tv Worldwide Exchange CNBC August 24, 2015 4:00am-5:01am EDT
hi, everybody. welcome. you're now watching worldwide exchange. >> i'm seema modi, good morning to you. >> the global market selloff accelerates. everyone is trading in the red. >> this after another ugly session in china where the shanghai composite posting its biggest one day fall since 2007. investors reacting negatively after beijing holds back on a rate cut. oil hitting a fresh 6 1/2 year low with wti below the $40
mark. pressure is being put on the gulf markets. the oil decline in china woes also hitting emerging market currencies. the russian ruble nears a 2015 low despite efforts from the government's stemming its fall. hi, everybody. good morning. glad that you're joining us today. you would have seen on "squawk box" that we opened in substantially lower territory. three minutes into trade this morning and many of our european equity markets off somewhere in the region of 3 to 4%. the selling continuing today. a lot of nervousness back in the markets despite the fact that we're looking at an august lightly quit at this season. supposedly we saw the most
volume of the year on friday's close with all of our indexes in severe negative territory on friday's session. over the weekend, a lot of people, they were assuming that the pboc in china, that they might do something to stabilize their markets there. they might inject more liquidity, cut the rates. they didn't. some of what we were seeing this morning is they were hoping for some kind of china move. whether or not that's the case, whether or not it's all down to china. we'll be discussing that within the next two hours. the stocks at 600. lower than 3% on the screen. we've been open for around an hour's time in europe. this is what we're looking at so far. all of our sectors trading in negative territory. off by 5%. bearing the brunt of the nervousness with exposure to china being the world's second largest economy, the world's largest metals consumer, that's a worry. people selling out of basic resources. oil and gas off by about 3%.
the big move in wti remember after our session, we saw that dip below $40 a barrel. we haven't seen that for quite some time. so all of our sectors negative territory. the best performing sectors off by 2 1/2%. quite a lot of selling this morning as said. let's move on. let's show you the stoxx 50. this is a one week chart. this move to the down side. real correction territory is what we're looking at. many stocks towards bear market territory. correction territory when you're seeing an index or stock move, seeing a 10% move to the down side, that's what we're seeing here in a lot of the main european equity markets. the ftse off by 2 1/2%, the dax,
the cac 40 off by 2 1/3% and the ftse off by 2 1/2% now. when it comes to commodities, always helpful to see what the commodity prices are doing especially given the selling that we're seeing in some of these commodity led products. wti crude off by some 3%, 39.34. as i said, below the $450 a barrel. brent crude is off by 2 1/2%. spot gold saw an astounding run, a push to the up side. we haven't seen that for a long time. rejigging to be selling lower by .2 of a percent. we'll talk about whether the safe havens exist or whether or not we'll get one of these, throwing the baby out with the bath water scenarios. so, seema, a lot of red on our screens this morning.
we're going to be very market focused today. >> absolutely. it was an ugly session in asia. the shanghai composite closing down 8 1/2%. its biggest one day percentage fall since february of 2007. this after beijing failed to deliver a widely expected rate cut. instead, authorities move to allow pension funds to invest in the stock market for the first time ever. let's get the word with the slatest on today's trading action. >> good morning to you. a black monday is how they're calling it. this isn't me who's calling this phrase. this is official chinese state media. that give you an idea how ominous this selloff is. i'm looking through the perspective of the shanghai composite. this is red for 2015. great china markets are all now officially in a bear market. as you quite rightly pointed
out, it was the absence of any policy support over the weekend that really disappointed the market. so it begs the question, at what point is this going to capitalize a policy response, what form will it take? the sense that i am getting is that we cannot see an ordinary response from the authorities. it has to be something extra ordinary. there is a sense, louisa, this is going to be a defining moment, a real test for the pboc. we need to see "shock and awe." we need to see a draghi moment. we have seen no shortage of intervention to stabilize the stock market as well, but there's been quite a lot of misallocation of skap tall. if you talk about the rrr, for instance, it has to be focused and benefit the smes for it to really have a beneficial effect
in the real economy. i wanted to flip the boards and show you the fallout in the currencies as well. it wasn't a pretty picture. especially those currencies linked into the chinese dollar. aussie dollar got hammered. i keep going on about this, the malaysian money is bearing the brunt. we're down by 1.5%. this is where it stands right now. the other factor here is that the central banks for its reserves are dwindling. if we drop to around 50 billion u.s. dollars in reserves, that is the real crisis level. at that level, louisa and seema, back in the 90s that is when malaysia imposed capital controls. very deeply negative picture here. the ball is firmly in the court of the pboc of the central
banks. that's where we stand now. back to you. >> sri, good to see you. back to you. joining us with the latest out of asia where, again, a lot of selling has been taking place as he was saying. glancing at the futures, the u.s. futures and what we're seeing. we're being called negatively substanti substantially lower. the nasdaq called off 132 points, 133 points. implied open, s&p 500 down. dan, good to see you this morning. >> good to see you. >> first of all, i want to start with the point that sri was making. he said, some people are calling on china to come in with big decisive moods, whether they cut rates, come in with stimulus, this needs to happen to stabilize markets. they've done it in the past. they should do it again. should they? >> i think it's possible that
they'll make a move. whether it will be quick enough remains to be seen. there's still enough fuel in the ammo box for the pboc. the americans and the european union have already done everything they can do. we should remain confident about what can be done in china. it may be a comment from china, the ecb or the fed that triggers a turn around. if you got a sense the interest rate hike was being put off, that would improve sentiment in the markets. >> a precipitous fall, the shenzhen comp down 7%. what else can they do to stimulate the economy. we saw them move and it doesn't seem to impact the exports yet. on the banking side, do you think a rrr cut could improve
the lending side? >> does the money go where you want it to go? hopefully the allocation of capitol will get a little bit more efficient. it's a good point you made of the currency. the interpretation the markets have had about the devaluation of the yuan has spooked a lot of people, it's been a big change, but it's a good thing. you have an appreciation of the yuan. if the chinese a 00 economy is slowing, we're allowing that to happen. we should be encouraged by the devaluation. >> is this really about china? the correction today, it happened 2 weeks ago. it brought the devaluation to
3%, something like that. i look at what's going on, the china story, we're used to these numbers, whether they're 6%, 7%, maybe 5 1/2%. does it make that much of a difference to us? >> i think you're right. i'm trying to find the exact cause in terms of whatever you might see for correction is tricky. the point to keep in mind is we know we're in an environment with heightened volatility. whatever the cause may be is not necessarily unimportant but you should know that's going to happen. we're not so surprised. i think the point to keep in mind is we don't see this as a fundamental change. we will have a turn around. we don't see a bear market in equities. >> we're beyond 10% now. you don't see 20%? >> no. no. we certainly -- recovery. think back to what fundamentally drives stock prices. corporate earnings. gth dp develops markets. developed market economic growth is still solid.
3% in the revision for u.s.gdp, those are good numbers. that will translate into corporate profit. >> it's nerve racking to watch $1 billion vanish in two days. does this signal to us investors are okay booking profits sitting on the sidelines while the fed policy and the china market works out? >> we're near that point. you don't want to be early trying to call when the market volume is going to come. we're seeing a turn around with people with big profits who have better valuations across the board. it is a time to sit back, look at where do you see the growth, what are the relative valuations and i think moving into those markets when you do see corrections of this size? >> where would you put the money? is it gold? gold hit a six-week high and today not getting too much love. >> i think it's going to be again focused on developed versus emerging. ee emergencying look much more attractive but there are more
head winds ahead. maybe a little early for emerging markets but developed, solid growth. better valuations than we had a couple of weeks ago. europe still looks good. i think it's a matter of checking the equity allocations. >> you were with us here for the start of the beginning -- from the start of the show, so by all means get involved in the conversation. send your e-mails through dan worldwide cnbc.com. find myself on twitter. good to see you. >> good to see you. good to have you back on the show. i hope it's not an omen. >> not at all. >> the bond markets, we've been seeing a little bit of buying in some of these safe havens. seema mentioning some of these safe haven, quote unquote, trades. u.s. you're seeing some buying,
germany. a yield below 6.7%. a bit of buying there. incidentally i was checking a while ago that we're seeing some selling taking place in the periphery market bonds. italy in that portion with a yield of right around 1.8%. periphery selling. the fx, it was interesting, hello, euro dollar, back up at 1.1485. significant moves we've seen. where were we on friday? >> under 1.10? >> something like that. massive jump on friday. further here in today's trade as well. dollar yen a bit lower. aussie dollar against the dollar is off. >> a big market show coming up. fixing up financials. we delve into the world of distress assets with j.c. flowers as opportunity blossoms.
welcome back. the dow dropping 520 points in the session on friday. it's the biggest one-day decline in four years. the dow is now in correction territory along with the nasdaq and the small cap index. the russell 2000. meanwhile, the vix had its biggest week ever up to 11990. some other market facts that we're going to toss out to you. friday was the biggest volume day of 2015 with 10.5 million shares traded. dow components lost $338 billion of market cap last week. that's roughly equal to exxon mobil, berkshire hathaway or microsoft. ten dow stocks are in bear market territory which means 20% below their recent highs while 12 stocks are in correction. now after last week's market route investors are wondering whether the economy is strong enough to withstand a near term
fed hike. senior economic reporter steve leaseman looks at the issues at play. >> the two that the fed says are job growth and some improvement in job market and the second one being confidence inflation is moving back to 2% but the third one is a little diceyer, which is this issue of can the u.s. economy withstand at the moment a normalization process? as you know, what markets do is they discount future events. what they'll do is bring future interest rate hikes forward into today's reality. so the fed is not gauging the u.s. economy based on the single quarter point. if that were it, they would do it. if markets didn't look at the future, that wouldn't be a problem. we both know that's not how it works. the yield change will change and the hikes will be higher than the fed wants. the concept of can the u.s. economy withstand normization,
that's what they're waiting for. >> larry summers said liftoff in september would be, quote, serious error. in an op ed for "the financial times" he cautioned against hiking rates before 2016. summers says tightening in the near future would push down future rates and would impact employment levels. daniel with us still. there is mounting speculation that the recent market turmoil will push the fed's rate hike to december or 2016. what are your thoughts? >> think about the different conversations that the fed has. on one hand with growth in the u.s. solid but not so high above 3% that they need to hike for that reason to start on growth. that would suggest that they could hold off. inflationary problems lower because of the falling dollar. one of the criticisms with the lower rates was it was starting
asset flows. they were chasing higher yield. that's not so much a problem anymore with retentions we've seen out of those types of funds. it does suggest they can probably afford to wait. i think they'd rather be a little bit late than a little bit early. >> if the fed waits until december or early 2016 because of market volatility, doesn't that actually tell us the central bank is not data dependent? they're keeping into account these external factors? >> i think the one data point that would change this calculation is anything on wage inflation. if we do get this 3.2% print for u.s.g.d.p., that's stronger than we've had. unemployment coming down. if we saw anything indicating wage inflation was starting to pick up that might override eight lot of these considerations. that's the other thing they have to keep in mind besides gdp growth. >> when do you see inflation rates changing? many say the central bank is not going to hit the target of 2%. >> certainly on the headline
inflation number. it's what the pass through is into overall core inflation is not quite so clear. core numbers most recent was 1.8 for core cpi. don't know that what's happening with oil is going to feed through to that. get back to 2%. if we get to 2% inflation that's not a place where the fed needs to raise rates. >> as you point out, a big part of the inflation picture is oil. wti crude below $40. what is the main catalyst behind the drop in oil prices? is it china or the u.s. dollar? >> a lot of it is over supply relative to aggregate demand. better numbers out of the u.s., it's not as strong as some hoped. we're not likely to get to a 3% run rate which was the initial consensus. europe clearly not as robust as it was. you don't have quite as much demand as you expected. you have a lot of oil being produced by saudi arabia.
we have the wild card with iran. >> we've seen this picture before, dan. remember, just back in february or march of this year oil was in the 40s. then we saw the astounding move to the up side but, once again, we are trading in the early -- what was i trying to say, the low 40s that is. do you think we're in for a turn around at some point? >> more than likely if you look at the future prices, a year out it's around 47. it does seem that the market is pricing in a recovery. we'll work into balance of supply and demand that we have, better growth and also depends what happens with u.s. shale. we expect to see recovery. oil won't fall to $30. >> the gartman letter, goldman as well. it's hard to tell what it is that's driving everything right now, right? when do you know when you get in and when you start to pick some of the lower hanging fruits? >> well, i think our suggestion
would be trying to call when the bottom is. you probably rather wait and see that the turn around has started. it's okay if you miss the first 5% instead of the risk of picking up another 10% loss. they'll want to invest, wait a little bit longer when we do see the bottom and the recovery starting to take hold. then that's a time to take hold. i don't think people should be over eager in this market. >> how much are we trading on interest rates differential? is everything in one basket? >> certainly for europe and the u.k. seems relatively stable. the key variable remains the fed. that's the one that is the tail wagging the dog as it were. i think it's indications, nip indication from the fed about a change in their views, comments from the governors could have a big impact on sentiment. >> we'll talk a lot more about the fed in this show. dan, thank you very much. how would you describe the recent price action? which word would you use? and what are you doing? i mean, if you're holding a
portfolio out there at the moment, how do you view the action that's taking place right now? you might not be happy if you've been long equities heading into this. >> right. >> we're constantly moving back and forth here. let us know. you can join us on the worldwide conversation by e-mail worldwide @cnbc.com. find us on twitter, @cnbcwex. @cnbc or @louisa. >> talking about how the fed looks dangerous. mistake if they do hike? there's no real reason why this should hike. do you think a september hike is off the table completely? >> it's getting harder to justify, a compelling reason that they're going to take the risk. i think it's waiting. unless you see a sudden turn around in oil which they're not
suggesting, that's a good thing for the markets. >> which should lead to more buying room? >> that's what you're waiting for. starting to see people taking advantage of the opportunities that this type of change has opened up. >> you know, they said something interesting last week. they said the volatility that we're seeing is normal. the real surprise should be if we didn't see volatility in front of the impending rate hike. that tells me we shouldn't worry, this is normal. >> not just volatility in the equity markets, vol la timt at this in the equity and bond markets. ahead of fed hikes you get this type of heightened volatility. what people need to keep in mind in front of that type of market, know where you want to invest, have your allocations in mind and then when they open up, move in. >> do you have a top trade for clients this week? as clients are trying to figure out what's happening in the markets?
>> the cyclical sectors, suffering tech are the ones that are more likely than not to rebound. i think you should think about the cyclical sectors in the countries that have solid economic growth, maybe perhaps a little less trade dependent. >> you said tech? >> yes. >> i'm interested to see what the selloff in shares means in the private market. we've been discussing high valuations. you wonder if some of those valuations will be repriced. we'll discuss that. >> this spurs another round of m and a. >> perhaps. >> daniel, thank you very much for being with us this morning. >> daniel morris. coming up on worldwide exchange, special market coverage. plus, turkey preparing to hold snap elections our next guest says. political instability may not be the biggest threat to the country. find out what is after this break. they could have little to go on.
after bay shipping holds back on a rate cut. the slide is putting renewed pressure on the gulf market. the oil decline and china woes hitting emerging markets. the russian ruble hits a low despite efforts from the government to stem its fall. hi, everybody. welcome back. if you're just joining us, the european markets have been open for an hour and a half, the equity markets. they're all trading in negative territory. it's off somewhere in the region of 3% at the moment. three minutes into trade we saw them off by precisely 3%, 3.5%. we're still looking at a significant selling taking place this morning across the board following a very tough market that we saw in asia overnight as well. the asian markets. >> precipitous fall in asian stocks overnight as you pointed out, lou.
the anything kay 225 down better than 4%. the sheng shenzhen composite down 7%. volatility continues. commodities a big part of the story. >> huge part of the story. we're seeing significant losses in commodities as well. wti crude hanging on below the $40 per barrel mark. we went through $40 in friday's trade. brent crude off by almost 3%. spot gold seeing a significant bounce last week. this morning just being sold back a little bit but that safe haven trade may be coming into play. sometimes the baby is thrown out with the bath water and that seemingly was the case with gold until last week where we saw a little bit of repositioning. copper off by 1.5% this morning as well. very broad based. now when it comes to some of the
other things that we're looking at, shell, they're saying they'll be considering investing in iran's energy sector as the country looks to boost output. speaking to reuters, the vice president for a new business development also said shell will repay $2 billion debt to the national iranian oil company once sanctions on the country are lifted. >> now the middle eastern stock markets, louisa, continue to plunge due to sliding oil prices. wall street's sharp losses and the fitch rating. dubai featuring the biggest one day fall since december and continues to sell off. meanwhile, saudi arabia's benchmark index has fallen 18% this morning erasing $75 billion in market value. here's a look how the prices actual actual actually fared in trade. meanwhile, the russian ruble also weaker falling below 71 per
dollar for the first time since the end of january. this as the russian government says it's preparing measures to boost foreign currency sales. the malaysian ringet is at a 7 year low against the green back. the indian rupee, we got some flashes from them saying the factors are external. he says expects markets to settle down. the reserve market is watching it closely. they say the yuan devaluation may have transient impact. the steel players who had high exposure to china have been selling off over the past two days. lou? >> hadley gamble joins us to talk about what's happening in the middle east. big corrections there. even places like dubai -- >> they're downgraded.
>> exactly. >> worried about saudi investors pulling their money out. they're a bit more vulnerable. for saudi arabia, it's quite worrying. there is a cloud of doom settling over the saudi economy. not sure if it's quite that bad. we have low liquidity. everybody is out of town. there is panic over oil prices. the question is what they'll do over the long term. unfortunately as we've tended to see with saudi, nobody is coming out with a plan. >> a big correction we've seen in dubai as well. that's worrying a lot of national investors. the big construction companies trading significantly lower. it's across the board in dubai. >> it is. there's question of what these governments are going to do in terms of getting this market back on track. one of the questions is about the value added tax. there's a big movement in the gulf countries to talk about
taxation and subsidies. i was speaking over the weekend and they said there's no way one country can do it, all of the countries have to do it. that brings us back to the conversation of a gcc currency. there hasn't been a movement on that. how quickly they would move to do any of these things is anybody's guest. >> hadley, let's focus on the turkey story. turkey's erdogan has announced snap elections. hadley has been taking a look at what this means for the turkish economy. here's her report. >> well, another election could mean a boost in seats for the turkish president's a.k. party. it could come at a cost to the country's economy. a decade of at times phenomenal growth is over and continued political volatility in a time of war has investors nervous. >> doubled wages since the '80s so forget all of the political shenanigans. the reason turkey is in trushl
is because of that giddy mix. who's taking that on? the lira is. turkey is confirming to what turkey is. collapsing currency and very low productivity. the dream has unfortunately -- that's what he's most guilty doing, forget all the rest of it. the great hope that turkey represented, young populations, vibrant populations, entrepreneurial mind set. >> today the turkish lira is the worst performing market currency with the exception of the brazilian real. it hasn't stopped the lira from the slide. and a continued dependence on foreign cash in flows means the country remains vulnerable to external shocks. >> all policy makers are doing is they're a us jing liquidity
that might be generic in growth. for me that is broken. it doesn't work anymore because when you are increasingly quit at this and you're creating more investments, if people cannot buy stuff, you know, those investments are worthless and that's what is happening to emerging markets. in ee emergencying market we're seeing all the investments that have been done in the last ten years have not generated any earnings which is why now emerging markets is close to a day of reckoning. >> all this as president erred d erdogan looks desperate to regain political momentum against the back drop of security threats and increasing isolation. for cnbc news in london, i'm hadley gamble. >> hadley giving us that report. she's here on set still as well. let's bring another voice into the mix as well because michael harris is here as well.
global head of research. what do you make about the scenarios that we were looking at? what do you make of the election that just took place and how inconclusive this was and where this leaves turkey heading into new elections? >> it wasn't inconclusive. it sent a clear message that erdogan cannot take the country where he wants to take it which is constitutional change so nothing's chakds there. a new election isn't going to change his ability to get 50%. he's fallen well short of that. he needs 50%. taking a step back, that's a fundamental positive. that's why you don't where worry about turkey falling. there's no reason they shouldn't have formed a coalition. in the 1990s we had terrible election outcome after terrible election outcome. they saw fit to form a coalition. this time the party is
strategically making a mistake. the drivers remain to be seen. it's a risky time for turkey to be without a government when the fed is going to be hiking rates for the first time. >> how are these political woes impacting turkey's plan to turn around its economy. in other words, is it even possible to see a stabilization in growth and in its current regime for clarity at the top. >> november we'll have the election. once we have the election if we go through this again if it confirms the existing reality, hopefully they'll see the light and say we've got to deal with this. we can't gamble with another election. they'll end up with a coalition in 2016. a lot of time lost between now and then. in the interim, confidence is important. there's a lot of skepticism over turkey's ability to grow. i don't think turkey's problem is its ability to grow. it's always been that it's grown too much. one thing to mention is that turkey is one of the world's biggest beneficiaries of falling
oil. they still have a current account deficit that's why they need confidence to be retained. if confidence is there, they will be able to fund their growth. that's what we've lost. we're in a confidence vacuum. it will be sustained until elections have run their course. that's why in is risky. turkey could have been at a turning point. had they formed a coalition last week we would be talking a very different scenario. unlike the countries reforming, countries need self-help. >> given that need for reboost in confidence, you have to wonder where erdogan's head is at now. he's basically come out and saying the system in this country has changed. the president is now the de facto ruler. no longer symbolic ruler. he didn't get that majority. probably not going to get that majority. where is his head now? essentially he's making a lot of noise, fighting a war and they're going after the kurds.
is this a situation where you make noise here so you don't pay attention to this? >> if we're thinking of the political ramifications, there are a lot of reasons geopolitical driving what's going on with the kurds. northern iraq is an enormous asset for turkey if the kurdish situation is stable and if they don't have an outlet to the sea. that's why they were worried about what was going on in syria. there's a geopolitical driver and tactical driver. if they want to go for elections because i don't understand and my guess is they'll do a little worse, they probably thought the only party they can gain votes from is the mhp which is the nationalists. you play an aggressive militaristic fight. the ach party is driving the peace process. it's tough to disassociate themselves from that so quickly and such a short window. the mhp unless they play their
cards wrong should be the beneficiary. that's where it's perplexing. >> michael, thank you very much for joining us this morning. michael harris. global head of research. hadley, thank you to you as well. hadley gamble joining us here. one of our own. >> absolutely. let's get you caught up on the greece story. greek opposition leaders made minimal moves. demands continue to grow for elections as soon as possible so the next government can focus on the country's economic and humanitarian opportunities. zip pris is trying to move. >> keep them coming, good old-fashioned e-mail. worldwi worldwide @cnbc.com.
cheryl made a good point about oil prices. we love low oil prices. why are we so worried? >> they like it. the only thing is economic data shows the consumer is still not showing more despite lower gas prices. we need to see it feed through. >> bring up this point with some of our future guests. now you can also find us on twitter of cours course @seemamody, @louis@louis. >> it's a very interesting day. how are you positioning yourself given the market volatility? we've seen in asia, europe and now the dow is pointing to a triple digit down turn. now recasting podcasting. do you even know what a podcast is? have you listened to one? i know, i've listened to some of it in the past but not for a long time. we speak to a swedish startup about the revival of podcasts and its revenue potential.
we'll be back in just a couple of minutes. you're watching "worldwide exchange." thankshow may i help you?s list. i heard i could call angie's list if i needed work done around my house at a fair price. you heard right, just tell us what you need done and we'll find a top rated provider to take care of it. so i could get a faulty light switch fixed? yup! or have a guy refinish my floors? absolutely! or send someone out to groom my pookie? pookie's what you call your? my dog. yes, we can do that. real help from real people. come see what the new angie's list can do for you.
unarmed a gunman. stefan joins us from paris with more. good morning, chef fan. >> reporter: good morning, louisa. they'll receive the highest honoraria ward. they stopped a gunman on a high speed train between amsterdam and paris. the u.s. ambassador to france will take part in the ceremony today at the palace. in the meantime, in france the speculation and debate continues on how much resources we should put on the attack. according to a french man, the 26-year-old man who conducted the attack on friday was registered by services in france and spain. he was considered a potential risk to the national security in france, he wasn't monitored by the police on a day-to-day basis
so it's fueling again the debate in france on how much resources we should allocate to anti-terror action and also on the back of this new attack there is a debate in france on how we should protect public places, including high speed train. as you know, we've got plenty of high speed train in france but only the one link between france and united kingdom are screened for security, passenger and will you go gauges. back to you. >> stefan, thank you so much. moving on. talks between north and south korea extended through the night and into monday morning in a bid to extend the talks. north korea, however, has denied responsibility for the lines which injured two south korean soldiers earlier this month. now looking back at the market selloff that we're in the midst of.
all sectors in the s&p 500 are being hit very hard by this market selloff. energy is in bear market territory now. down by more than 35% from the recent highs. you can see energy over there in the corner down by 34.5%. then you have industrial materials, telecom and technology. materials industrials off by 17, 11%. telecoms off by 10.5%. information technology down by more than 10%. definite correction territory. financials and consumer staples, they're still down by over 7 and 6% respectively. utility is off by close to 10% when looking at some of these sectors. consumer discretion is off by 7.5%. health care 7.5%. financials, similar story. consumer staples off by over 6%, seema. >> there is one sector that's fallen victim to the broader market selloff. that will be technology.
40% stocks in the tech sector are in bear market territory. that is 27 out of the 68 companies. further, 25 companies in the tech sector are in correction territory. in total, 76% of the sector is in correction or bear market. that's a lot of names. i just want to point out that when you look at all ten s&p sectors, technology has the highest exposure since it makes most of its revenue outside of the u.s. on the currency front many analysts i speak to say that makes technology more vulnerable going forward. >> i wonder how much is psychology as opposed to fundamentals because the u.s. data has been strengthening slightly but it's heading in the right direction. the jobs, all important nonpharms for the last umpteen times. you're continuing to see significant recovery. a lot of companies are cash rich, too. it's a slightly different story in europe where some of the manufacturing stories are quite weak and some of the consumer
services data has been a bit weaker. i wonder how much is psychological that we've seen a correction. people don't want to be called out if we're heading in a slightly more dovish fed reading than had been anticipated. >> i want to point out that historically speaking when the fed does raise rates in a rising rate environment, technology is actually one of those sectors that typically outperforms. that's why this also is interesting to see the selloff in the sector when history has shown us this is a sector that does well. >> i'm thinking about the dollar impact in all of this. you say historically with the fed. i'm looking at research. get it back out again. it was somewhere here. looking at some research, here, kathleen brooks sent out an e-mail from fx dolt com. they're talking about what a fed rate hike means for the dollar. it turns out when looking at all the previous hiking cycles in
'87, '94, '99, 2004 that the dollar does different things each time. >> sure. >> i wonder about the positioning, we've had a big move up in the dollar ahead of the prepared rate hiking cycle, right? and how much of that is filtering through as well? >> stronger dollar not great for emerging markets. on that note, the bombay sensei indian market feeling the pain. it is extending its losses. the s&p down better than 4.5%. this is as the finance minister tells investors that the volatility we're seeing is due to external factors. he's closely monitoring the situation and the fall of the stock market and also watching the currency. he says expect the market to settle down and that, again, the rbi is watching the situation closely. again, we are feeling the pain not just in dmien but in india and the broader emerging markets. okay.
cereal became the most downloaded podcast in history last year in what was seen as the revival of the podcast technology. 10 million podcasts are streamed and downloaded. the swedish startup called acast is looking to shake up the podcast industry. joining us is carl, the founder of acast. you join us on an interesting day. >> thank you for having me. >> this is an industry that's interesting because it's picked up so very much over the last recent couple of years. tell us a little bit about what acast does and the revival of podcasts. >> acast is revolutionizing category defining podcasts. two years ago we started to research podcasting in sweden. something happened at that time. we could see that everything was broken in the ecosystem. this was very interesting. we started to look into that more deeper and we saw that this
was an untapped mass media which we started to build a new ecosystem for podcasts. >> cereal really put podcasting back on the agenda. how have they revolutionized the podcasting industry and can you jump on the back of this? >> we could see this in sweden happening two years ago but thanks to cereal podcasting really had a growth in the whole of europe and the u.s. serial should be a platform, they would make 10 times more money. >> how important is apple to your business and your growth strategy? >> i mean, apple is very important for us, but they -- we are another business. apple is more collecting our access fees and we use apple because we can distribute
advertising through apple system and itunes. >> we've been watching the steep decline in tech stocks. that's been prompting questions of whether this will lead to devaluations as a startup does that worry you? >> no, not at all. >> not at all? >> no. >> but are you getting the type of valuations and the financing you need to grow your company? >> yeah. definite definitely. we need to do another finance round in the beginning of q1 in 2016. >> and the ad model is intact as well? >> yes. i mean, advertisers can really benefit on acog platform with dynamic advertising. >> all right. carl, founder of acast, thank you for joining us on "worldwide exchange." want to get you caught up on the global stories out of china. downward pressure is becoming more obvious and that china's economy is still facing many difficulties and challenges.
the top planning agency says expect to achieve full year main economic targets but says to keep economic growth within a reasonable rage. those are the comments coming from china. this as the shanghai market sold off. the sheng high composite losing over 7%. >> keep your e-mails and tweets coming through. worldwide @cnbc.com, twitter @cnbc or @louisa. podcasting is a very hot trend in digital marketing almost as big as webinars. still to come, a number of sectors lurching towards bear territory. we'll discuss that coming right up.
it's a big market day. welcome to the second hour of "worldwide exchange", everyone. i'm seem na modi. >> i'm louisa. these are your headlines for around the world. no reprieve for investors. another ugly day on wall street. in europe every sector is in the red as basic resources lead the declines. now this happening after another selloff seen in china with the shanghai composite hosting its biggest one day percentage fall since 2007. investors have been reacting negatively after beijing holds back on rate cuts. oil hitting a fresh low and