Out look from sainsbury after they will beat full year profit forecasts. Russia approves the use of military force abroad in a move that could see boots on the ground in syria. Good morning. We have a rally on our hands. The xetra dax bouncing back after two days of losses. Glencore continuing to bounce back after its 30 fall we saw on monday. The cac 40 with an impressive gain of 1. 8 . Yesterday the levels we saw at the close took us to the lowest levels since 2015 but since then a little bit of stabilization in the u. S. Markets but also a rebound in the asian markets. Speaking of, lets have a look at those as well. We were at 3 year lows but we moved off that thanks to the rally were seeing under fold today. Were up by 2. 7 despite disappointing industrial data we got out of that market but clearly ignoring that but still probably a little bit of caution in these markets given that tomorrow well get the chinese pmi numbers. Just in time for october 1st. Lets take a look at the ftse and what happened so far this quarter and we are on pace for the second monthly read and the ftse 100 could be recording the worst quarter for 2011. The s p 500 for the month, look at this, were also seeing declines of close to 5 at the end of it and we are on pace for the worst quarter in quite sometime. Lets flip the page and check in with shanghai as well. Speaking of worst quarters, worst quarters for shanghai and also indonesia since 2008. You have to go all the years back to the Global Financial crisis and who better to join us to talk about the declines and the exits of bond markets than sri who is with us in london. Susan, its going to be a very interesting final quarter for the Chinese Markets and the broader economy. Lets not forget if you take a look at the quarter, the almost end of the Third Quarter, the china markets are down almost 29 . So that represents the worst quarter since 2008. Since the death of the financial crisis. In terms of the narrative its really about the policy signals both with regard to stabilizing the economy and international in the stock market. We received very mixed signals in terms of how beijing is dealing with the capital markets. In terms of the stock market, are they in the market . Are they cheer leading the market or at the speculative end . We dont know. We have mixed signals. We need more clarity on that score. The other clarity is the currency. Its now subject more to market forces. Pressure remains on the yuan and with that potentially comes capital out flows from china. So the Liquidity Position slois looking that much more precarious so we could see more moves by the pboc to top off the liquidity but in terms of the policy outlook a lot of people are telling me we need to see bolder measures and policy support to stabilize Economic Growth. So drawing a line under growth expectations for the worlds second largest economy is imperative at this juncture. Theres a couple of events the markets will be following. In october we have the psc. So this is a very Important Forum where we could get more clarity on the structural reform agenda where we could see some momentum on the score that could be positive for the markets. And in early december the stock market will be celebrating 25 years of the shanghai markets. At this point in time have the markets really evolved . And at what point are we going to see a fully functioning, deeply penetrated stock market. The shenzen could galvanize the market. With that leverage comes a lot of volatility still. Lets talk about volatility. Theres been so many sources of volatility, china, the uncertainty about the fed rate hike and then we have the big job in Energy Shares as well and theyre up 93 . Were currently trading out a level of 26. 83. Speaking of energy, lets show you the S P Energy Index this quarter and no surprise this was the worst performing sector this quarter. Were down roughly 23 as Oil Prices Continue to accelerate their declines. Were at 440 and finally the nasdaq, this quarter, well it is on track for the worst quarter since 2011. The Third Quarter of that year. The nasdaq this quarter is down 10. 9 in part because we saw that big drop off in bio tech shares and that really has accelerated and really gained pace over the last week or so on the back of Hillary Clintons comments too. Last but not least we want to show you that the picture doesnt really look so different for the European Markets. We are on track for the worst quarter since 2011 and the xetra dax this quarter is off 16 . Were back below that 10,000 level. 9,609 points. Lets talk about it then. We have the head of fx and Commodities Research and i guess from an equities perspective were looking at the worst quarter for europe since the Third Quarter of 2011. Im wondering from an economics and fixed income view what does that say to you . The market has turned extremely negative on the world and on europe. In my view its a little bit ahead of itself. Particularly i think theyre very very negative on china and were starting to see early signs of market stabilization. Key focus for europe and European Markets, is draghi going to deliver more in terms of easing. What about easing from elsewhere around the world in a world where we might be getting Interest Rate hike and tightening from the fed . I think the pressure on draghi is righting by the minute. You have inflation down to 1. 57. Thats pressure on him to react. We think that maybe early next year or maybe december you will see some kind of commitments to extend its program. Its lower for longer. The fed is different because if china, and if were starting to see early signs of stabilization in china its like to see it will see European Market stabilization and its going to be key here. One of the big trenlds this year has been the treasuries, of core paper in the euro zone as well. Do you think that well see at some point a big sell off in core paper or do you think thats really just too far away . I think its too far away because you simply have, you will have more easing coming through from the ecb. Thats very likely. When the fed gets started its a little bit like sell the rumor buy the fact. Theyre going to move relatively slowly. The pressure on inflation is not really coming through so we dont really see that massive sell off in neither european or u. S. Fixed income. So if we expect more easing from the ecb, tightening by the fed, in october and december what does that mean for the Euro Dollar Exchange rate . That has been incredibly resilient. Were currently at 112. Will it go back to 105 . Well have some downward pressure coming through in europe. Whats interesting is its related to the fx hedging flows we have seen on equitieequities. So you have euro buying. Its been a little bit of a safe haven currency but if were going to see this more easing from the ecb and fed get started youll see it. We have seen the low in march. I dont think well go back to 105. Its more around the 108, 110 range. But the broad dollar strength, at least against the majors i think is coming close to that cycle. Thomas, thank you so much. Head of fx and Commodities Research. Now lets show you whats happening on our cnbc web page because you want to get more on the Third Quarter. How it is played out and what to expect for the rest of the year. Dont forget to head to cnbc. Com. Emerging markets should head for a increase in corporate failures as they analyze Monetary Policy. It says Indebted Companies in emerging market nations are likely to struggle significantly from high borrowing costs and stagnant growth. Stay tuned to cnbc. Our colleagues will be speaking exclusively to Christine Lagarde later. Dont want to miss it. Speaking of dont want to miss, this is something im excited about. Coming up on the program, an electric atmosphere in the state of california as elon musk delivers the first model x. Finally. But can tess hla continue to che ahead . Two executives go on trial in france. And were in paris with all the details. And we check in on a sticky situation involving some Oklahoma Police officers and a swarm of honey bees. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Car makers are leading in europe after china decided to have the sales tax in a bid for the auto market and struggling economy. They represent around 70 of the chinese market. Shares also surging overnight. Lets have a look. Fiat chrysler up by 3. 7 . And even volkswagen bouncing back. Thats exactly what china needs. More cars on the road, right . For the huge traffic jams but staying on transport we have Fiat Chrysler accused of under reporting death and injury claims to u. S. Authority which is is a breach of federal law and this is months after the car maker was handed a order fine for safety recall lapses. According to the national Highway Traffic Safety Administration discrepancies have been discovered and early warnings and they report that data and something the Organization Called a significant failure on their part. Do you like fast cars . Who doesnt . I love fast cars. Ferrari could be set to launch its ipo as early as friday according to cnbc sources. The offering could be 1 billion in size and could price during the week of october 12th. The luxury car maker planned to list about 10 of its shares on the stock exchange. Meanwhile, the chairman of the vw cars is confident they can fix the problem in the emissions scandal. The main focus now is to restore trust. Our main focus are the customers. We have to fix the problems with the customers and for the citizens i would say we made some mistakes. We are really sorry about and we are concerned and we will do the upmost to solve the problems and make sure that those kind of problems cant happen again. Lets get back out to nancy. Nancy, fixing many of the engines and the software, that will take a lot of time but fixing trust, thats going to take even longer. Thats right. A lot of time and money to fix this software and you just heard the comments. Head of the wv passenger brand saying hes confident on the fix but we dont have answers of what up to 11 million vehicles looks like. They were getting ready with a plan to start that process but it could take weeks and months to inform the customers. You talk about earning the trust back. Thats been the focus here all week. It was a week ago since we heard that the former ceo was stepping down and the company has been moving very quick tlly to try t restore trust and one way to do that is to try to get an investigation into what went wrong and who was responsible. They still think there was criminal wrong doing here and we expect more investigations to come. Not just on the former ceo and were told that the Supervisory Board is meeting here. Reports suggest they could be looking at the first preliminary evidence from an internal probe and within that probe theres findings that say back until 2005 the decision was made to input so of these software devices. So well try to bring you confirmation of any of those as soon as we get it. Moving ahead the other focus could be an announcement from a new ceo of porsche. The leading canada for that ceo position is currently the head of product and he is a career veteran under volkswagen. He got his start at audi and really worked himself up the ranks so this is someone that knows the Company Inside and out. Hopefully well get that statement later today. Nancy, thank you so much. Now lets talk about tesla and finally delivering its second production vehicle. The cross over model x, electric suv at a launch event in california. So there you go. Ceo elon musk estimating that 25,000 customers preordered the model x. It will take 8 to 12 months for them to finally get their hands on one but phil took a look at the newest edition to teslas fleet. After a lot of anticipation here it is. The model x. Two things stand out about this electric suv. The first thing youll hear talk about the falcon wing doors for the second row. A lot of people say what happens when the door open up . Theres ultrasonic senators built into the door panels which will tell them whether or not theres enough room to open up and how high they can move up. The other thing that will stand out, the panoramic windshield. This windshield when youre inside the car and youre driving its unlike what we usually see when were behind the wheel. It feels you a fuller view of not only the road but the outside surrounding. The first five have been delivered here just outside the tesla headquaters in northern california. The starting price for these models, 132,000. Tesla model x, the first ones have been delivered. Now the challenge ramping up production through the Third Quarter and into 2016. Thats the worlds first luxury electric suv and wire magazine has called it awesome, futuristic and really matching expectations because we have been waiting a long time for it because they unveiled the prototype in 2012. Here we are finally getting their hands on the first one. Its interesting. Tesla said we want a car that caters to women. We want a car that caters to football moms, to soccer moms, is this a car at starting price, 132,000 that caters to these women . Im not so sure. Actually to well off women but its still a very, very fancy car. Its a beautiful car. It kind of reminds me of the car back in the 80s . No. Did you ever watch the movie back in the future. Yeah. Those expanding wing. I hope it still has insane mode. Whats that . You push a button and it goes from 0 to 80 in three seconds or something but what i found interesting is it comes with a bio defense button apparently. I saw that. What is that exactly . Just in case. He had to say its a real button that i put on this car. You talked about acceleration. The x will hit 60 Miles Per Hour as quickly as a porsche 911 turbo. You dont want this car . Of course ill take the car. If theres a charging station near my house of course ill take it. Thats the other problem. Ill take it if you want to get me something for christmas. Yeah, sure. Im just saying. The question for you today since were on this transport theme with diesel in the dull drums are you ready to get you enthusiastic about going electric . Email us worldwide cnbc. Com and find us on twitter of course and our personal handles are across the screen for you. Lets move on. The supermarket expects full year pretax profit to come in ahead of consensus despite posting a negative retail sales in the Second Quarter. The turnaround strategy is progressing well despite a Challenging Market and thats very interesting. The fact that sainsbury does so well against the other big three. They have been out performing the other big four. Theres intense competition from aldi but sainsbury has been gaining share in terms of the market up 0. 9 in sales into the 12 weeks to september 13th where sales actually were down during that period. Its a brutally competitive sector and theres no inflation in the u. K. So its very very tough to push through any price increasing. Also in this environment because it is so tough as you mentioned, as competitive as it is that, you know, any sort of positive news has taken very positively by the markets. Were looking at 7 straight quarters of underlying sales. The bounce back were seeing in the shares today, last time we checked 12 . That speaks volumes. Its been such a beaten down sector. Shares down 13 over the last 6 months and closed yesterday at 229. This morning at 256. Aldi is getting more aggressive. Theyre planning to move into Online Retailing next year so the competition season going to let up. Must be tough going up against them. But what i am looking at is even though it might come ahead of their forecast theyre still making less money this year than they did last year so it shows me how competitive this market might be. Costcos 4th quarter profit rose 10 and beat forecast but lower u. S. Fuel prices and the strong u. S. Dollar hurting its sales. Same store sales down 1 which is the second straight quarterly decline for costco so if you exclude the impact of currency and gas prices, sales would have risen about 6 . Shares trade in germany in advance today. Lets talk about this Police Cruiser that got itself in a sticky situation when honey bees swarmed all over it. Thousands of them made a beeline for the car. The deputy took the video from inside. Some motorists were running into bees half a mile away. Wheres winnie the pooh when you need him . Up in smoke, Japan Tobacco shareholders are wincing as it agrees to pay 5 billion for international assets. Well look at the other keycorp rat stories of the day. That comes your way next. A september to remember. Global stocks on track to lock the First Quarter in four years but the pain might not be over as data suggests today is historically the worst day of the year for u. S. Equity markets. European stocks trade higher with autos driving the gains. This as china revealed its halved its sales tax starting tomorrow. Investors cheering a positive outlook from sainsbury after the u. K. Grocer will beat profit forecasts. Russia approves the use of military force abroad in a move that could pav