Mario draghi hinted that largescale quantitative easing may be the way because of the risk of deflation. Bond yields are falling in italy and spain as a result. Former new york governor mario cuomo died yesterday of heart failure. He was 82 years old. He was elected governor three times and he had a memorable speech at the 1984 democratic and that this convention and many thought of him and higher office. Many believe the wagon train will not make it to the frontier unless some of the old, some of the young, some of the week are left behind by the side of the trail. From that, he was considered a likely president ial candidate twice but decided against running. Once he declined a plane took him to New Hampshire to take into the New Hampshire primary. Bad weather is slowing down the search for wreckage embodies in the air asia crash. Search crews in the java sea are using sonar and ping locators to find the blackbox and flight recorders and 30 bodies have been found so far. For the second year in a row, pimcos biggest mutual fund trailed the majority of its peers. The fund returned at 7. 4 of her missing a rally in long return bonds and guessing incorrectly that inflation would rise. Bill gross quit the fund but promised it would do better last year. It will be our gun versus ohio state in the First College football playoff final. Ohio state earned his ticket with a surprise win over alabama in the sugar bowl. In the rose bowl, oregon pounded florida state. The championship game is january 12 in arlington, texas. The euro is way down, falling t in thinking that mario draghi will do quantitative easing but equities are set to start the year on a positive note. It was a pretty strong 2014, stronger than what many strategists had expected. December was a downer. Let me kick it off with the managing editor of bloomberg markets. Here we go the euro is interesting as its falling after Mario Draghis comments. Everyone expects the ecb will do some sort of sovereign qe. Will it do anything . That is the big question. No one really has any idea. Everyone thought they would do something this past year. They will do something and expand the mushy but will there be any effect . Bond yields are already incredibly low in the euro zone. The euro zone broken and has problems and distinct ways and its not clear that the ecb has the tools at its disposal to solve the problem. They will clearly try more and mario draghi will purchase more assets but one of the Big Questions this year will be will it have any effect . As we saw with quantitative easing in the u. S. With the fed, it made giuseppe asset prices . It may but asset prices and much of the u. S. Has not been that bad despite the bad economy. Maybe there is so some hope that the weakened euro will help exports. I think the expectation is that will only move the needle so much. What you want to see is accelerating bank lending and credit begin to flow. It seems like there are so many structural issues that remain in the eurozone. In the u. S. , strategists last year were saying not to expect that many gains. They say we might see singledigit gains and we were up 11 . What are strategists saying for this year . There are basically no bears. Most people are expecting further gains. The other interesting thing the real surprise of 2014 yes, the stock market exceeded optimistic expectations but the real shocker was how good bonds did. Almost no one going to 2014 predicted a huge stock rally in a huge bond rally. The predictions for this year our stock rally but bonds are expected to fall again. Which is the same prediction that bond strategists have been making for years. Nobody is predicting a big stock rally and a huge bond rally again. Surprisingly, the big bond rally did not really help pimco at all. It helped them a little bit but they were still not able to outpace their peers. Will the fed really raise Interest Rates this year . They might and it still might not help the long end of the curve. You still might not bonds could still rally. 2014 was a year in which the market brought forward us expectation of when the first rate hike would be. There was no selloff in bond so maybe the fed will raise rates late in 2015. But thats no guarantee that the 10 year will sell off. We are living at amazing times, thank you so much. Joe will join us later because i note you will defend your big call in 20 15 where you say wage pressures are finally going to pick up . Yes. Moving and shaking this hour, economist and bestselling author Thomas Picketty says france should focus on reviving Economic Growth instead of handing people like him awards. He urges progressive taxes to reduce income inequality. In corporate news, new years eve marked the biggest uber night ever are did it deter customers from riding . They have not released released official stats but we crunched some numbers to find out what went down on new years eve for uber . The early reports suggest that may have been a sleepy new years for uber. I took one this morning and my driver said it was kind of a boring night. If new years eve is their biggest day of the year as they say, it it was still there biggest day ever and that just because of the Companies Share growth. At the beginning of last year they were operating in 56 state to cities across 29 countries and were valued at three pint . 5 billion. They are now into under 66 studies across 53 countries and valued at more than 40 billion. It was a massive year for uber. Because of the additional markets they are in four times as many markets and we can assume that even if it was not as big as they thought, people thought this might be the 100 million mark for uber even if it wasnt, it was there biggest night ever. So what is in store for 2015 four uber . They need to address their Corporate Culture issues. They have had setbacks in the last year. They also have legal battles to fight from stockholm to the rest of the world involve licensing and purse permitting issues and they are being sued for a lack of transparency regarding driver background checks so they need to be more transparent. The big thing everyone is excited about is a possible idea. Some investors say if they continue to grow at their pace they have an growing, this could be a 100 billion ipo. That is twice as big as alibaba. Nobody knows of that will happen this year but thats one thing topping everyones wish list for 2015. Im sure bankers are lining up for that, thank you so much. Speaking of the new year, its time to break out resolutions and predictions for the coming 12 months and we have a handful of bloomberg regulars to put their money out there. I say oil will not go down to 40 per barrel. I would say the first consideration is money. I think european fixed income is where the opportunity is. If you are a contrarian investor, you have to have gots. If you hedge the yen, that might be an interesting place to be. Emerging markets look like they will have slow growth but they are the bargain area now. Real estate prices in the global gateway cities in the u. S. Will continue to increase. The residential marketplace in new york city may change itself and face increases. In the m a market, it will probably be a record year. I think the United States will still be the safest place to put your money. This is where i put my money. There you go much more ahead when it comes to burgers, mcdonalds will have will let you have your way and they are trying to reverse falling sales as it gears up for a pretty big 2015. Remembering mario cuomo, we will talk with congressman Charlie Rangel about the former new york governor who away yesterday at the age of 82. Youre watching in the loop. 2015 could be a big year for mcdonalds as ceo don thompson tries to turn around declining sales in the companies fake food image. There was a quiet opening of it store in australia. The restaurant chain is going to be doing a lot of experimenting. The corner is part of mcdonalds Customer Learning Lab. 10 of them are planned to open this year. We have the professor of marketing at the university of pennsylvania and joins us now with more. I dont know if you heard about this socalled restaurant called the corner but nary a big mac can be found at a restaurant like this. Its about healthy food and as guest spot show and organic products. It has gazpacho. Mcdonalds is been trying to get healthier for years, right . They have an good morning. Good morning. What do you think of a Customer Learning Lab like this . I think its a great idea. With what we see happening online with these Companies Selling things online they are constantly doing experiments. My understanding is that amazon does experiments all the time. When you are not online and you are a regular store like mcdonalds they need to have some way to experiment. They have historically tried experimenting before they introduced the mcrib and other menu items but its a great idea for them to do. They are trying to drive home the point that they have got real food on their menu. Last year, in late fall, they put out this myth busters social Media Campaign where they wanted to we will show you the campaign they wanted to answer questions that viewers at that customers had about whether the beef was real or the chicken was real. What to do think of that campaign . They are constantly under attack because they are as big as they are. They are a likely target. They had to try to address that. To some degree, it almost raises questions by being so out there and many people had not certain set heard some of those myths and they are propagating that to some degree themselves. Im not a big fan of the campaign but its good to do that online answer those questions but i dont know they need to be spreading the word either. What do you think they should be doing . One of the things that is interesting is you mentioned that they are going out and trying to do healthier food. They have been on that campaign for a while and its really difficult to change a brands image. Mcdonalds is so well locked in and it will be hard for people to view them in a different way. They have introduced salads and tried to come up with no trans fats with their french fries but they will remain the target of not healthy food almost in part because they are a fast food restaurant. The association of fast food makes image hard to change. There is lots of chatter about mcdonalds even getting rid of its tagline although the company has said they are not the im lovinit which worked for a while but they could possibly change it. They have denied it. The tagline might be changed tolovin beats hatin. I think companies go through this major effort of changing their tagline or logo and it does not have much of an impact. Starbucks had a big thing about taking coffee off of their logo. We still think of starbucks as coffee. It is not nearly have the impact that they would hope. I am not bullish and what the impact would be. Its kind of like windowdressing. The other part of their Marketing Strategy early in the year is going to be finally putting a Super Bowl Ad on for the first time. Does that have any impact . Super bowl ads have an impact because they have tremendous reach. Its not just on the super bowl but for the day after and the week after. You will have to have a pretty dramatic ad. If you just go on and have another mcdonalds ad and nothing that will get much notice or attention it will not have much of an impact other than once again, we hear the mcdonalds name out there. I know doritos was very successful with their campaign on the super bowl. Some companies have been but there is also companies that have totally failed so it would depend on the execution of the ad. Thank you so much for joining us. It was the worst year ever for automobile recalls and it ended in an appropriate manner for general motors. A bad year for google glass . Why they may be a fad since time has passed. It seems like is not cool anymore. Ah, got it. These wifi hotspots we get with our Xfinity Internet Service are all over the place. Hey you can stop looking. I found one. See . What do you think a wifi hotspot smells like . Im thinking roast beef. Want to get lunch . Get the fastest wifi hotspots and more coverage on the go than any other provider. Xfinity, the future of awesome. You are watching in the loop. Good morning. General motors has cap to the worst year ever for recalls by recalling 92000 additional suvs and trucks. The vehicles may have faulty ignition switches. Gm notified the government of the recall last week in the Auto Industry recalled more than six 3 million vehicles last year. Sony is expanding the number of ways you can watch the movie the interview. Starting today, 580 theaters will show the film come almost twice as many as before plus more payperview outlets. Dish network is signing on to show it as well. Kkr cashed in one walgreens completed its takeover of elians foods elians alliance foods. They will end up with billions of dollars in cash and stock. It is 26 minutes past the hour which means we are on the markets. Equity futures are building on some of the gains we saw last year. The s p 500 is up over 11 and we are getting isn numbers at 10 00 a. M. Eastern. December was a bit of a downer with declines a shaving off some of the rally we saw last year. We are on the markets again in 30 minutes. There is a bold prediction byebye to google glass bread last year, they were everywhere and now google has shut down its physical glass stores and people are the writing deriding them and even sergei brin was caught without them at a red carpet event. Gregg harper the president of parkervision associates, was one of the first new yorkers to own google glass. He is to come in our show wearing them. I cannot help but notice no more. What happened . I found people were in comfortable were uncomfortable when i walked in wearing them. I had it for quite a while and every day i walked down the street, people would ask me what its like. It was a conversation starter. About eight months ago, people started saying i dont know and people were feeling uncomfortable when i walked into meetings. This is the case that it comes in. You cannot put this in your pocket. But you are supposed to wear it all the time. But it makes people uncomfortable. What was it that made people uncomfortable . They thought i was recording everything. They thought i was posting to the web. You can tell that happening because it lights up but people dont know that. I explain that to everybody. I would be in a meeting with a vendor and they were a little unsure. Is this the end of google glass . This was always a prototype. Is 1700. The concept of wearables on your head for augmented reality is taking off. These areepsons version which has a cable and a processor but this means it has longer battery life but this can be used for practical applications. One of the things i saw in this is the use for general aviation pilots. Show these two sidebyside. This one folds up. This one is kind of ugly. You would never wear this in public but if you are fine flying an airplane, its fabulous. If youre working on a car engine you need help from the factory, this is great. Why couldnt google be the same way . Thats an augmented display is not the full thing that this overlays your complete vision. For example, for private aviation violets, theres a program they are testing with the faa. When you are flying a plane youre looking at instruments. You cannot see them. On the other hand, this will overlay completely and you can see the markers and directions and all the rest and it is total vision. As you turn your head, it will display that as well. Its hard to say this is the end of google glass. You will probably see a professional version of this. You will be at ces next week and you are excited about was to come but this is not the end of wearables . Not at all especially with the apple watch coming out. There will be gazillions of them. There will be at least 400 vendors doing wearables and that data will come in with sensors and go into the cloud and get process and give you results. Lets show the survey. Of the apple iphone users. Over 60 say they are not going to buy the apple watch. Because many people dont wear watches anymore. A wearable does not have to be a display device. It could track calories or youre walking or track your activity and heart rate. You dont necessarily have to have it at his as a device you wear. You have a nice display on your phone. I am not convinced yet. Lets move on to the other gadgets the bmw i3 has an active assist part of their features. You can park this car remotely or through your smart watch. What about that . I have always joked that the ces is the Car Electronics show. The key speaker on the first night is daimler and the second night will be forward. Youve got a lot of the automotive guys getting involved. The car has smarts and they are realizing that people are bringing their devices into cars so they are interfacing the Car Electronics with the phones to make it a more productive product. They look at Navigation Systems and self parking. The question is whether Consumers Want this. I have a bmw and it has a lot of these capabilities. I have the chance to customize my the factory. It really is quite helpful. Why carry my keys with me . Thank you so much and great to see you. Much more i hadnt a big moment in the jobs market happened yesterday, 29 states plus d. C. Raise their minimum wages. Will this be the start of wageinflation . 3. The minimum wage rose yesterday in about 20 additional state which brings the total to 29 states and washington, d. C. That will have minimum wages above the federal level of 7. 25. Peter coy joins us to discuss the impact. What about the other states, when will they raise their wages . And what will happen with the federal government. Federal minimum wage has been since 2009, 7. 25 per hour and present obama wants to go to 10. 10 and the propose that last your. It seems there is only a remote chance of that happening especially now that the republicans are taking control of the senate. If its going to happen, its going to happen its going to happen at the state and the music and a municipality level. Some are going into the mid teens so we are very far from seven dollars 25 per hour. What is the Economic Impact . Will this cost jobs . It cuts both ways. It puts more money into peoples pockets in the lower wage segment and its not just people at the exact minimum. If a typical employer has to raise the floor for the lowest paid workers, they want to preserve the pay ladder so they will give raises to the people above that. It ends up injecting money into the economy which is a good thing. On the other hand, it does cost some people their jobs. Some people who are worth 7. 25 per hour may not be worth it at 9. 25 or so. Its a mixed bag. The question is whats the right level and there is no clear answer to that question. Not at all, otherwise we would be at that level. Thank you so much. Lets continue this conversation and get two different takes on the labor economy and the debate on wage growth. Joining us now from vermont is dartmouth professor danny plans for our debt danny blanchflower. And we want to bring joe back because on wednesday you had said you believed last year that wage pressures will form and we did not see that but you firmly dont believe that 2015 we will get that. I am optimistic that there are a number of indicators that suggest that the labor market is getting fairly close to full employment. There is also anecdotal survey Data Companies saying that finding quality workers as far is becoming a bigger challenge and they expect to raise wages. Between the tightening labor market and the expectations of employers, i would expect we will see wage issues. Also there is the quick ratio. There are many indications there is improved labor market and laborers are becoming more confident. I believe these will build into each other. I dont expect there to be raging wage growth but after several years of very mediocre gains and basically expectations that workers always lose, i think we are due for some sort of correction. Danny, you say the opposite . I do, i have heard the same story for the last few years. We are actually still seeing significant amounts of labor markets flat from unemployment, underemployment and inactivity. There are about an 8 million drop in the size of the labor force as the economy improves. Those people will come back into jobs that will be pushed down on wages. There is some increase in the employers ability to pay. Why would we see them willing to pay extra . They dont need to. Yes, things are improving and there will be slight pickup but we are nowhere near what janet yellen talked about which was a 4 wage growth. Our earnings are up 1 . They might go up to 1. 5 so big deal. I dont 100 disagree. We will not hit 4 wage growth. That seems unlikely. You look at certain industries. You have seen articles and companies talking about the need to raise wages like trucking and construction. Housing construction is not that impressive but you see homebuilders talking about worker shortages and the need that will presumably lead to hike to wages. We dont even need to talk about engineers. Right, the story is different than 2011. We are closer by many measures to what full employment looks like. Danny is not incorrect that there are many people who have dropped out of the workforce and perhaps some of them will come back in but many statistics are closer to what we would call normal. The st. Louis fed a few weeks ago said the quit ratio is now above 2. 2 which had not been at that level for several years. Could it be that you might be underestimating the impact . I think there will be a small pickup but there is always shortages in a capitalist economy. The economy is growing a little more than it was and its taken some time to catch up with wages. There are some of those indications but i dont see wages picking up much at all. Prices are actually falling. The workers are a little better off in the need for employers to raise wages is less now than it was before the Oil Prices Fell off. In a capitalist economy, there will always be shortages and there are always anecdotes about people making more money. But the going price for it engineer is 100,000 but we dont know whats being offered. They might hire an engineer for 70,000. They could start to raise their prices. Does that mean you dont think the fed is going to raise Interest Rates . Do you think they may raise them later than what people expect . I think they are going to raise them later than people think. They will follow the data and thats difficult to know what exactly is going on but the strengthening of the dollar will have an impact on activity. Janet yellen has made it clear she is going to look at wage growth. Even if we see a pickup, its nowhere close to the 4 she talked about. I think the fed will probably be the First Central Bank to raise. All these other Central Banks will be affected by the strengthening of the dollar but i dont see a rise maybe towards the end of 2015, but not for a while. They will watch wage growth. Is that a possibility . Its certainly possible. I think its possible that we will not get a fed rate hike until late 2015. Maybe we wont get one until 2016. I think they want to raise rates as they would like to get off zero. They would like to exit the many years of extraordinary low rates and look for an opportunity to do so. They will say maybe we are not there on wages but there is clearly momentum in the economy. There is certainly the possibility they will look at Inflation Numbers and wage numbers and say there is no rush. Thank you so much. We will be back in two minutes on in the loop. As we mentioned, mario cuomo has died at the age of 82, a political legend. He was placed him a top list of president ial candidates in 1988 and 1992 but declined to run both times. His passing came hours before his son, new york governor andrew cuomo, was sworn into his second term. Johnny us on the phone as longtime new york congressman charlie wrangle. Joining us on the phone. Is longtime new york congressman charlie wrangle. When you heard the news of his passing, what thoughts went through your head . I was shocked. Most people who knew and loved mario cuomo new him as a fighter. We all knew he was frail. We talked with his wife and his sons both chris and andrew and i never knew it was that serious. It was the end of an era. Its ironic that he would leave us when his son is beginning his second term. We have a clip of andrew cuomo, the current new york governor and his own a duration yesterday. I want you to listen to some of the words he said about his late father. He could not be here physically today my father, but my father is in this room. He is and the heart and mind of every person who is here. He is here and here and here and his inspiration and legacy and his experience is what has brought this state to this point. What were your most memorable moments with mario cuomo . Right now, its with his son. People use the expression following your fathers footsteps. Genetically and politically i have teased andrew that when i hear him, i think of his father. Its not very complementary sometimes to a public official but, my god, do they sound alike with their pace of speaking. Its so beautiful. In answer to your question, i think mariota cuomo in the pit of mys bp demised epitomized saying in a beautiful way what we need so badly which is honesty integrity, and have people believe we are sincere. He not only set it in a way that caused you to be proud to be in politics but he lived it. We all know about the american story to come here and with hard work you can do it. That is the story of mariota cuomos life and he has been inspiration to all at the privilege to work with him. It was very inspiring for the country and the democrats with his 1984 speech at the Democratic National convention where he had criticized ronald reagan. He really showed who the liberal wing of the Democratic Party and speaking for the country. Could a democrat make that same sort of speech today . They could make it but it would be falling on dead ears. Sometimes we find people talking about the american dream. I never looked at it as being liberal. I looked at it as an interpretation of a constitution and the hopes of aspirations of all people whether they make it or not. Yes, i think obama and his campaign, that he made the same type of speech. I hope it is not a liberal or democratic speech. I hope it is a speech that shows that in this country, no matter what the odds are against you, its possible to pierce through the racism and poverty and achieve. Of course, its more difficult now than ever before because of partisanship and because of financing. Its definitely the end of an era. Congressman, thank you so much for joining us, Charlie Rangel who has served more than four decades in new york. We will be back in two minutes. Welcome back, we are 30 minutes away from the opening bell. Heres a look at our top stories no, equity futures are rising. The s p 500 is up by 4 10 of 1 as well as the dow. The isn index will be out in just about one hours time. That will give us a glimpse of how the economy is doing. We are on the markets again in the next 30 minutes. We are about half an hour away from the opening bell and will have much more ahead including whats in store this year for m a. We will find out in a moment. Welcome back, we are 30 minutes away from the opening bell. Futures indicate stocks will be higher at the open as the s p 500 comes up a 1 loss on wednesday morning and giving back all its gains for december but we are still up for last year. Former new york governor mario cuomo is being praised today after he died yesterday of Natural Causes at 82 years old. He was elected governor in new york three times. His memorable speech of the 1984 Democratic National convention had many thinking of him for president. Republicans believe that the wagon train will not make it to the frontier unless some of the old, some of the young, some of the week are left behind by the side of the trail. He was considered a likely president ial candidate in 1988 and 1992 but eventually decided against running. He died hours after his son andrew was sworn in for his second term as new yorks governor. Searches are looking for wreckage of the air asia lena found debris that may be part of the airplanes tail located more than 90 feet below the surface of the java sea. The tail is the location for the flight data recorder which may give clues about what happened and why the airplane crashed. Economists bestselling author Thomas Picketty is saying no to france after refusing their highest decoration. He says the government should focus on Economic Growth instead of awards. His book is about solving income inequality. In china, shanghai canceled new years celebrations after a stampede wednesday night killed 36 people. Tens of thousands of people had crowded into shanghais famous bund area for a light show and the Prime Minister has ordered investigation and new rules and crowd control. We are 30 minutes away from the start of traits a lets count you down to the open with the top 10 headlines. Scarlet fu and pimm fox are joining may. Happy new year. Number 10 snapchat quietly raising and ringing in the new year with a new round of funding. This has been going on for months. It rate 48 million and now it values the start about 10 billion or more. What do you think of that . It still only has 150 employees. It has millions of followers. This is the photo sharing app that disappeared for about five seconds. Are you on it . Not yet. There is something called a rolling close like when youre going to raise money for a company. You set a target and go to investors and raise the money enclosed around and move on. Not snow with snapchat. It is a rolling close, they are always raising money for different investors at different valuations. Yahoo has a stake in snapchat and alibaba is going into this. So this Company Maybe never note need to go into public. Numbered nine, Sony Pictures is expanding its release of the the interview or go. It expands to more than 580 locations3. Brian fios is carrying it as well. Did you watch it . I didnt but it got to me. Its interesting that platform distribution . Bad publicity is never no publicity is bad publicity. As long as they spell your name correctly. When was the last time you heard of a movie like this described as a bromance . Something like that. When was the last time this was plastered all over the news media . Many movies just die and you never hear of them. No publicity is bad publicity. I like the news that maybe this was an inside job as opposed to a National Group associated with north korea. Number eight, amazon founder jeff bezos his company had a rough year and new totals reveal Amazon Holdings lost about 7. 4 billion in value over the course of the year. The shares sold at 22 less. We talked about google glass of essentially going away this year. Did anybody remember amazon fire smartphone . Is available for . 99 with a contract. Dont forget theyve got the fire stick that will complete with roku and comcast and the kindle coming out in various sizes and price points. That is a proven product. Everyone was wondering what the purpose of the phone was . When you try 10, 3 might work. Maybe thats the strategy. Amazon was on my list when i was buying gifts. This past year may have been the year finally that investors got fed up and said show us the money. He is beginning to prime for a president ial run number seven, jeb bush has resigned all corporate and nonprofit memberships. The greatest headline this morning said that he also resigned from being george ws brother. That was a joke. What he has not done yet is engaged purpose potential primary voters. He has not been seen in New Hampshire or iowa and has no plans to be there. Its interesting he is taking these steps toward eventually running but he has not done the other thing like talking to people. Hes doing a rolling close and keep running for president. We are two years away from the election. Its a rolling political headline. Fit makes perfect sense that maybe not to be out there as much publicly or giving the public too much of yourself. Let the press do it for him. It makes sense to years out that he will have to make some of these moves. Numbers sixcollege bowl games and in particular a big upset. Who is the College Football fan . I know nothing about it except that the San Francisco 49ers coach went to michigan. I did pick ohio state last night. That was a big upstate. I just like ohio. For those are dont know ohio state unseated alabama in the second College Football playoffs. The championship will be played january 12. The oregonflorida state game was a blowout and there were people who wanted to see what the quarterback did and they were thrilled that they lost by such a big margin. There were people rooting against florida state. Amazing. When is the big title game . January 12. There is a lot of money writing of these games. We were talking last week earlier this week, last year, about the amount of money pouring in. What about College Basketball . I am not concerned about that. I think it will be the big kahuna of them all. Still ahead, 2014 was the year of the megadeal. Can we expect a sequel in the new year . The deals to be on your radar in 2015, next. We are continuing our countdown to the opening bell. Number five, 2014 was the year of the megadeal marked by some of the years biggest acquisitions from comcast to halliburton announcing a combined 100 billion in takeovers on the same day. Brooke sutherland has been looking into the deals are used to have on your radar going into the new year. 3. 4 trillion globally and deals in 2014 and that was up 30 from the year before. It was the biggest year for deal since 20 2007. We should see this continue because the biggest driver of these large transactions is confidence in that seems to be improving and the economy is doing better and rising stock valuations are giving companies the currency to go after the socalled megadeals. All of that should continue barring any major geopolitical events. Where could we see some of the biggest deals . There is a lot of opportunities in the deals that almost were in 2014. Pfizer went after astrazeneca and that failed but it still needs a deal. There was also the issue of price that it came down to. The need for a deal is still bear for pfizer. That is a big name to watch and there is a big number of targets. So these hunters are still on the hunt. What about in sectors where we have not seen a lot of act 70 . What are those and could they start to get active this year . Energy is a big one that many people are looking to see deals and 2015. That was not so strong in 2014. The big change there has been a drop in oil prices. With Oil Prices Near a fiveyear low, these companies with weaker Balance Sheets could see themselves becoming vulnerable to takeovers. I think that will be kind of Smaller Companies but even the Big Companies like bp are getting a lot cheaper. While that once was a total fantasy to think about, that could become a reality in 2015. So bp could be an acquisition target . Some people think that way. Someone huge would have to buy it. There are not that many candidates out there. One of the big drivers for this past year has been cheap money. It has been cheap to borrow and fund these acquisitions. That might not be the case as much of this year if the fed is going to start raising Interest Rates. Will that add uncertainty to the outlook . I think it well. As long as Interest Rates stay reasonable to the point where people can slug at the financing they need is something everyone is keeping tabs on and waiting to see what happens. Right now, Company Still have cash on their Balance Sheets to make it work. In a europe, one of the big deterrence in the euro zone, there is not a lot of confidence right now there. You just heard mario draghi saying they will possibly launch quantitative easing could that have an effect on mergers . I think crossborder deals will continue because European Companies are cheap and there are a number of opportunities and i think youll see less inversions with the regulatory crackdown. There are still a lot of opportunities and if you are a u. S. Company with lots of cash and you need to boost growth there can be deals in europe. Thank you so much. Much more just ahead ever heard of a flat white . Neither have i. Starbucks is counting on you drinking it. Bad bets are hurting the biggest pimco mutual fund for the second year in a row and more details coming up. Welcome back. Lets get back to bringing you the most important story you need to know before the bell. Pimm fox and scarlet fu are joining me today. Lets continue with number 4 who took an uber over new years eve . Some people even got the email about their pricing. Uber had a surge price warning. I did not get it. You needed to avoid getting it between 12 30 p. M. And 2 00 a. M. Is when it was most expensive. They were expecting to get complaints. It sounds as if there were people who used mover despite the price warnings but there were also some complications. Many people were scared off. There was an article saying potential writers were scared up high the price surges so there was a lot of lyft cars in the neighborhood but overall, too many cars, too few passengers and drivers complaining about low prices. They work until 5 00 a. M. And this was the big day. It was a very busy day for the drivers. Number three, its always busy at starbucks and they are trying to lure serious coffee drinkers bite offering the flat white. Do you like coffee . Not really. I looked it up and its a double espresso with foam. Steamed milk foam. Drier than a foaming cappuccino and many people compare it to a latte and it was invented in australia in the 1980s. Can you go to the counter and ask for a kangaroo . They are going to introduce this on january 6. What will prevent anybody from going to a starbucks counter now and saying i want a flat white . You could do it. The product is already there. I dont know. Its like Pumpkin Spice latte, its there for good. Number two, the pimco mutual fund trailed for the second year. The fund return 4. 7 in 2014 which lagged behind 53 of comparable funds. It lost 1. 9 in 2013. Its another reason why maybe although there were many reasons for bill gross to leave, but he said he wanted to deliver and he said he was going to. Imagine going through the review of this company and saying you did not perform as well as on a staff of the other people who do the same thing. You lost the person that founded the company, you lost the person that was the star and face of the company. It looks like they will have a challenge in 2015. They were trying to keep their investors on board. Bill gross was in damage control mode. Pimco was trying to retain their customers. 19 months of redemption for that fund. Janus is pretty happy. We are on the markets a quick check on how futures have settled ahead of the opening bell. We look to the building on the gains from last year and we will see if they hold. Our top story and the opening bell is next. Welcome back, scarlet fu and pimm fox are joining me right before the open. This is the first trading day of the year and the number one story the euro is weak into a 45year low l spanish and italian bonds rose amid speculations the ecb will follow with quantitative easing steps. What you think . We could spend years talking about why this is a bad thing but if you ever want to go to europe as an american if you have ever tried to buy a flat white in europe and you could never figure out why the cup of coffee costs more one dollar 24 a euro, whats wrong with parity . If you want to experience europe, this is the time you can afford to do it. Youve got a good point because its not only us going there and having more purchasing power but clearly, this is a way to juice the asset prices on exports out of europe. They need a lower valuation euro to sell that heavy machinery. As stock start to trade in the first day of 2015 the question is what is in store for equities and the fed in the coming year . Laszlo birinyi says for the next 36 months that the stock market will be intact. Our next guest totally disagrees. He says that the fed is not going to raise Interest Rates at all. With me is the president of bianoco research. Jim you have been saying that the fed should not raise Interest Rates this year. You are looking at what that tells you that equities are going to be flat . If you look at the bloomberg estimates for 2015 for earnings, they are down to 6. 5 . That is the lowest level since the Great Recession ended. On top of all that, almost every guess is too high. Bottom line, i know that you have guests that say that earnings are going to be good but they are not going to be. If the fed is going to raise rates falling earnings expectations and raising rates is a cocktail for a poor stock market. What was your estimate for 2014 . I had zero to down 5 . You were down or flat. We came in around 11. 5 . What would get you to change your mind for 2015 . If the economy came in strong and earnings were to be on the upside. With a foreword pe of 17 . I would like to see a real strong push from the economy and earnings. The problem is that all the estimates are going in the wrong direction for earnings. They are also working from a high base. What about your perspective on the fed . If they decide to move on a rate increase, it is the trajectory rather than the timing. They could do something small and leave it there. That is true. The fed is wide open in what they can do. I have had a minority opinion that the fed is driven a lot by the financial markets. They are chicken. Why did they do qe two and qe3 . If we were to get a correction of around 11 , the fed it is off the table as far as fed rate hikes go. The fed is driven by financial markets. Should the show volatility . Should they show any kind of correction . The fed will reverse themselves. The history of the last five years is pretty square. Monetary policy is nothing but an emotional reaction to the markets. I hear your case on stocks being flat this year based on dismal earnings growth. Remember that in this global stage, you have an ecb likely to start easing even more who knows what that is going to do sue to asset prices. In japan you have a deflationary spiral. China is on shaky footing. What about the safety plan for the u. S. . Isnt that going to hold . You will get some of that. As that you made a very compelling case for why stocks will struggle. Japan is in recession. Qe is coming to europe. China is struggling as well. I know economists have gone from 45 of s p earnings coming from overseas to only 13 of exports are gdp. The fact of the matter is that 45 of revenues from the s p 500 Companies Come from the rest of the world and the rest of the world is not doing well. That is going to continue to be problematic for the equity markets. If it was not for that, i might even be a little bit more pessimistic. We will get some safety trade, but not enough to overcome the other problems. Thank you so much. Jim bianco. Coming up new year, new leadership. The sea suite revolving door. Who is in and who is out . It is the First Business day of 2015. A new year means new leadership. New ceos. Major retail brands will be doing that as well. The Parent Company of sex fifth avenue, gap, Abercrombie Fitch. Sax fifth avenue, gap Abercrombie Fitch, gucci escada. Good to see you. Happy new year. Lets take hudson bay. Sax is one of my favorite stores. The new ceo is not a retail guy. He is harvard law, Harvard Business executive officer. His experienced most recently his supervalu, whole foods retailer. Target. Com, target credit cards. The good thing about Hudson Bay Company is there is a great cornerstone in leadership between Richard Baker Bonnie Brooks storch can take what he has learned and saltandpepper hudson bay. It was an easy transition. That is not such a big challenge on that front. What about Abercrombie Fitch . Michael jeffries was finally ousted after all of these years of essentially consumer driven backlash against him, against the comments he made about fat women. They are still looking for their ceo. They are still looking for their ceo. The unreported story is that one of the seminal geniuses in retail today the executive chairman your listeners would know from Marshall Fields during their great days, a transformational leader. I worked with him when they did the softer side of sears which saved sears in the 1990s before lampert came in a took it for another downturn. You think he is going to put his stamp on abercrombie . A lot of problems that Abercrombie Fitch, but if there is any want to solve them. How did they get cool again . They are getting cool with social networking, connective consumer networking. They are making all the right moves. One thing about arthur is that he attracts the best and the brightest from the industry where there is a real shortage of transformational talent. He is the one person giving his 1. 000 batting average. He can bring in talents nationally and internationally. Cap is going to be interesting to watch. Gap is going to be interesting to watch. Art peck. When Mickey Drexler left with pec coming ink and being taught well by glenn murphy, they should have a solid transition in a tough time with consumers. We will see. Gap one of the staples when i was a youngster. The up of retail ceos the new lineup of retail ceos. We will be right back. A story we have been covering all morning long. The minimum wage rose yesterday in to do states, including washington dc 21 states, including washington dc. Erik schatzker is also looking into this move. Is that there is a debate. The pouiint is that there is a debate. Who better to conduct of the debate than art laufffer . He called the unemployment act the teenage black unemployment act. His weight his point is that far from liberating for disadvantaged it is a tradeoff. It is a tax on the economy, essentially. It makes it difficult for people to gain the social mobility they need to rise to higher income levels for a longer period of time. Is he making the statement that when you raise the minimum wage then you essentially exclude a certain segment of society who would normally be working at those wages and do employ others . Or not. Or not. We will find out today on market makers. I think he would more likely make the argument that Companies Hire fewer people and that the teenagers who they might be inclined to employ at a lower wage they dont. They dont hire those teenagers. There are now 29 states and the District Of Columbia with a minimum wage higher than 7. 25 and they just on hire those people. President obama put in the 10. 10 minimum wage and is that going to get past congress . We are going to find out when art laffer is on market makers. Given his perspective on Public Policy he probably favors the statebystate approach much more than the federally mandated minimum, in his view. I suspect it speaks more directly to the reason this country is a country in the first place. A republic. A republic. Thank you so much for joining us. Erik schatzker of market makers. Barely a day into the new year we have a fight between leon black and posting or paul singer. They are in a heated showdown in the fate over the fate of caesars entertainment. They have been in a fight over the last couple of months. It has been six months of back and forths including lawsuits and mudslinging. It has been a very public process. What does each side want . You have the bondholders. Super aggressive, lots of barbs they are willing to throw. They have actually filed a lawsuit we have reported about. Behind the lawsuit against caesars. And through the caesars board. Singer is pushing for what exactly . He wants as much of the pious he can possibly get. He wants as much of the pie as he can possibly get. But there is not enough to give to the creditors. He wants a nice slice of the equity as well. That is what they are trying to do. Leon black is saying what . He is trying to keep hold of the whole thing. They have created all Different Companies to move assets away from bondholders and retain as much control as possible. How is this going to get resolved . Through bankruptcy court. A judge is going to have to come down. There are going to be other bondholders, who have not been involved in the talks thus far who will come forward and they will have lots to say about how this deal is worked out. A lot of wheeling and dealing over caesars. Laura keller, thank you so much. That does it for today on in the loop. We are all over 2015. We will discuss the outlook for the financial markets. Jim reynolds is joining me as well. We are gearing up for the first jobs report of the year which is the last jobs month of last year. How is the labor picture improving . Mohamed elerian leads an allstar panel on friday. That is next week at 8 00 a. M. Have a great weekend. It is 56 plus to the hour. Bloomberg television is on the markets. 30 minutes into the trading day lets get you caught up. Stocks are up. We are starting the year up more than 100 bytes. All three major averages. The dow jones is up 0. 64 . The nasdaq is up almost 0. 5 . Turning to etfs one of the hottest sectors. A 30 jump over the year before on etfs launched in 2014. The onslaught of new launches will continue. Your to look at some of the highest profile new etfs to watch in 2015 is our etf guru at bloomberg. What are you watching this year . I will start off with star power. Bill gross and jeffrey gunn lot have etfs that will probably launch in 2015. Jeffrey gundlach is launching with spider. Bill gross will be bill gross strategy. The prospectus has not come in yet. It will probably be a bond fund in an etf wrapper. Actively managed etfs have less than 1 . The one caveat is when there is a star attached to that. They have the bulk of the active management. For both firms, it would be a nobrainer to put these guys in etf wrapper. You are talking about what about co . Do they have enough star power without bill gross . The bleeding has stopped. It lost less than i thought it would. The other etfs son no outflows. I think co pimco is going to be just fine. Turning to your next pic, a virtual currency, the winkle voss etf that will track bitcoin. Speaking of star power. [laughter] the winkle voss twins are right up there and bitcoin gets a lot of press. I give it a 5050 shot. They are ready to go and i think the sec is seven in internal conversation about this and struggling whether to launch this. There are a lot of question marks with security and regulation. Look out, this could see a lot of Media Attention and could steal the show next year if it launches. Bitcoin are kept in a virtual vault. You have gold, it is a block of gold. The sony hackers probably casted a dark cloud over this. Now you will have all of your assets stored in a virtual vault. That will definitely be something to watch out for. Thank you so much. We have to leave it there. We are on the markets again in 30 minutes. Market makers is next. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. Is the government doing enough to help Companies Fight cyber crooks . Should they strike back . It is a happy time, a happy new year for some americans. The minimum wage just rose in 20 states and d. C. Art laffer will weigh in. Are you having trouble keeping your new years resolutions . Dont worry. There is an app for that. Good morning, welcome to a new year here on market makers. Stephanie is off today. Lets begin with some breaking economic data. Our first data point of the year. Michael mckee is in the newsroom with more
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