. It thanks jcpenney is finally as far asings right the product pitch. It has been a turnaround story for years now there we will see if it really comes through. Finally, i want to look at sun edison we are seeing an upgrade for sun edison by jpmorgan as well. A big price target upgrade from 1086 to 24 per share. Is the analysts over at j. P. Morgan think sun edison could take a significant portion of the hundreds of billions of dollars being fed into the Global AlternativeEnergy Market , so that means, obviously, solar but also wind, etc. Things that sun edisons boys well to take some of that. Back to you. Erik thanks very much. Still to come, commodity prices, what do the big declines mean for one of the producers of Agricultural Equipment . Agco coming up next. Erik it is time for picture this where we take a look at top photos and picked and videos. Open arms last week. Dozens gathered to greet the migrants with flowers and signs, welcoming. The video was posted on facebook by a syrian refugee. To see 800,000 seekers this year. Earlier this month, it was a mini submarine. This week, russian president Vladimir Putin was added again in a phot photo op that shows him and the Prime Minister grilling breakfast together. It has been a brutal week for stocks and a more brutal for years for commodities. The bloomberg Commodity Index 1999to a close level since for its view inside the Agricultural Commodities business. Martin richenhagen, good morning. We are doing our best to put you on television where we would like you. We know we are having issues. The commodity strategist for me recentlys told that the bear market in commodities, the end of the super cycle, could persist for another five to 10 years before we see an upturn. What is your view . I think the fundamentals in our industry did not change. A World Population is growing. So the increase is much higher than expected. That means we need to double Food Production by 2050, which normally means demand would be stronger than supply. You explain the persistently low prices if what you say is true . Martin we have certain political issues all over the world, talk about ukraine and russia. We have problems with brazil here the overall economy is not doing so well. In argentina, we are in an election year. Therefore, not to talk about europe, therefore i think there is a small related tool, external leading to the fundamentals of farming. Erik you have called argentina plus his policies communist and stupid. Is increasing its investment in argentina. Explain. Martin they tend to over regulate business. I have just come back from argentina yesterday. Face islem they must argentina is the only country in the world imposing next court duties or customs on crops, on commodities. The customs on soybeans is 35 , but if argentina would come to more moderate and a more free market approach, i think the in argentina could help to stabilize the economy in this country. Very smallenerate a percentage of your revenue from asia relative to what you get out of north america and more portly from europe. Yet, i am curious to know what your view on chinese Agricultural Commodity demand is. Martin i am heading for china on saturday. In china new factory and overall, for us, the state of the economy is not that important. We would like to see it grow in the future, but our job is to into a stable Distribution System and to increase market share stepbystep. Source forhina as a lower cost components. Your view on how the organic movement is going to affect Crop Production in europe and north america, specifically the use of pesticides and ultimately crop yields . Martin i think this is important. Consumers would like to see farmers be more stewards of the environment. I think they are pretty much going and heading into that direction. Senator brandt reduced the use of pesticides by more specific applications, more or less by square inch. That will help. In the area of fertilizers. With whereme the idea is to use more is over. Solutions, which help a sickly farmers ceo artin, agco everybody. Morning, welcome to the second hour. Stephanie ruhle is out today. A quick look at the u. S. Equity futures pointing to a lower open. The dow futures up 100 points. The sd futures down almost a full percentage point. President obama will become the first president to visit the States Arctic region during a threeday trip. Fors expected to call aggressive action to fight Climate Change pair their party taken one action. The president is changing the name of mount mckinley, meaning the great one and widely used by climbers. Salesers five yearlong might come to an end. Increased sales for 64 straight months. Because ofjeopardy what pushes Labor Day Weekend and the sales that come with it into september. It made up 20 of august sales. It has not been a good year for endowments at public and diversitys. They are reporting returns that fail to meet the industry standard. The university of texas had a 3. 3 return. The university of florida was all below 5 . Football time is running out for settlement in the deflategate case. Tom brady and nfl commissioner Roger Goodell are back in court today over bradys fourday suspension per the judge in the case said if the two sides cannot settle, he hopes to decide the matter by friday. Those are some of your top headlines at this hour. Has the chinese stock market ever been more important . China has been leading Global Equities on the rockies ride in years. The shanghai composite reporting the biggest twomonth tumble since 2009. Weight overnight, the index reversed direction and pared losses. Is this a meaningful reversal . Does it want to something in the future . Tom is founder and ceo of the mark analytics. Selloff, stevee cohen and Lee Cooperman with us from scottsdale, arizona p or what do you see in china right now . We see continued slow and slowing decline in the market. When the market was at 51 77, we predicted a decline it would take us down to 31. 98. We projected downside. It was pretty much in track with the decline of 1929. Erik you are referring to the u. S. Stock market crash. Yes. We received a lot of publicity in the forecast. It did not really crescendo or seven weeks ago. People paid no attention to the forecast that was made on june 12 and subsequently. As the market declined, against the psychology changed and people became more interested. It is akin to what we experienced in the january 15 high of 2014. We followed the market downside and thought it could develop into something similar to 1920 nine but it was a longshot and we got a lot of publicity and people do not pay any attention to the followup, which was at the market had to meet certain preconditions in the market reversed upside. There are preconditions into the lower 200 and the market just did not meet the requirements we are looking for. Of lastd see the low , we should 28. 5 see 25. 9 before the market bottoms. Erik go ahead 30 youre going to finish your thought. In 1987 off the august 25 peak, the market declined into everyone labeled the Second Coming of 1929. The market declined exactly and it did the same thing, if you take the march 12 high in 2000, you project it out 25 september point first 2001, it was exactly 38. 2 . Declines were 38 rounding it off. A 38 decline for the shanghai market was 200 per we preach that low last week. There were certain preconditions. They had to appear and they appear today. Even though it is a marginal decline, the opening was very important. The chinesed is decline particularly in the last couple of months, there has been a lot of influence interference. The chinese government. Markets bottom when the last buyer figuratively speaking is bought. Markets top when it is sold. It is opposite of what most people believe, that there is a group of people at the bottom who are very bright and move the market up. That is called Short Covering. It is shortlived. Upn markets seem to rally the bottom, some similar price patterns, tells you it is Short Covering and there is a vacuum in the market. That is what happened to the Chinese Market on the way down. In thesaid, were bottoming area. Instead of a 38 percent decline, we are at 45 as of last week. Stock marketthe did crash, took 49 days to crash lull,he october 3 woe the market declined 50 . Were not quite not quite there. Doesnt the credibility of your rational actors like the chinese government, that it is not buying itself or ordering others to buy on the basis of value or even on the basis of technicals, doesnt it wreak havoc with the kind of Technical Analysis you do . We do not do conventional Technical Analysis. Our analysis is more mathematic based. Technicians are trend followers. It is not really the same. We are characterized sometimes inappropriately to it we look at when the supply and demand balance is out of whack, and that is what it was at the june 12 peak in china and at the stock market in the u. S. Itwas out of whack and now is adjusting. It takes a while, especially when weekly and monthly analysis that we run is overbought at a peak or is indicating trend exhaustion on the upside. That is what happened. You have just got to work it off. Big celebration at the downside now is slowing, with shanghai and any complacency being built and for the first time, we have seeing the government in china is outside the market. We do not see it right now, that they are trying to influence the bottom. That just does not happen. Can you try connection between what you see in china and what is happening in u. S. Stocks right now . The two big down days, the mates 10th decline, the crash, you look back at 2010, it took about three or four or five days to rally, but once the market exceeded the high of the flash crash, it was exhausted and that is similar to what happened last week in the market. The market closed above last mondays hi, and also closed above the the prior fridays that led to exhaustion. We should see the market drift lower for the next month or so and we could probably make a new low, last weeks low, before the market finally bottoms. Erik below 16 seven. 1 16. 7. We will have to assess it. The market does declined sharply now and it could become more severe. We did see indications of the low last week that the small cap and midcap did put in pretty good bottoms, as did the dow jones average. The s p in the nasdaq did not. We can see injured data decline probably below those broad market into the next decline and maybe the s p and the nasdaq 100 making new closing lows and seeing some weakness there. Youre seeing to virgins. It is typical of what you would see at market tony points. Turning points. Erik what do you need to see before coming to the conclusion that u. S. Stocks are headed for another rally . We need time. What happened last weeks just reflexes, that is all. Just takes time. Like i said, if the market should decline faster than we expect, you will probably make a bottom quicker. We are entering into that time of the year when the market is susceptible to market decline in september and october. There,e will end it because we could keep talking but im afraid i am the one who has to go up and you can read more about tomss analysis on bloomberg. Com. Netflixss wild ride, the biggest gainer makes another decision, change in the movies you can see. What that would meet for the companys growth when we come back. Erik netflix is doubling down on original content. Blockbusters like catching fire. Cory johnson is in new york this morning. Netflix has had amazing success with orange is the new black. Cory i think this is an important deal, losing the steel. They have the ability to have a lot of movies. Netflix went from being a this is that would ship you the dvd of whatever movie want to see, and that it would stream you whatever movie you want to see and it put blockbuster out of business. When it moved to streaming, it was the same kind of service. Blockbusters,ms, they were all available to a netflix and what we have seen, and a lot of it has been the benefit of the deal, by losing ethics, you will not see the next hunger games on netflix. Erik for the last one. Cory or the last one. Cory they will be increasingly reliant on creating hits. Hits are hard to come by. They had Great Success with andge is the new black house of cars. You look at other ones, daredevil has been prickly claimed but also not a big success. But alsoally acclaimed not a big success. I do not know if it is by choice. What this truly reflects is the rising cost of content. Their filings is something called commitments and contingencies are not on their balance sheet, but they have off balance it is death liability of 10 billion. The increasing costs of content and the risks because there picking hits by having these deals were they have got a lot more distribution, ethic it the risk for netflix. The greatest gainer on all the s p 500s last year, it shows you the business is dramatically changing under the hood. Erik trading at almost 500 times estimated earnings. Cory almost. Erik does this reflect growing concern or interest by the ceo on margins . Cory they have made a decision on focusing on the top line and not being profitable. They are a barely profitable business now with a dramatically changing business model. Making their own hits, think that will be an increasing risk. Erik thank you. Cory johnson is in new york for the time being. Back, we will show you more of emily changs interview with a venture capitalist. We want you to stick around for that. Erik the defense secretary was in Silicon Valley last week. Emily chang talked about such capitalist a venture , and he gave his perspective on the relationship between Tech Companies and the government. The department of defense focused much more on the large federal contractors. There is a much bigger focus working with earlystage companies and that is starting to work now. I think National Defense has become synonymous with technology. Cyber security is a perfect example of that. Now heavily influenced, and the future is being heavily shaped by technology. New technologies can play a fundamental role in National Defense secretary carter believes that. The tech startup is the smallest organization. It is very hard. There is no national fit between organizations that big. Where youngpathways companies can get results, or dod can get the benefit of new ,hinking and technologies having a way to basically get involved early is critical. That is what the unit here is set up to do. Emily are we being outspent by other sectors . China . 20 years ago, defenses were all against teenage kids. Now the defenses are against nationstates. Then Cyber Security like other kinds of security, it is inherently asymmetrical. The defender has to be correct 100 of the time but the attack only needs to work once. Moreefense has to get much sophisticated. Were still the process of catching up to that. I would never contradict market in anything he says, but i think there is an issue globally. Every country the world either ,oes the kind of surveillance every other country either does all of that or wishes they could and is trying to figure out how to do it. This is an issue in every country around the world. A u. S. Company or an International Technology company , you have to figure out how to operate. It has become a messy situation. Emily there are so Many Companies and their very nature. Niche. Speaking with the titanium cofounder earlier and he said i think a lot of these companies will not be around. Completely in favor of dominating the entire field. World living in an online to we will all have connected devices around us all the time. This topic of how to protect from cyber hacking, that will be a new thing and companies will be there just to do what that. Erik the Parent Company of bloomberg television. We will be right back. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Erik here we are a few minutes away from the opening bell in new york city. Back with three things you need to be following, the founder and ceo david. I feel bad because i miss all of the excitement last week. Now is my chance. At 26. Goldman sachs analysts are out today with a note that says they think. T has overshot the market of nonfundamental traders using systemic strategies like smart data, market strategies, and they have to hedge volatilities. David in the financial field, you have to care about it a lot the matter which side you are on. Your clients are retirees. Are you telling them just to ignore the shortterm volatility . Not at all. Im telling people it seems obvious to me that although we are in correction territory right now, we are not in their territory but it seems inevitable that we will be there. I have got a lot of people sitting on the sidelines. Blamed the of people 1987 crash on portfolio insurance. Thing. Ow not the same other people have drawn a parallel between portfolio insurance and some of the strategies tracy was mentioning, these risk management, volatility Management Strategies like some of what the cpas are doing. How much of what we saw last week is an outgrowth of that as investors and traders making decisions on the basis of underlying fundamentals. I was thinking about that as you are telling the story. The reality is we have always had a gradual increase of volatility in various strategies as one trader tries to get an advantage over the other pair to did not fall off a cliff last monday. What happened last monday is we intraday swing. Frankly, it was a bit overdue. Volatility and quantitative easing in october. We have a 300 point down day in the dow and the next day it would bounce right back up 300 points. The vicks really did not reflect it very much. What we are seeing now in the current fix levels in the mid is probably more indicative of what is happening. Number two has got to be credit versus stocks, again. Theme andching markets. Before i went on vacation, we sat right here, in the old studio, and talked about the discrepancy between what is happening with credit spreads and stocks. Bloomberg has crunched the numbers today saying that if the current relationship between stocks holds, we could have further to go in terms of the s p falling. They could have a fall of 18 . At its worst last week, the s p was down 12 . Of pain in credit and has not fed fully through the stock market. It depends on where you sit. Are the credit guys right or that stocks guys . David this feels to me like 2007 again. We knew about the subprime mortgage crisis early on in 2007 but it took until november for the equities market to react. The credit spreads starts to widen though in the first half of 2007. That is what we are seeing again. I believe that is when the indicators i see when i tell people to stand on the sidelines when it comes to equities. You are likely to get sales prices in the nottoodistant future. The open belly just heard is an alarm bell. David in that regard, i believe yes, absolutely. Tracie cone the most famous example of this discrepancy happening happened in 2001 as well. He saw credit spreads in the stock markets, the bursting, obviously. Number three, i wanted to bring you slightly more positive news. This counts in todays markets. The Czech Republic has sold government bonds in its local currency at a negative field. It is one of the few emergingmarket success stories. 001ve fields of percent. Erally clambering we will clean this up a little bit. All that easy to see,. Ight there, average yields the fewer people are expecting some appreciation at the moment. A rare success story. David, so many concerns have been raised in the past two weeks, which began with a surprise valuation. I do not know if we could even draw a dotted line between Czech Republic in china, but i want to know your view on emergingmarket. David in general, what has happened is the fact that there is so much money sitting on the sidelines since 2007, one way you can explain that the equity markets have come up isnificantly since 2009, it the reason you can explain the equities markets have come up so much but the yields are down so far. The swiss franc has been, the 10 year it has been in the negative field so far. 10 year bonds trading at a lower rate than ours. It just spread that much further into a form of emerging markets. Again, too much money out there, too much cash trying to chase all asked all asset classes. Lets take this opportunity to turn to matt miller, who has followed the early trading in stocks now that the nasdaq is open for business. Matt lets take a look at where markets are. We do not see a huge drop in china last night but every morning for the past weekend a half or two weeks, i wake up and look and see what the shares index has done so i know how u. S. Stocks are going to open up. It has been a chu indicator. We shot them down. 8 . See the major indexes down as well. This is a great way to check how shares have done. This is george banks deutsche to chinesectly shares to nonmainland investors who want to get in. They use regulations and china to give outside investors access thankres here you want to goodness if you do not know about this or did not have access to it in the last three months, because it is down 40 . You can see it is down today. That is the emerging markets index down there as well. The shares year to date, obviously, the last three months have been very rough. Obviously, there was a big run off before that. The main problem, i think, for u. S. Investors overnight is that no matter what china does, it does not seem to be able to prop up this market when it is most important. They went in and told workers listen, we want to inject 15 billion into the market, do not produce any negative research, do not say anything bad about the market, do not let anyone sell, you know, it still does not work and we still see a drop in that is why we see u. S. Index down today because they do not have faith in what is going on in china. At interesting stories closer to home. Fiat chrysler, i follow this stock. You can see it down right now. Fiat chrysler has had an incredible growth rate story. Aer the last 64 months in row, everything a month, Sergio Marchionne has provided row for Fiat Chrysler investors as far as sales. Literally every single month for five years. Will happen this august, labor day will be counted as part of september rather than part of august. Because of this little calendar quirk, he might lose his perfect track record. Some analysts are looking for a drop of 1. 2 in sales growth this august. Bummer as far as a little calendar change for Fiat Chrysler sales. Everyone will feel the same issue, all automakers, but it is just kind of the end of a winning streak for Fiat Chrysler if they do not manage to pull a rabbit out of a hat. Oil stocks obviously getting crushed as the underlying commodity falls in value, even with the rebound, were looking at 44 dollars per barrel. Phillips 66 getting a huge boost today from Warren Buffett here bestnote, and buying his as far as Berkshire Hathaway is concerned. People are still driving a lot and gas prices are still cheaper. That to you. David. Ets go back to moments ago, when tracy was still here, you said now is a good time to be on the sidelines when it comes to u. S. Stocks. That is what you are telling your clients. What do you mean by that . That it is a good time not to be buying, a good time to be selling . Is it a good time to be not in stocks at all . David yes. I believe strongly we are going to get down at least into the low 1500s. A 20 ives us close to decline from where we are today, let alone from the peak. That sounds like an instruction to sell your entire portfolio. Me,d some people say to pick one or two stocks that you think will do well that i should buy . It just does not seem it is a to try to guess what will do well, it is really difficult. Erik going back to your focus on retirees, what is the best to do . Would you advise people to maintain their positions to buy a market hedge . Hope that over time, stocks recover from this 1500 low you see in the s p 500 question mark david at least keep a very close eye on it. Add likeat want to capitalists and get in when the market goes down, it means they need to shed some of their gains and take some of that off the is still fixed income in play. So many people say we have a fixed income bubble. To them, i say they are not the ones who really understand fixed income. The widening of the credit spreads we have seen recently have created fixed Income Opportunities for us. I predicted right here on this network at the beginning of the year that i did not think Interest Rates would go up, shortterm rates will be increased by the Federal Reserve before the end of the year. And more looking more likely, if the fed raises shortterm rates, a yield term will starve off any recovery we have in the economy so far. I think fixed income is still a Good Opportunity for the right person. Much,thank you very david, the ceo and founder. School forback to nba students. Are they prepping for jobs on wall street or in Silicon Valley . We will find out which is winning over the grass next. The grads next. It is back to school for College Students across america. Were taking a look at the incoming clasp your where do they want to work upon graduation . Industry is like wall street or consulting, or will Silicon Valley win their hearts . Lets find out from the director of Career Management at stanfords graduate school of business. Also with me is janet lauren, who covers Higher Education here at bloomberg what are you hearing from the incoming how class and incoming how does that compare . Where they going . I am not speaking it to the incoming class. And as typical, they are very interested in becoming a part of stanford, getting caught up in what they typically the class ahead of them are they should be on campus in a couple of weeks and our expectation is they will respond in the same way the classmates have in the past. There is a strong interest in entrepreneurship. There is also a group of students very passionate about finance. Can we get specifics on that . A growing interest in tech, more than you have ever seen before . Ins it parallel what you saw 1998 and 1999 and 2000 . To the degree that there is interest in finance, is it a smaller minority . Tech goes up and down. We have had surges in tech, as you have pointed out. There was a strong interest in tech before the bubble burst. ,hat were seeing right now with the strength in the ipo available,uidity with the proliferation of the Technology Business models and different types of businesses available and the success of a number of startups, students are pulled in that direction. Provide a little context, on the other hand, each year, we admit 400 students and they come from different backgrounds. I think if you can generalize, it is that they really have very singular and discrete career interests. They may initially come and influence one another and then investigate things that they do not know much about, but by the time they graduate, theyve really sorted out and are really going for things that particularly interest them as individuals. That means there is a set of students interested in finance and i find a way to wall street. Can you talk about what their interests are . Are they mostly startups or established Companies Like apple and oracle . Talk about the differences youre seeing of their interests . Right now, there is a very strong interest in large tech. These are category leaders like google or amazon. They draw a lot of students because it is our wonderful brands, innovative companies, and students feel like if they go there, they will get great experience and it will boost their career and later they could parachute down into smaller companies. Is a definite interest in companies that have started up recently and are really successful. Names like interest, over, uber is huge, and they say about 20 of the just want to start up experience. Also getl sleep questions about the cost question mark about 100,000 per year in the government lending rate for graduate school is close to 7 . Can you caught talk about the cost . Tion mark a lot of students do factor that in and were in a visit a position where we can finance them. The endowment is in great shape. Stanford liberalized our financial aid. We want to make sure if students are qualified and attracted to the program, that were really able to finance them. And allow them to pursue their interests. Mba, do the three letters, still reflect the enormous variety in education and that a graduate even at the Stanford School of business or the graduate school focusingss, with get on technology versus the kinds would have to say getting into finance or consulting for that matter . Stanford, we have got professors focusing on organizational behavior. We are a school of general management. We have finance professors and up aasingly, we have built strong curriculum in entrepreneurship, which enables the students to focus in whatever area they are particularly interested in. The other thing that is unique about stanford is there are a number of programs, the design school, the school of engineering, and stanford emphasizes collaboration fairly typically bring together interdisciplinary teams. It is not just the nba. Exposure to the other parts of the university, as well as the fact that we exist in Silicon Valley. It is very rich in terms of the venture capitalists that are available. There are a lot of interests in the students. I think stanford nba brings all of that. Erik thank you very much. Coming up, maria pulls out of the u. S. Open and Serena Williams tries for the calendar grand slam. Meanwould a win like that for the tennis stars . Erik that is what u. S. Stocks look like right now. The s p 500 is down a little more. The dow is down almost 150 points. Industry groups on the s p 500 are trading lower, energy leaving leading the way. , downtperforming sector 1 . Lets move from stocks to something a little more fun to talk about. The u. S. Open begins today right here in new york city. A huge focus is on Serena Williams. The win at the open this year would deliver the calendar grand slam. Majors in the same year, something that has not happened in tennysons 1998. The managing director img tennis represents more than 100 clients, including serena. Easy one. N with the what would it mean if serena create a grando slam . The last was in 1969. She will be the one who on most titles, it will make the best player in history. Of tennis, not just womens tennis. I think you are right. It is huge. You need to keep in mind, to me, it has much more merit, what she is doing. Why is so much attention being paid to the difference in what Serena Williams, as arguably the greatest tennis player that ever lived, makes, andher occasional opponent similarly also the decline uruguay so much attention . It is a good question. Maria is youthful, charismatic, she is very, and international. Someone who came from russia to the United States and she has been able to capitalize her success nicely. Years the recent can we say the same things about Serena Williams . Absolute absolutely. The fact that she has these amazing brands in recent years like j. P. Morgan chase, delta, it proves she is available. Representscountry her. Does she talk to ing about it, that she complained . She cares thatnk much. It says something about how the market and the public views you. She is well marketed. Any is very happy with that. Erik she will be even more marketable if she wins the grand slam. Nice having you, fernando, the measured director of ing tennis. Some of his clients, on the center stage, the centre court this week. What lying in august signals about commodities in demands. Olivia it is 10 00 a. M. In new york city. Welcome to the bloomberg market day. Markets are down around the world this morning as u. S. Stocks extend their worst month of trading since 2012. President obama heads to anchorage, alaska for an arctic summit. The point of conversation will be drilling for oil after recent approval of shales explanation plans in this eight. In the state. Donald trump is getting competition from ben carson. He is not the only one making waves in the race. Good morning. Happy monday. Im olivia sterns. U. S. Markets are lower again this morning. The s p down by 20 points or about 1 . You can see the s p is on track for its biggest monthly loss since 2012. This follows declines in equity markets in asia and