Nearly 3,000 coming just in the first 90 minutes. The blue chip index closing down more than 500 points for the second straight day and over the last three sessions the dow and s p are down nearly 9 and the nasdaq is off almost 10 yesterday alone 685 billion is lost among market cap in s p 500 companies. Thats 100 billion more than apples market cap. If they dont tell you enough about the volatility check out the vix. Moving above 50 intraday for the first time. Check out the front pages of some major newspapers around the world today. Youre looking at sort of a full list of whats going on in virtually everybody touches on the market above the fold. Like the bear there on the New York Post . Wild. And the guys a lot of times the photographer is waiting and he may have a scratch here on his eyebrow and looks like hes stressed. I think they pose for them now. They see the photographer coming and theyre like that and just do that look. They want to be in the paper. Come on. Have you noticed what we talked about yesterday, how we keep talking about a thousand points in a week . Its not that much. Its 6 and i said the market is going to let us know that thats not and we did 1,000 in 5 minutes at the open, but all said and done i think were getting acclimated where we need to recalibrate a big move because it was like wow, we made it back to only down 600. Did you believe when it comes to percentage moves it doesnt rank very high. But yesterday when we were done, down 600. Didnt you think that was a pretty good showing . I thought things had gotten better but did you think that the open, was something that was a terminator style future. With hair like that. Dont knock the hair. If nothing else dont knock the hair. Hes a technology guy. I hear that wasnt ka pitch y capitulation. Didnt everybody hah v to ha recount the risk. That 1100 point decline in the dow had a lot to do with that. You couldnt buy a whole lot of stock down there. It was a five minute window. You could get one or two pieces and that was it. Netflix was down like 18 or something. Ge was like 20. There are quantitative models. None of us forget 1987, selling begot selling. This is different but when the market goes down some are forced to sell and we saw some of that. I dont know if you have any comcast stock but Key Employees do get some comcast stock. Did you notice yesterday where comcast i did. 54. It was trading at 50. I didnt see how far it got. You dont watch it that closely. Why would you . But that was down at 50. Yes but hit 50. Im a longterm bull on comcast. Better be. Some day they may award something to you. I think so. You keep it up. Keep it up. So u. S. Futures look positive this morning and sharply positive. Im a proud owner of comcast stock. Let me just say. You also have that now which is easier to sell. The commission costs are less. True enough. So it was another ugly session in china even though we see the u. S. Futures higher this morning. The benchmark shanghai composite index above the key 3,000 level accelerating into the close. Investors pointed to disappointment about the lack of policy action to beijing so it declined once again to more than 7 . Nikkei closing down sharply. Stocks tried to rebound early in the session but turned negative in afternoon trading. The rest of asia seeing green arrows. As for europe in early trading were seeing positive moves there across the board germany is higher by nearly 3 . France is higher by more than 3 . Ftse higher by more than 2 and greece up nearly 7 . Just a thousand to go. Maybe theyll be back to even. More coming up in the next half hour to talk about more of what happened overseas. Where were you in 1987 . The oppenhiemer funds. I remember tuesday. Tuesday morning is when it almost fell apart. I sat on the trading desks. Futures were down and at 2,000 that was a lot but the reason i brought it up i had a machine and i took a picture of that at the end of monday and thats when you saw like regular stocks, real stocks at 4 and 5, like American Express and the big names were at numbers where you saw them yesterday and its like thats crazy and they came back. That day they never came back. Most of the dow was like Single Digits and i have a picture of it. Did you bring a camera to the office . Back then you didnt have your cell phone. You would have had to think about having a camera at the office. How it actually came to pass but you would. I spent most of the day under my desk and the phone would ring and id pick it up and id go joe who . Kernen. No, im just cleaning up around here but that was some day. I think it was classic technical selling. You got the panic low on monday on the huge volume. You got the turn on tuesday, a lot miss a lot of turmoil, closed up nicely on the day. The valley continued but then we had the test of the low in early december and went back almost to the low of october. Is that going to happen this time . It took three years to come back. No it was back fast. We went down to what level . We were at 3,000 almost and we went down to i thought it was 2700. And then that was we didnt get back up to 3,000 for awhile. Took it awhile to get back there. Do we follow that pattern again . I think we do. I hope not. Those days it took a couple of months to retest. Things are telescope now. They happen much more quickly. How many days . Nothing. Are we going to go straight up from here . I dont think so. Do we get a reflex rally from here . Do you think the bottom is in . Theres a chance the bottom is in. Its at least 50. What about the basic idea, correction or crisis . To me theyre the same. Is it correction in a bull market or the beginning of a bear market. I think its a correction of the bull market and the fun mentals of the reason i say that which we can talk about. Andrew, we used to walk to school both ways, snowing, and if you werent here in 87 you really dont know anything, right, bob . And we were allowed to not do twitter and facebook because we have all of this other vast knowledge. Merrill lynch owned them for awhile. I called my dad and asked if we could afford to keep me in college that day. Did you . Did he . Yeah. Despite the way eight piers now. Lets check out oil which is rebounding today. 1. 17. Dennis will be on a little bit later to talk about the prospects for crude. Its gotten to the point where we need crude to go up for equities to stabilize which make nos sense longterm. Theres the ten year 205 that got under 2 again as people thought some day it will get to three. Weve had more false starts than you can imagine. 115, the euro really got much more expensive to take a trip to europe in the last week. Back to 115 which is down a little bit. Check out gold which people that have been longterm gold bugs are starting to say this is the time and you can see a little bit of a move on the right but that remains to be seen. I dont know. I dont know. You have to pay to store it. Love it at 2,000. Unless the world changed big time in the last week, i dont think so. I have a little. Got to have a little. To bribe the border guards. These days we dont have border guards. Andrew, can i throw you a bone. Theres no border. Theres a donald joke in here somewhere but i dont have it. How about my ode to trumpster. Is it homage. Focus on everything above his forehead right there. If its working for him and he never shies away from yeah this is my hair and it looks great. But you dont do a comb over. Yours is real. He does a comb over. No he doesnt. Its growing there. Hes not bald. You met him. Have you met him. I know him and its not a comb over. What do you mean in of course ive met him. Its not a come over. Do you have a comb over . Okay lets go. The recent market volatility leading nearly everyone on wall street to rethink forecasts and a note to clients Goldman Sachs argues the Global Economy is not alt risk of recession. Still the firm is lowering its shortterm outlook for Global Stock Markets to neutral. They remain overweight over 6 to 12 months and expects the s p though to rise by 11 to reach 2100 by the year end. The firm now expecting the asset class to underperform. The analysts say they quote, see a meaningful risk that markets are overinterpreting the collapse of oil and Commodity Prices as a negative growth signal. They believe its excess supply rather than weak demand. Thats a debate were having every single day. And having ripple effects on the ipo markets, historically a slow period for market sales but its worth noting that Radiance Technology cited Market Conditions for companies that have recently gone public. Check out share of alibaba. Shares dropping below the ipo price closing below 68 for the first time. Twitter and etsy all dropped below their offering price. The average gain for 2015 ipo compares to last year when ipos delivered an average price jump of 20 . This is going to go down into the private market crazy unicorn situation and who knows whats going to happen. As we have been discussing the market turmoil sparking all kinds of questions about the fed and possible rate hike time line. Heres what former dallas fed president had to say about the markets and the economy. We went through a substantial correction in 1962 and 1987. It wasnt harmful to the economy. People are jumping like the last comments you had from several people a little bit too early here. Well see what prevails. The u. S. Is strong. Our numbers are moving in the right correction. Lets bring in the Portfolio Manager and our guest host bob dahl. Can either one of you explain, the china market goes down 8 . We go down 1,000 points on the open. So the next day the china market goes down another 8 and were up 400. Are we decoupling . Maybe we should have been all along. The key is is the China Economy going to get bad enough to effect the Global Economy. The reason we had the big correction is the fear of the possibility. So were not worried about it anymore . No, but i think if you look at the effect of the u. S. Economy that there is a decoupling. In other words, the United States economy is not that dependent upon china. In some ways the devaluations might actually help u. S. Consumers. So i think that the u. S. Economy is better able to weather the storm than say germany is because theyre more dependent on the exports to china. So is this the bottom . I dont know. But we think that stock offer pretty good value. Was there any do either one of you think that the september rate hike which seemed to be a certainty two weeks ago, did that start to come into play over the last week or was it all china . Its a secondary issue in recent days but its in play and its not so much are they going to do it or not, its the confusion around it and disunity in the fed. If they told us theyre not going to raise rates or they are going to raise rates, either way would be better than have no clue what theyre going to do. When youre in a period of uncertainty and confusion more uncertainty and confusion just muddles it. What if they dont have a clue . They probably dont. The reasons they were going to do it in september are probably still there if the world settles down. If the world is messed up like this they wont go in september in my view. The rate of inflation is likely to go lower because of the drop in the price of the oil and the strength of the dollar. Its basically 2 . Unemployment, you know, you have employment of 5. 3. If inflation is falling to 1 . Worried about deflation at this point. I dont know that nobody is worried about it or at least some people should worry about it because we do see deflation in many parts of the world. This piece says this is paying the piper for deflating assets. See, i know that that narrative is out there but if you look at the fundamentals of earnings and what Interest Rates are you could make a good case that the United States stock market is fairly priced. When you see a snap back or correction, whatever in this short of a period, is that a good sign or a bad sign . Well, its a normal sign first of all. You get about one correction. Maybe more than one correction on the year. Its a normal thing that happens there. Its hard to ever say when a correction is going to come. Go back to the issue of china. Go back to japan and when japan fell out of bed and you said that economy second largest in the world isnt going to do anything for 30 years, do you think the u. S. Stock market would have done as well as it has . Okay. So china has fallen out of bed. Maybe its not going to achieve the growth levels weve seen for a long time, we can handle it but china is much bigger and much more influence in commodities. So what is it . Can we survive or can we not . We have to separate this into economic effects and financial effects. If the economy in china slows which it is. For sure. I agree with that. Gdp is 0. 7 to export to china. If it slows enough where theres a financial problem or financial accident, the worlds Financial System will have a problem. Thats the fine line. I dont think we crossed it but we have to keep our eye on it. We cant be complacent because theres a possibility that things slow much more than were expecting but that said you look at the data, we have pretty good data out of germany today. In the United States its not booming but consistently showing growth at 2. 3 . Unemployment rate is coming down. Labor market is good and theres still a lot of positives. Im not saying that we couldnt go lower. We could. But youre getting good value on the stock market and 2. 2 dividend yield. What takes us lower and does he have anything to do with it . Will the fed take us lower . I personally they will wont. Partially because were talking about the rate hike for so long theyd have to surprise us a lot for the fed to be at these levels. All right. So the high in 1987 started the year at 1895. So closed december 31st and went from 2700 and closed at 1938. December 30th, 1988, 2186. Wasnt until december of 1989 it went up. I remember it was a time when we werent getting i thought we were going to get back to the highs in november. We didnt in 88 or 89. Since this bull market started in 09, this is the 5th double digit percentage decline. The other four, it took 57, 16, 18 and 92 days toob back to an all time high. That is quick. I dont think it will happen that fast this time but i would have said that the other four times and that came back. Im getting it in my ear. This is what weve been waiting for. I saw that earlier. That they added more reserves than they have in the past. I got this from mark grant at 2 28 a. M. They added the most funds in the open Market Operations in six months its also cut the benchmark lending deposit rates by. 25 . And take a look at this the futures just moved another 100 points. China is done. But this came out of 2 28 a. M. Here. I think youre talking about the stuff from mark grant is slightly different than what were talking about here. This is pboc cutting Interest Rates. Central bank cutting Interest Rates. This is hitting the wire within the last minute and a half. Youre talking about liquidity. Right. So now theyre trying this. Maybe that is helping our future. Look at that 300s and now the 400s. 477 . Yeah, why not. What is that . 2 or something. You know. Its good. Its good. If people combine themselves 1 these days theyre happy campers. Im sorry. Thats a term that jerry seinfeld. Theres a term thats not used enough. Happy campers. All right. Cant use that Going Forward. An increase in the rally. Are you cautiously optimistic Going Forward . Im constructive on the market. I heard people say all eyes are on. All eyes on the pboc. So listen, we had big breaking news in the last few minutes relating to china and efforts to stabilize the markets this. Well talk more about it on the other side of the break and see what that means in terms of stocks and the price of oil. How hedge funds are trading well talk that as well. First as we head to break, heres a look at this day in history. Welcome back. We have news just crossing from china moving these markets. Dow will open up about 100 points higher than before. Thats in large part because were finally getting some policy measures out of china that weve been waiting for for the past couple of days. Going to cut the benchmark Interest Rate and lower Banks Reserve requirement ratio and cut its lending deposit rate. People have been trying and waiting over the weekend to see if china was going to try to stabilize the markets. The Chinese Market closed at this point but were seeing the market here in the United States move on this news. In the meantime, lets get to kate kelly who has been tracking what Hedge Fund Managers have been doing during all of this market mayhem. Good morning. Its hard to generalize but the sense i got from talking to folks yesterday was while two days of market carnage prompted hedge fund selling with many believing u. S. Economic fundamentals are still strong it may have been a continuation of the strategies funds had in place than bailing out of things because there was a panic mentality. The stock market was down big, especially in the morning but commodities in emerging markets are sustaining the more long standing, long lasting pain here in the hedge fund books. With chinas weakening now clearly a story line, some are shorting baskets of emerging market currencies versus the u. S. Dollar expecting a rim effect to occur soon as china unwinds but not clear where that starts and wanting to make a generalized bet. Oil taking a beating among many commodities including copper and aluminum. At last check Money Management players in the market were still considerably net long crude. Now that data is a little bit lagging. Cft puts it together on a weakly basis. The hedgefund community has gone predominantly short according to a friday Credit Suisse report marking the least optimistic outlook for nearly a year in crude. Some looking for farlower levels on stocks as they continue to fall. A signal for the strong correlation between china and raw materials. One person showed me a chart of the shanghai composite versus crude saying they expect it to go farl lower. Some like ga