they are all here helping us break this down. unfortunately, this microphone is now on my person. how about we get to some first word news with vonnie quinn. vonnie: thank you. -- tog an end to serious syria's war, the talks will begin next month. the talks don't mention the syrian president, western power wants about but the russian power back him. the international organization for migration is saying that the total is four times higher than oft year, for fifth --4/5 them arrive by c. encourages the private sector to offer humanitarian aid. ted cruz is gaining on donald trump in the race. he is four percentage points behind. their rivals are far back from them. voting starts six weeks from now in iowa. brees.ilestone for drew he has given 60,000 career yards, more than four miles. that is your first word update. matt: taking a look at the index futures, you can see not a lot of movement this morning. if you look at what happened overnight in asian stocks, we had a little bit of a lift after the chinese talked about new stimulus, wider fiscal deficit and more underpinning of the housing market. we have more green on the screen and read. this is a look at all of the asian indexes i follow. at commodities, that is where the action has been over the last few weeks. right now we see nymex crude gaining about .5%. back up to $36 a barrel. betweent a tight spread brent and wti. nymex gasoline is when you will want to look at more closely. gasoline, our futures are up 1.5%. but down 20% year to date. 70%-18% year to date. you actually are going to see at the pump as you drive off to fly over country, over the weekend, prices dip below two dollars a gallon for the first time since 2009. according to aaa, americans have total, $550illion per person. with that money, you could buy the kids a hover board for christmas. stephanie: they are illegal. david: my son wants one but they blow up, they catch on fire. and awell, a hoverboards fire extinguisher. david: i hope he is not watching. because they catch fire doesn't mean they aren't fun. david: let's go to oil. is at the lowest price in more than six years ahead of weekly inventory data due out later this morning. andrew cosgrove, you know about oil. i won't ask you to predict where it is going. stephanie: lower. david: what does this mean for the oil industry? andrew: i think it means more pain. it is all about balance sheets and credit. you mentioned china and fiscal stimulus, adding support to the market this morning, you will get the same demand that you got over the course of the previous five years when you had a massive infrastructure buildout that facilitated the boom in base metals and steel and iron ore. the chinese announcement didn't seem to have much to do with oil consumption. megan: absolutely not. we talked about this earlier, when we see this filtering through, is there a reprint that you can see? when is the pain going to start to the seed? >> if you look back at the last dollar bull market, it lasted five years. embarkingentral banks on their own quantitative easing. the federal reserve is shying away and we are facing rising interest rates. it tells you that there could be more to the dollar rally. stephanie: what do you think? >> so many people were incorrectly positioned for the dollar rally. how many people are talking about hyperinflation at the collapse of the dollar, qe is going to destroy the greenback and too many people were on the wrong side of the trade wind. when their thesis proved wrong, they were slow to unwind. i think this could be very early in a long-term macro move in the dollar. it will continue. it won't go up forever just like oil won't go down forever. what is going to weaken the dollar going forward? stephanie: what is going to turn oil around going forward? barry: right now you have a huge oversupply. but drillers are throttling back. but not as much as we expect. we have the increase in glut that frack spurs have not dialed back as much as we thought. stephanie: something is happening to matt miller, he is about to expire. matt: i hear barry talking about supply and demand. cosgrove had a great piece on bloomberg intelligence. you can find that on your bloomberg. the dashboards are fascinating. to graphve used bi the forecast of supply in white versus demand in orange. this goes out to the end of 2016. the gap keeps getting wider and doesn't tighten until the end of the year. so i wonder, is there a chance that this is off. that people are on the wrong side of the trade? andrew: unfortunately, it looks like we need lower prices. the cure for lower prices is lower prices. [laughter] andrew: demand is going to downshift this year. if you look at what demand growth from 2010-2014, it was 900,000 barrels a day. into 2017 beyond 2016 and 2018, you could downshift that trajectory. you would need more supply rationalization. stephanie: are you concerned about temperatures? europe,w warm it is in not to talk about the 70 degree this christmas, there is no need. andrew: that is more on the gas side and that has been clearly evident. you have natural gas and industrial demand and whether demand. it is clearly absent this time. you are seeing nothing coal. demand.r we lost coal this year we will lose up to 50 million tons. concerned should we be about lack of innovation into clean energy technology as a result of people not being incentivized to do it? stephanie: she is mad about her volkswagen. [laughter] you see wind and solar move down. prices, lower oil desolated process a little bit. strides have been made over the last 5-6 years and they will filter through as we look forward. stephanie: how about people saying opec is dead? everyone is out for themselves. nobody is listening. nobody cares. they're scrambling to get their piece of the pie. go figure that the oil producers aren't cooperating with each other. who could have seen that coming? we have interesting parts happening all at once. we got very spoiled, or at least the commodity exporters got spoiled by china's massive buildout of everything from industrial metals to cement to energy consumption. to you drop from a 12% gdp 6%, that demand is going to slow down. the good news to your point about diesel, and by the way, if you want good diesel, the european the m w's are better than the volkswagen, the low prices -- we have used them for dr. buildout in clean technology and alternate technology. lower oil prices is going to do nothing but force greater innovation in battery storage and an efficiency of solar panels across the board. as much as people think this is terrible for solar, it will force them to up their game even more. stephanie: we will wrap it up. andrew cosgrove, thank you for being with us. unlike matt miller, i will include your first name. megan and barry, you are going to stay with us. we are going to work on a car deal for megan now that she is worried about her volkswagen. tina fey, days after she brought back her role as sarah palin on snl, there are palin herself pokes fun at tina fey's character. an did a parody in independent review. sweet freedom, a devotional. pc culture. stephanie: and there you have it. deutsche bank would we come back is what we will talk about. flagging billions more in trade that were not flagged for money laundering. russian money next. ♪ vonnie: welcome back to bloomberg go. a deal between ford and google could mean there could be a self driving car on the road. will announce that . a top google official says they plan to put an autonomous car on the market within five years. the news is getting dire for toshiba. shares sell again today in tokyo and they are down 12%, the lowest point since march 2009. has lost about $2 billion of market value over two days. chipot is under -- chipotle isw under new probe over e. coli. their stocks have been downgraded. stephanie? stephanie: where will matt miller have lunch? today we are focusing on deutsche bank, which is said to be reviewing a total of $10 billion in trade related to its russian operations. 4 billion more in suspicion transactions than previously disclosed. now from jacking up the jet prices to russians, give us the details. keri: we had previously reported that deutsche bank had found $6 billion in -- you can interest a convert a ruvell into a dollar equity holding and it ends up going from moscow to russia with the push of a button. they are perfectly legal but mirror trades and now an ordersnal 4 billion by have been discovered by deutsche bank and have discovered as not going through all of the compliant protocols. they have leaked to some of putin's allies, including some of his best friends. all sorts of good things. stephanie: deutsche bank found this? it wasn't the regulators. they turned themselves in? keri: they were checked off about some suspicious accounts and then they took a close look at the russian operations. when you do that, you don't really want to find anything like this. 10 don't want to find billion in trades that may not have gone through. david: the concern here is money laundering. and you rules in russia want to convert them to dollars and not have anyone trace it. >> that is why the department of justice opened up an inquiry. russian clients of deutsche bank are using these trades, a one-way trade or eight mirror trade, to move money out of russia to circumvent into money-laundering controls or possibly with sanctions. david: this is what i don't understand, if you are a big bank doing is us in russia and there are billions of dollars being traded, the possibility of money laundering might cross your mind. [laughter] stephanie: there are kno w-your-client barriers. >> we have seen this across the board with banks on wall street. we have seen hsbc, standard chartered. with deutsche bank, one of the most interesting things is, how big is it going to get? how broad is it going to go? this bank is still in the litany of scandals. is trying to recast this and settle some skeletons but this story seems to not be getting smaller, it is getting eager. it will be interesting to see how big it goes. keri: i have paid an enormous amount of fines because of infractions. thanks in general wall street have been paying fines and pleading guilty. you have to wonder what happens to repeat offenders? >> so far, nothing has been happening. i keep coming back to the size issue. aside from the fact that the honor system doesn't work, are these banks to big that they are is ittored herbal? impossible to stay on top of trillions of dollars moving in a day of -- moving in and out? ini: these trades took place 2012-2015. these are not old. david: they are pre-sanction trades? what we understand, and they did not happen during the sanctions but that is something they are looking closely at. david: keri geiger, thank you for being with us. morning of ans economic bubble. is he right or is the bubble phenomenon overblown? ♪ david: welcome back to the virgo. many have been saying that we are in a bubble. ritholtz,ing to barry bowls are for losers. in his latest piece, he says that we are now in the latest year of incorrect bubble calls. -- fallen analysts who missed the most obvious bubble in history are now obsessed with spotting them. market rightthe now, i have a hard time finding a bubble. barry: we heard about the tech bubble and the unicorn bubble. after ahearing bubble giant collapse, people do tend to look backwards and the folks bubble andthe.com , so to avoidbble that mistake, now there are bubbles everywhere. they have been completely wrong for six years. stocks are not cheap but they are fairly valued relative to a number of other factors. there is a huge difference between a bubble, a collective crowd dilution, and parts of the art market that might have gotten overheated because you have four billionaires competing that issame picasso -- not the same as all of the stocks in the united states. stephanie: why isn't it fair to say that there could be a bubble in the credit market? you have money that should never have been involved in that asset class flooding there. all of those are signs that it is a bubble. barry: you have to dry distinction between things that are overpriced and a full on bubble. think about a real bubble. the south sea bubble. whenthe sub prime bubble all of the usual measures of valuation and the valuations we look out to see if things are fairly priced are thrown out. megan: let's talk about another bubble you mentioned, the donald trump bubble. you don't only talk about his own inability to predict, but do you think he is a double -- he is a bubble? barry: a few weeks ago, i did a piece that talked about how all the political experts have been wrong. i think the pros have underestimated him. the outsiders from the usual political system and the residents that donald trump, who, if nothing else, is a brilliant show man, has had with a certain population. is he likely to be president? the odds are against that. but he certainly can give a good run for the money. and it is not impossible that he ends up as the gop nominee. i'm not saying it will happen but people have dismissed it from day one. david: we were talking earlier, one of the things that strikes me about new york, so many of the people i know who is not in favor of donald trump are starting to say, maybe it is possible. and maybe it wouldn't be that bad. stephanie: but i do think it is people who love donald trump. i think it is people who are frustrated with the gridlock in washington that they are saying, it is just so crazy, it just might work. megan: the sentiment that he is really playing to is that he is identifying a certain strain of the population that feels like it has been left behind by obama and that administration. president obama said yesterday that it is a blue-collar workforce that he is pandering and i think that is the wrong approach. donald trump is going to gain power by saying to people, here is the economic future i am mapping out. i think that is why he is making hay right now. barry: if you look at this recovery, it has been uneven. a graduate degree, you are doing great but everyone else is having a hard time. and barry arean staying with us. ♪ when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. back, you arecome watching bloomberg go but you are looking at a quiet washington, d.c. -- why? megan murphy is here in new york and the obama family is on vacation in hawaii. people are not necessarily at work today. but here, bloomberg go is well underway. ritholtz.e with barry our reach,et to let's get to first word news. vonnie: the army sergeant who abandoned his post six years ago will be arraigned by military judge today. misbehaviord with for the enemy. he was held by the taliban before being freed in a prisoner exchange. the charge carries a punishment of life in prison. the recent attack in afghanistan was a deadliest attack -- six americans died at the white house called the bombing cowardly. and a first for space ask. they came straight back to earth. it landed upright at cape canaveral last night. this is a triumph for elon musk just months after the explosion of an unmanned cargo rocket. david? david: thank you. tom keene is here for the morning must-read. tom: michael spence from stanford, now at new york university, this goes over stock flow analysis. which in america, we look at the flows year-over-year and michael spence a lot of time looking at the stock. bring up the quote here. emerging economies have become dangerously competitive with commodity prices. if capital flight occurs, the consequences will be dire. balance of payments difficulties, inflation, fiscal stress and downgrades by the major credit rating agencies -- that is what we saw today from the s&p -- all of which implies more capital flight. many is moving out of emerging markets with a vengeance. barry: these are economy based commodities. a strong dollar making the most important export for cheaper than it was, but the biggest consumer, china, has just finished a 10 year build and they are throttling back. tom: the ft has been great with flow analysis and now what margin has been calling for is upon us. as theiris is exactly he says. we wonder where it will end. at the end of the day, when we don't have the commodity super , coupled with a strong dollar where we see no end, what is going to taper off the strong dollar boom? it is a lot of pain ahead in these economies, you can see it. david: i'm hoping to have something from the bloomberg about flow? matt: i saw this this morning and i saw michael spence's work and i thought wow, we have a great tool for this. i gives you global flows of money. whether you want equity flows or portfolio flows, just a look here at china and you see $1 trillion leaving china over the last 12 months. it shows you what tom keene is talking about. money is leaving and you can see the flow everywhere. we have great data that we have analyzed here. that,hat is great about put your hand on abu dhabi. it is green all the way across. between theparation haves and the have-nots in emerging markets. david: i remember a version of this in latin america in the 1980's when capital was flowing out of latin america. tom: god, you are a fossil. david: i am. inflation,away devalued currency and it puts enormous pressure on these countries. he, you saideir that maybe the dollar won't be as strong as we think. i said that it will not go up forever. this, you lookt at china and it had a 40% collapse this year if not worse, that has to do with a big chunk of the flows but it all comes back to where the global demand is and how much you things cost. the dollar is a key factor in that. moreanie: i just think the sensitive to commodities that these emerging markets are, the more they need there to be superlow rates. what is going to happen? you will see more dollars flow to the u.s. barry: they will cut back on production and they will reduce the supply. demand will pick up and suddenly we will find ourselves in another upward cycle. but it may come from lower rates. tom: he is correct. the definitive paper on this is peter klein. he says that low prices solve problems. will equally create again and that is what we are having. have anot only did we lot of people positioned wrongly, but go back 3-4 years, and ask yourself how me people were forecasting the dollar to begin an epic rally? tom: who caught the oil rally? megan: one thing we are forgetting is the fundament of the u.s. economy. last week we were saying forget about the policy for a second. let's look at where we are with the u.s.. we may finally see it an uptick in wages and participation. but what they will be pushing is the u.s. as a leader in terms of the fundamentals. stephanie: hold that thought. goant to bring in jim beyond -- jim bianco. you just put out a p saying that it investors had listened to icons five years ago, who said that the fed meeting rates as low as they are will eventually hurt investors. is this what is happening today? >> if you look at the markets from an asset allocation standpoint, the best returning asset this year is cash at 1/10 of 1%. we have data going back 80 years. there is no way to make money this year. five years ago, it david tepper said that the fed is going to do qe and everything will go up and it did. and now the fed has stopped and nothing is going up. and from an asset allocation standpoint, we have the worst year. david: the thing that bothers me about this is that money is only good if it is working. it isn't doing any good sitting there. if it is on the sidelines it will be hard to do the basic economy and get it going. barry: that is correct. if you look at why this is going on, it is the reduction of stimulus. by the way, you could expand that list out quite a bit. emerging stocks, developing stocks. most of the sectors of the s&p and they are returning somewhere around 04 this year. zero four this year. there is nothing that had the from the5% gain traditional standpoint that everyone had. tom: let me ask you about catharsis. do you see catharsis out there? i've seen almost next to none this year. >> a review. the has to be some kind of catharsis and look no further than the energy market. it has been in an epic decline. what does everyone say about energy? it is going to go up. it is going to bottom. they have been saying that since $100 months ago. we need to get the consensus that oil will get to $20 and stay there forever and maybe that will be the bottom. but there is no catharsis. -- tom: lower for longer. >> let me push back a little bit. we get his research in the office and it is fantastic. but when we look at a five-year 30% in, the smp was up 2013. last year with evidence it was up double digits and going back to the lows, we are up over 200%. aren't we do for a year of digesting gains and letting ourselves catch up to the valuations? you aren't going to go up every year. megan: what about the other big indicators -- emerging activity? we are seeing megadeals that typified the end of a bull run. that is another warning sign that we may be at the tip. possibly, but even after the huge increase we have incredibly low rates and there is a tremendous amount of incentives for mergers and improving consolidation in various spaces. the margin debt is misleading. it tends to be coincidental but it is always at night -- always at an all-time high until the market guys. it is always peeking on the way up. stephanie: what is your 2016 look ahead? >> everybody thinks that itething magic happens and is called january and we will see a reversal on these trends and i don't see a reversal on these trends. stocks can correct but everything is correcting right now. it is the reduction of stimulus. it is the perception that we will reduce stimulus even more in 2016. i don't think this trend will change. zero beingmore of the return of everything into 16 -- into 2016. stephanie: there you have it. jim biancogo -- joining us from chicago. and tom keene is going back to surveillance radio. what you willack, expect from big banks in 2016. ♪ vonnie: welcome back to bloomberg go. i am vonnie quinn. china's leaders are signaling toy will take more steps widen the fiscal deficit and stimulating the housing market as beijing tries to put a floor under the slowdown. statements released at the end of the conference said that monetary policy must be more flexible and fiscal policy must be more for cell -- more forceful. sincedes near the lowest 2004. banks say second year of recession is all but inevitable. jpmorgan has reversed the call and now presents a contraction. and -- has presented a decline of 7/10 of 1%. stephanie: as we had was the end of the year, we are bring you the best of bloomberg go. we spoke with one of the finest finance chiefs. take a look. >> as long as the system is safer it is fine. and if we have more volatility -- there is more truth to that. primary markets and somehow the financial markets will reverberate into the economy. that is what i would be focusing on. rules or any interpretations of rules, if you take all of that, some of the things are good and some i don't agree with. i'm not going to complain about them. they are what they are. jamieyour interview with was one of the telling comments when he said, we just deal with it. we do have to deal with it. we know where regulation is going. business models will change as a result. vulcanization, that is a term i do's. don't think that is going to go away. we haveestly think that made all of these rules and we are not done in terms of imitation. it has made the industry tremendously more safer. it has made the industry more simple. we have the living wills and everything. let's let this operate. >> one part of dodd-frank that was a mistake was -- he goes proprietary trading had nothing to do with the financial crisis. and the idea that proprietary trading has something to do with the financial crisis is wrong. so that part of the rule was unnecessary and restricts banks ability to make markets and that is not a good thing. >> the amount of the pretty in the banks, i really don't see how this can happen again unless that changes. the speculation that is going on in the street is dramatically lower than what it was in 2006-2007. i don't see that. stephanie: here to help us break that down is alison williams. your 2016ly put out outlook for global investment banking. what is your call? >> there are two big things. one is cyclical. cyclical is rates. banks have a waiting for this for a long time. unfortunately it will be a gradual pace of tightening. there isn't much factored into estimates. that is where you get the biggest the google surprised. the second basis is technology. we saw a lot going on this year. in terms of syntax. we have seen technology paying a bigger role in terms of cost cutting and banks becoming more efficient. and i think now the driver is turning towards growth. we have the online consumer growth lending, small business lending, lock chain is an initiative that several banks are looking at. that is where we get the potential for more interesting instruction. megan: i want to ask you something about that. syntax andk about when we are faced with the structural changes, how are they going to see -- how are they going to keep that talent? >> that's the thing. when we look at 5-10 years of this industry, retraction of talent is one of the biggest threat. stephanie: i don't want to be a jerk but why would you do it at a bank where dodd-frank is being implanted? i can't think why you would. one of the biggest changes we have seen is the rise of the two takes. , and you sayult here i am really think desk here i am. you say, why am i attaching myself to a bank? a ceo made the comment about no matter what you do at the end of the day, you are still getting paid based on what happens at the casino. has helpedntality the growth at the boutique. it it was until now, good to work at the casino. over the years, even in the sub prime crisis, you saw that. stephanie: no one is getting paid up banks still means you will get $300,000 salary and your seat is worth a million dollars. at a boutique, it is eat what you kill. barry: don't kid yourself. at big banks it is eat what you kill. stephanie: now. but you could have been an average trader and still get paid. you were still getting paid $2 million a year. barry: so much cash sloshing through the system, what you are referring to is being productive and being efficient. megan'se: that goes to point. why would you do that at a big bank? barry: let's use deutsche bank. elsewhere, a hit up the banks have grown too big to succeed. stephanie: that is why nobody wants to go to deutsche bank anymore. 4716, what about domestic versus international? might we see some big u.s. banks move in? alison: what we have seen is that some of the u.s. banks have moved early. deutsche bank is still dealing with capital adequacy issues. you have label problems that have been addressed in the u.s. but are still awaiting some of the companies in europe. and there are businesses where they are staying within pricing, so be prime financing business is one of those. but a lot of the other are trimming off where they didn't have scale and you have seen that across europe. so there are businesses that weren't up to scale and they weren't competitive to begin with. be a majoroing to move. but there are opportunities. it is important to keep in mind. that is alison williams, thank you for being with us. barry and megan, you are sticking with us. , coffins andguns jail have to do in common. ♪ david: welcome back. we have been talking a lot about gun control but gun stocks are lazing this year. and funeral and cemetery stocks are up at all-time highs. we are going to talk about in investing firm. the london company of virginia. $1.8 billion invested in these things? >> the truth is, i hadn't heard of them but gun stocks have been doing amazingly this year. i took a looknd at the company that owns the most stock out of anyone in the and we also found that they own smith & wesson and they own huge stakes in ammunition companies and weapons companies. stephanie: who are their investors? more and more investors won't invest. >> their investors are amazing. they have some of the biggest pension funds in the country. new york state teachers fund had $30 million with them until a couple of years ago. just a few months ago, put london company on the list of funds that are eligible. >> they haven't invested yet. david: are we up in funerals? or more people dying? guy who is close to the company who said that he had this theory called box them and bury them. how is that considered a sin stock? are people not sitting not dying? think that this company in a way would look at any of their holdings as simple. the way it was explained to me by them was that, look. why would we discriminate just because someone frowns on them? megan: you can rationalize anything you want. something to be said about why it is treated differently than tobacco or coca-cola. -- is the lineve fair to draw? stephanie: we have to leave it there. coca-cola, guns, funerals. merry christmas. stay with us. nasdaq hit a private market. ♪ bring your family and friends together to discover the best shows and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. stephanie: it is 8:00 a.m. right here in new york city. we are kicking off the second hour of lumber go. david: here with us throughout the hour is josh. vonnie: thank you so much. seeking an end to syria passes civil war will restart next month. they will gather again in geneva. the previous rounds of talks went nowhere due to disagreements about the future of syrian president aside. -- assad. ended last week for the hung jury. -- officers are ted cruz gaining on donald trump in the presidential race. trump lead 8%. matt: another leg lower at 7:00. if the week word to end today, said crews actually put up his best week. -- crude actually put up its best week. brent really, you know, the global benchmark for oil, you can see it is now moving down one quarter of 1%, its fifth day down in a row. not a lot of action in equity index futures this morning but we have turned from red to green. merry christmas from the bloomberg terminal. take a look from my chart here. is red and green. index. use it for any line, righthe top now, 2.9%. it is the worst december we have seen since 2002. rallylly you get a big for the last two weeks. we had a big drop and there is only a week in the have to go in trading. it does not look good for this rally this year. chipotle's problems are still not over. a new report of e. coli outbreaks in previously unaffected states. weeks after the restaurant implemented new protocols. out rates of the illness. let's bring in craig. chipotle it seems like they cannot catch a break. there was more bad news. there was a sense of maybe this was behind them and then this puts it right back in the news. there is still a sense they are not in control. that makes it difficult for them to move on. david: in the past, they could track this act to a specific farm and decide what is wrong. time, they are able to find it. craig: it makes recovery difficult for chipotle. without them coming out and saying it was lettuce for cilantro or tomatoes, it makes it difficult for them to get past it. it is still out there and customers minds that it could be dangerous to go to the restaurant. david: one of the selling points has been local sourcing. at what point do they say we have got to move in the direction of most of the restaurants and start using big national suppliers? craig: they said they will change supplier standards and some will not meet those standards. they also insist this is not an indictment of their philosophy and business model. they say we don't know what caused this but in a lot of customers minds, they have at question. sense of: give us a how hard they can get hit right here. the fact that this news continues to come out, are people going to choose to it there? people will hit extremely hard. it will plummet down 16%. 11% for the first quarter. this company has 11% sales quarter. ino bell had an issue back 2006. they are getting hit very hard. it is a fickle thing when you till with the consumer. chapala getting hit with negative headline after negative headline. stephanie: would you eat at chipotle right now? matt: yes. so delicious. children took me i'd have no choice but otherwise, probably not. >> it campaigns to persuade consumers that they are safe. of plans to come out big or a big gesture? stephanie: it also would cost a lot of money. >> it would. >> safety protocols will cost think we they said we will get royal customers back and they also said before this they were talking about educating new consumers and bringing people in the restaurant. it will be at least a couple of quarters before they are able to bring them back. that feelingss out there for customers. >> at one point do you have to worry about investigations? consumers trying to get significant money. >> it will certainly be a liability going forward. we are expecting some illegal action, basketball students getting sick. that will be more bad headlines in the system. the fact they source locally is a problem. spoilage is an issue. they could end up back in an antiquated mcdonald's style model. >> they are saying firmly this is not a local supplier. there is no question this has raised issues about the way they sourced food and handled their food. bear company that will food on a premium and integrity, this all strikes at the heart of the brand. david: thank you for joining us. we will turn to health care. shares of publicly traded companies up on news obamacare subscribers, easing concerns that participation in the health plan passes u.s. run mark is waning. tell us about how this affects hospital stocks. >> most of the year, they are incredibly boring. most of the year, they are flat and then obamacare enrollment, we see massive volatility. i want to roll you back here. all of a sudden, they see a dangerous warning sign. in up to the people who come to the er, do not have insurance, rack up thousands of dollars in hospital bills, and cannot pay. stocks is it sent because these are thin market companies and we saw a reversal of the trend for market care. all of a sudden, you have got hospital saying we're seeing coming up.red people 10 million people who did not have insurance covered under the program. yesterday we see them saying, hey, good news. more to come. that is a big healing measure for some of the pain back in october. >> i wonder if there is a political this care. certainly if a republican comes in, but even democrats or modification. josh: you have a whole new clash players -- i'm curious what you're seeing in terms of political activity to help ensure these enrollments continue. >> it is fascinating, and this is the last year. back to 2010. if we give people these benefits , it would be very difficult to take it away from them. the onus is on the obama administration even though they have been lowballing estimates and saying we do not know how we will do, we wanted to look as good as it possibly can. you get the uninsured people bought in, insurers in. employers say,he look how i am getting hit so hard. they do not matter? back in the quite difficult. you see a lot of complaints from the chamber of commerce. small business associations did as well. a lot of these organizations, especially large employers, they're saying, this is the law of the land. they are treating this thing as, let's get in line. it is the smaller organizations getting choked. >> a lot of the smaller organizations, you do not have to follow a lot of the rules here in terms of providing coverage and things like that. i am not sure the polls are that favorable on obamacare. they do not generally vote. the erotic situation is bills are the people who, the least at the polls. as a result, you do not see the large constituency that you might. i'm just looking at hospital stocks and furiously .yping away at volatility shows you a spread between hospital stocks and health-care stocks. this is the health care index and it has done fairly well especially over the last few months. hospital stocks have taken off their they are massively outperforming the health index here. >> we see in october that is what we're talking about. everybody freaked out and all the sun, hospital stocks became much more volatile. >> they said is this program going to work out? hospitals suffered serious cuts when they agree to obamacare. we will give you millions of more. we are looking at where the hospital stocks are now. what do they look like? >> you look at the health care sector as a whole, it has done great. companies, let's keep in mind you have to put in the fact there has been a massive economic recovery. the health sector has by and large outperformed. these guys have done well. anytime you have the promise of 10 million or 20 million more paid customers, it is great business. >> a lot of government money. thank you very much for joining us. next, we will talk about how the amazon ceo has apparently helped catapult washington growth web growth. -- washington post web growth. ♪ vonnie: here is your latest bloomberg business flak. deutsche bank racked up $10 billion in suspicious russian actions. it might not be checked for money laundering. assets in some of the accounts are being -- andal reported between ford google could mean the company will be the first self driving car on the road. 40's ceo will announce the partnership next month. google wants an autonomous car on the market in five years. asus: amazon ceo jeff bought the washington post for $250 million. in twoer has surpassed months in a row. jerryg us to discuss, smith. i have to tell you i was a little surprised i heard this. a big push on digital. jeff: that is right. the new york times has a lot of subscription subscribers, one million. but was he going to do with it, and impact would he have, hef bezos, executives say does not have any involvement in the editorial side of the business, and that he was very hands-on in the technology side and the washington post at, which comes preinstalled on kindle. executives have conference calls with him twice a week. they have daylong strategy sessions. he has a lot of thoughts on the technology and how many advertisements should be on the website. he runs the washington post in a similar way to amazon in terms focused,very customer giving a lot of patience in terms of building out the scale on the digital side first and worrying about profits later. david: similar to amazon in a different way, to not these specifically focused on profits. it is not talking about revenues or profitability. gerry: right. it is a private company and they do not expose how many digital subscribers they have. unique web visitors in the united states where they surpass the near times in the last month. the new york times says they are very focused on getting people to actually sign up and pay for the content online. subscribingused on to digital subscribers. we do not know how many they have. stephanie: at some point he needs to monetize this. gerry: right. he said from the beginning he did not have a plan or a strategy at he promised expectation and that he would give them a financial runway. in the post has really been doing a lot of experimentation on facebook articles, and they .re also working with google so yes, at some point, they could flip the switch and look to make more focus on profits. telling me they're really just focus on getting bigger, being focused on an international for -- publication. weree they took over, they focused on being a local publication. they have had some losses there, haven't they? gerry: that is right. pretty consistent with the entire newspaper industry. it is certainly not unique to the washington post. print newspapers are facing real challenges. that is why there is so much urgency at the post. what the figure out business model will be, how can they figure out a digital strategy when readers are really getting content online and smartphones. bezosnie: i love the jeff model. just be great and who cares about making money? go, our luxury magazine nominates the 2016 cadillac, best sedan america can offer. horsepower on its automatic driver with a 60 mile per hour time of 3.6 seconds and a top speed of 200 miles per hour. maybe i will discuss it with matt miller during the break. we will show you the top trending stories on this terminal. might even talk about the rocket launch. pretty awesome. ♪ david: deutsche bank suspects russia trade $10 million, three-baggers to management committee. we asked you for yours, josh. what did you come up with? you look in places like california, there is a huge amount of distributed solar right now there are people are on theirolar panels homes. but they do not work well and people come home. companieslity generally deal with the problem? they have gas powered lance they can turn on and off. facilities saying that leaves battery stores instead. it is major. batteries are getting much cheaper. and the large plan he is doing, there is a long way to go before battery storage is cost competitive with asked. the fact that you see utility scale battery installments is a major change that can continue in the next couple of years. stephanie: you think that will be the case? solary people are putting panels on their house. are there really? they extended the tax credits for solar and wind. it is a huge credit. the next stage of that will probably be distributed storage. they expect to put it in their homes because then you can create the power in the day, store it in a battery, and use it at night. europee already seen in the impact large solar can have. big utilities are suffering as a result. stephanie: i am talking europe. last week, famed short seller came after casino, one of the french,companies in came out and said, it is financial engineering. that is what the company is using. we see it come out right across the board, shares drop. chanos.nhorn and jim these companies many times go into hiding and we do not hear from them. he might not realize who he has messed with here. first time hee has faced one of these battles. not just a phd in math. in 2012 this. in 2010. carson beng after -- warned, when we spoke to him, he said he just started looking at them several weeks ago. i am not saying the research is shady in any way. we are saying more and more say they back the company. >> much better prepared. you have to think about an activist investor and whether a short seller comes after you. you will not see major, sophisticated ceo's is suddenly caught unaware. stephanie: josh will stay with us. we do not have this anymore. i will have it in a few. when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. david: welcome back. you are looking at a rainy new york city. it is warm. 60's and 70's. josh snyder is with us for the hour. it is a little disturbing as we walk out. >> the weather here in new york was perfect. >> let's have vonnie quinn. vonnie: thank you. is nowber of refugees more than one million. higher than last year. president obama plans to host the u.s. summit next year on the crisis. to increase humanitarian aid. face ars ago, they will judge today and north carolina for charges of desertion and misbehavior before the enemy. years.r five they freed him last year in exchange for five guantanamo prisoners. the misbehavior charge carries a penalty of life. an nfl milestone forger reeves. career with more than 34 miles. three touchdowns last night. with breaking market news. matt: we are getting gdp annualized order over quarter. a growth of 2%. slightly better than the 1.9% number we had in the first revision. this is the second revision. or the third look at gdp. a little bit of that are consumption now. 2.9%. we get a little bit better course cpe. the fed sees it better because there is more inflation. over 1.3%. you can see futures not reacting . over 1/10 of 1%. , the secondird look revision, so s&p futures not really moving much on this. take a look at some of the .irline stocks an upgrade for spirit airlines. think it is interesting depending on if they're thinking economically or flight safety wise. hold,rade to a buy on the saying that if the industries favorite way to look at revenue. on the other hand, alaska was cut to hold from buy. their 94, 23.ce the analyst did not give one but analysts in general have changed consensus on the one year target prices. $112. airlines are interesting to watch today. feel is one of the biggest input costs after personnel. there are number of reasons you can look at fort stock today. we have got a great story out on that on the bloomberg terminal and bloomberg.com. you can see the stock in the premarket gaining one and a quarter percent. right now, we'll go to morgan stanley's media cable looking at comcast today. stock,alking about this the top pick for 2016. thank you for joining us. why comcast for this coming year? >> thank you for having me. unfortunately, it is the wrong for comcast. comcast is driving a lot of the changes yours seeing in the media ecosystem. they're coming from a division of strength. they have the best product on the broadband side. i think the proof is in the results. comcast has added almost one million customers in the last two years. it probably surprised a lot of people every day in the press. be the yearcould comcast adds video customers for the first time since 2006. the stock has not been anything the last two years despite growing. we think it performed for the wrong reasons. mediawe talked to big ceo's is a lot. what is comcast doing that is different from everybody else to word off losses and cord cutting. ofwhat is happened to a lot cable networks like espn, a lot court shaming. a lot of customers are choosing bundles that are more internet heavy. those bundles are being driven by comcast. they are the -- they are in the cable business. a lot of them are based on streaming. not traditional cable. you can watch them on any device. you think about two hours per day of netflix streaming, that means kind activity in homes is different for every u.s. consumer. a million broadband subjects per year. inferior product. a fundamental advantage they have. better products than when you look at a traditional media company. that makes a lot of sense. being the most valuable as set as far as the company is concerned. expect, -- >> we think the court shaming will continue. we prefer cable as it can see comcast call this morning. we think the trends driving consumers and contributors and others to create these smaller packages will just continue. outside there bundle. of 2016. think the end we are cautious on the media stuff. top pick of us his 2016, it is comcast. the -- like so many industries, being instructed by startups that of now turned into mega unicorns, the rare breed of private company now worth more than $1 billion. not thatpanies are rare anymore and some of them are now so did, early factors castooking for ways in the -- still here to give us new insight and jeff steiner is still with us. at some of these companies, airbnb, uber, how big they have gotten, whether or not they are justified, early investors say i want out. >> the jobs act in 2012 changed how private companies carried themselves. there is now over 130 p or you can draw a direct line between that change and that number. it is a focus on the flexibility of being able to remain private. these companies are still private. they do not have a public market on which to trade. that provided new challenges. the private market provided products that allowed investors to go through controlled liquidity programs that the company controls. and choose the investors the evaluation of investors they want in. they allow the programs to have complete control. stephanie: do they work? every cocktail party i go to, someone says, i cannot get out. >> it depends on the type of investor you are and how you got in. the companies will control the market. they will not allow an unfettered market to force that company public. earlier than they wanted to go. is investor selection. a lot of the opportunities really are not appropriate for retail investors who want liquidity. it is demand liquidity, still an institutional asset classes. people saying i work and we work. [indiscernible] >> we have almost 100 years of experience with sec has come in and said, these are the obligations in terms of closure and this is what investors can expect. what should be the obligations of these companies beginning almost to trade like a public market provide investors with what they need to make informed decisions? >> this is a nascent developing market. one thing we pioneered our standards for disclosure. we will not allow a company to run a program using that market. >> a base amount of disclosure. -- stephanie: david is getting very excited. david: that is a reasonable expectation. why is the base amount of information not enough. >> existing case law that has governed the transactions is -- mostown as 4.1 companies use to execute these transactions. this was tacked on the highway bill and it put forth a new federal exemption, that any private issuer would have to disclose to the purchaser and the seller. step actually the first toward analyzing, a positive first that. that will be forced and administered by the person shares -- purchasers. they are going to regulate it. it is federal law and the sec has the ability to come and take a look at these transactions. they either do an investigation or when the company comes public, they will go back and look at the activity and determine how the transactions took place and how they were priced. see now is ayou lot of price discovery and the markets. that is important to investors. we now have mutual funds and other investors investing. theoes not give investors clarity they need about what the underlying shares are worth. how do we get better price discovery so investors like fidelity could know what the underlying investments are worth. it.ther investors carrying >> it is part of a market developing p or in mutual funds have not been in the space before. they are typically put in a group called segregated assets. has a lot ofcovery experience in it. this is something where i believe in the next couple of years, we will see them enter the markets. bethe mutual side, it should known that a small portion of portionnds -- a small of the funds. if it is noten they volume, they actually trade something. where we actually saw paper move. you cannot do that here. >> i cannot speak to the back to method used but i would assume the analysts are doing a fundamental analysis of the business. stephanie: that is pretty fuzzy. >> you have a whole portfolio of private companies. you can look at comparable transactions and comparable public companies but ultimately, that is a subjective decision of what it is worth. >> the early-stage private companies, not of the deal because they do not get paid on anything they exit. on a public side, it is a different story. david: thank you very much for joining us, phil. josh, stick around. coming up, what is in store for biggest public companies. steve ballmer tells us what to look out for on bloomberg ♪ . ♪ -- bloomberg . ♪ vonnie: welcome back. here is your latest. inside both major rating services. $4.5 million. the japanese consumer electronics market was off in the last two days. nearly 7000 workers. mentorng to order a valuation but attorneys may take .estimony to doctors the ex-girlfriend contends he cannot make decisions for himself. that is the latest david:. david: thank you. when you want to talk tech, you better hear from steve ballmer. stephanie and i asked him of silicon valley's's companies. he did not hold back. twitter is a company that has all kinds of opportunity. there are all kinds of things that can be done better and i am impressed with how he has jumped on top of it. it is a strong underlying asset, the ability to improve for the product, the ability to streamline the cost structure on top of it. the ability to continue to drive monetization, jack is there. stephanie: we have to share our twitter question. me at twitter, what specifically will be the catalyst for a fundamental rereading of the twitter stock, wire the bear strong, and what are they missing? >> there will probably be a couple potential catalysts. number one is ongoing. the opportunity is there, he seems to have a lot of good ideas. product improvements, people will wake up and say well. product drives part of it. the other will be financial improvements in the business to when they show up, they will show up. they can be shorter term and longer-term. obviously, he is folk astonished. i think the company will perform better but it will also perform better financially. >> let's turn back to microsoft. it struck me that microsoft -- how important is xbox to the future of microsoft? two believe microsoft has rig muscles. .ne is a consumer muscle depending on the corner, you hear more about one or the other. if you ask me what i am most excited about, it is microsoft transcendence into a hardware company. books,x, the surface that is not a b2b business? i think it is a company that has to really find a direction which can really make progress. before you can find whether it is freestanding or like to be acquired. about 2007, we had a real search position for putting the two companies together. people have said they simply won the war. facebook went public and that was their achilles heel. >> i think facebook is a great company. they just continue to build it not under monetizing, super impressive. does facebook's's success main twitter is far behind? facebook is a social network and in a sense come you can say it is more of a news communication network. that is one of the things jack will work on. i think there are more apt were -- apples and oranges. strategy toto be a get into the cloud. they are late in the game. is it too late for them? it does not say much for the strategy? not know the strategy very well. i think there is a lot of of momentum really with microsoft and amazon in terms of core infrastructure. google is doing a good job on consumer stuff and they will try . all of those companies, this itzing cloud infrastructure, would take years for ibm to catch up and they do not have .iller apps without that, it is not clear how you drive the investment. i think they will struggle in the cloud. it isnie: people say special. but what is it freely. >> ibm has been a superb company that has a great cash flow. choose to read channel that. companies can be very resilient. a software company to a hardware and services company. taking the next that. maybe jenny will come up with such a strategy at ibm. i wish her well. >> bold statements coming from steve ballmer. >> this man clearly seems unhappy. i think the big reaction is, you ask most ceos if they would rather be in a software business or the hardware business, they would rather be in the software business. isve ballmer says the future in hardware. that is generally speaking a harder and lower margin business , fewer sustainable advantages. he is excited about it. that is a major difference in the microsoft strategy. especially -- stephanie: thecially given how strong strategy is. in a store, i drove by that microsoft store several times and it did not look like david: an apple opening. david:david: i think a lot of people like the product. it is generally speaking a business product. it does not drive wholesale adoption. that is why it is so tough. even when you have a killer product, it is generally speaking harder to maintain that advantage. stephanie: apple does make it happen. they are the exception. josh is staying with us. we will take a break. people are waking up whole lot richer this morning. the big payoff from the lottery next. ♪ stephanie: some people are waking up to see if they are a winner in this year's christmas lottery. a share is a whopping 2.2 billion euros. 75% of spaniards play the lotto. i like the optimism across the country. standard tickets cost 20 euros. i would love to know how many people actually vote. >> that is not a good sign. i thought these lotteries were new but they are 200 years old. the winners can only win so much. $2.2 billion. stephanie: josh steiner, i hope you bought a ticket. thank you so much. thanks for watching, goldman sachs. ♪ david: welcome back. 30 minutes and 20 seconds away. i'm david weston. it is our third hour. let's make it the best. an institutional block trading network, $14 trillion in total member assets. we have a lot to cover. let's give you some news. vonnie: the army sergeant who vanished off the coast years ago will be arraigned by military judge today north carolina. charged with desertion and misbehavior before the enemy. held by the taliban for five years before being freed in a prisoner exchange. it carried a penalty of life in prison. >> looking for a way to end syria'civil war. announcing today that negotiations will begin again in geneva. what to do about the syrian president. and ted cruz is getting on donald trump nationwide in the race. 28% of republicans surveyed back trump. ted cruz is 4% behind. marco rubio, 12%. that is the news. we are seeing a gradual climb up and to the right. s&p futures now putting up a gain of five points to the dow four putting up again of points. take a look at crude oil. it has been a story for the past couple of weeks. we typically see a drop-down at 7:00. crude is actually hanging out in the green right now. we actually ended the week today, though it is only in the morning of the markets have not opened yet, the best week since late october. crude is holding firm. brent turned negative this morning. 3631 per barrel. it has fallen to 2004 lows. we have not seen crude this low in 11 or 12 years. it is the fifth straight down day today. the global benchmark is still very problematic. chipotle has been down 8% over the past three days. a new outbreak of e. coli, or a different e. coli outbreak. the cdc saying the latest food safety woes are bad for people in kansas. tied to a wider outbreak. the stock has held up amazingly well since the first outlook. only down 19%. it could be much worse considering a lot of people going there to eat where e. coli reported, -- >> that blows my mind. matt: i live dangerous in you know that. and i really need to lose some weight. stephanie: you think a burrito will do that for you? matt: e. coli would. [laughter] stephanie: all my god, matt miller. let me just say one thing. if i will live dangerously, let it be doing more exciting things than eating at aaa. it is time for the stories that matter to markets right now. deutsche bank has identified -- the story blows my mind, as much as $4 billion in suspicious transactions related to its russian operations. in $6 million in so-called trade. to $10ings the total billion that may not have been embedded in money laundering. trading down today. i do not want to make a gross overstatement that if you do business in russia, don't you laundering?oney but if you are doing business in russia, don't you need to use exceptional cautiousness? >> of course you do. working in emerging markets, there are a lot of issues moving and out of the international banking system. it is the kinds of things that go wrong when banks wait too long when they go into their businesses. that this the fact happened between 2012 at 2015, not that i will give you a pass, but that was a different time. should the screws have not been tightened? >> absolutely. the big banks expanding without the measures, looking for more met -- more revenue with incentives that really created the conflict of interest where people overlooked a lot of these issues. it is just another potential .arge fine if it is too expensive, if you're going to do a job, you have to do it right. banks, you to govern have seen massive capitulation on the european banks, make the operations more simple to manage. understandust do not how to manage. stephanie: steve schwarzman has said he does not necessarily and view it -- view it as investment because i do not feel confident in the loft. narrowed downly immediately. it is too risky. of this time.s maybe it is too little, too late for a lot of banks. it is definitely getting a little traction. >> it is generally a good rule. >> sounds like deutsche bank is not doing as much out there. now to acks have risen four-month high after the country's leaders signaled they will take further steps to support growth. the shanghai composite has after a20% this quarter $5 trillion rout earlier this year. china stepped up again at least to say -- >> more flexible and forceful monetary and fiscal policies. we have seen a lot of changes happening in the chinese market. it is still babies that spirit still an incredibly different -- difficult market to predict how it will turn out. >> we have had so many whipsawed policies last year coming out of china. policy has, public of toolsre are a lot but continuing to change the investor confidence. taxes,s actually cutting making sure things are sold and things like that. >> problem is they went overboard in stimulating the .ousing market lossestrillion worth of not wise public policy. if they stick with the program, that would be probably better. stephanie: toshiba has been cut to junk status. billion loss for the fiscal year, which essentially would wipe out to decades of profit in just two days. shares have fallen in just -- just 20%. to achieve one of the biggest brands there. >> one of the biggest things i noticed is the lack of panasonic and sony signs all over japan. it used to be ubiquitous. we do not see it at all. home he people have a sony tv? it has been really the definition of the japanese electronic industry. this is the latest of what is happening of japanese electronic manufacturers. the really difficult thing to do in the japanese market selling off assets, lifting up its restructuring plan? is going to be more expensive for the drive-through structure. want to get rid of profitable assets, it is too expensive to try to get them back. >> it is a huge problem. there is one measure of success. fuji is the film company. they transformed themselves into a drug manufacturer, which is interesting. the problem is the japanese industry does not move quickly. it takes them a lot of time to go from one to the next. if you contrast fuji with kodak, you have one success story there. that sony,ble panasonic, sharp, and now toshiba look dead in the water. david: give us a quick look. matt: the market cap has been see this is a can five-year chart. we have not been this low since 2012. the market cap absolutely inshed and last night overnight trading, he dropped more than the night before. is interesting is if you take a look, going into the line tond change from a the bar, you can see the stock -- that did not work. come back to me. if i put in the last breakaway gap, that is the kind of thing you see one volkswagen was cheating on diesel, when bp have the oil well spill, the last sale price dropped and skipped a dollar before it gets to the next sales price. started withhe toshiba but we have moved beyond that. , butey had to restructure it was restating over $1 billion of revenues. obviously, there are deep cultural ties and they had executive leave and all sorts of things you do not want happening in critical kinds of restructuring. i slid are they watching? chinese and south korean? taking over china the world for electronics. japan's goal owns the luxury auto market. that is a great product and now we have to do something. stephanie: take us to the terminal. matt: i have gone back in and grabbed last price. this is the break gap when the last sale of the last trade does not even come close to the next. death knows this well from operating markets, but this is a bad sign for technical analyst. you only see it in a few cases like volkswagen where a stock gets absolutely crushed. it is difficult to turn around from that thing. >> it could go into a death spiral depending, but it is very difficult to reduce costs faster than the revenues decline. >> a lot of that comes from employees. they are a protected cost. they cannot just make cuts. that is wrapping up the three stories that matter to the markets now. one thing we are watching is we are heading to the opening bell. we are 18 minutes and we have got to take a look at oil and where it is trading this morning. it is going in one direction, down. we have not seen it take a positive turn in quite time. we will look at individual stocks moving up and down in the premarket, hoping a few days before christmas for a little bit of green. stick with us. ♪ vonnie: welcome back. a deal between ford and google could mean the company is the first to put a self driving car on the road. ford ceo will announce a partnership saider hat -- google has it is getting in the market is in five years. , 2% rate in the fourth quarter following a 3.9% in the second quarter. the number was reported by consumer spending as the business struggles to sell overseas. the worst year among the world's's wealthiest people. since the start of 2015. shares of the mexican tycoon telecommunications giant are headed to the biggest decline since 2008. the world's's fifth richest person earlier this year. matt: let me give you a few stocks as we head toward the opening bell. tom posted a second-quarter loss that trailed analyst estimates. this company made chef boyardee, orville redenbacher, but really not getting any growth. revenue and consumer segment down 2.9%. up about 13% this year. if you take a look at what is going on this year, you see a lot of consumer staples have performed well. they make a lot of those, but they are not seeing a lot of growth, a concern in today's trade. take a look at premarket trade. in these is down premarket. the company made products used for a work environment such as office furniture. outlook of $75 million. for $772 million. at the highest, the outlook is missing the street. the same is true with eps. i finally want to talk about foot locker. shoe sales stocks have been raised from underperformed. a double notch upgrade. 22 price target raised dollars from $19 at bank of america, merrill lynch. expand, andgins foot locker was raised. $70 from 60. raise iner could mid-single-digit. you know what we will talk about when we come back on the other side of the break, one of the most important products they sell, nike. todayth earnings later and we will tell you what to expect from the company and how the stocks will react. stay with us. ♪ stephanie: welcome back. nike shares are up in the sports apparel category. a big question for investors is whether the athletic category lining to aa silver challenged u.s. retail sector. can covers apparel and footwear for -- and footwear for bloomberg apparel. seth is still with us. the retailok at universe, especially department stores, they are getting killed. the shining points are the specialty shops. nike and under armour are little less adidas. >> we look at the category as a whole right now, and the sales data and some of the other retailers, we see the category and demand for a clinic apparel. remember it comes outside the u.s., places like china and western europe, where the penetration is a little lower at this point. still 45% of the revenue comes from u.s. looking into 2016 could be more tricky. stephanie: specifically because of china? a big win is coming up. >> one event is the world cup of soccer and the second is the olympics. the focus of what will come in terms of that event, it is a platform. they will set the tone for the next couple of years. >> one in particular will be you be looking at? is it foreign-exchange? what are you looking for? >> it is definitely one thing i will look at. i will focus on future orders. if i'm a us-based retailer and not having good quality, and i am finishing it with a high inventory level, going into next year, by the time i will order, i might the a little more conservative, and it could definitely be in the u.s. like nike. >> the big story lately has been the lebron deal. how do you figure that into the overall nike earnings? >> i do not know how much affected will be on the earnings. a great move by nike. being a little defensive. remember what happened with under armour when the price got jacked up because of them fighting over kevin durant. at the end of the day for companies like nike, yes, your products are being warned by big basketball stars, but it comes down to products. if you deliver to consumers a product they love for performance and aesthetics, you will do well. risk that is it a nike has more competition or a positive the entire category has gotten bigger? comp is likely vice, they get hurt because lifestyle branding is all about athletic apparel now. >> it is different. we live in a culture of sports. the borderline between fashion blurred at this point. you are right that have a more competition makes nike think a lot more about the products they deliver and think about their marketing a lot more. nikeanie: how bold up on and apple are you? it seems more like they are focused on connected health and fitness and they are tied very closely to nike. classy have got to look at the competition. different apps. they are getting to be the dominant player in the digital era. nike way before that. something they have to focus on, another ad company. the digital conductivity, it is one of those traditional times where at the end of the day, we will see a lot more foot well -- footwear connected to cell phones. is a big frontier for the companies. andhanie: nike walked away acquisition seemed like small potatoes compared to what under armour did. >> that is correct but i think all of the companies decided at some point they want to be out of the hardware business. if you have an iphone, they want to be on those devices. i think that is where they see a lot of the opportunity. just listening to stephanie, i thought, i wonder what has been a better investment, nike or apple. i pulled up both stocks and normalized them. the green is apple and the light is nike. nike is just edging out apple over the last five years. it has been a better investment. >> to come back to you, break it down for me. in nike's earnings between shoes and other apparel. 60% ofs are about revenue. inittle bit more of that terms of the operating income. other. shoes and speakers are definitely driving earnings for the company. there is a lot of talk about whether. you might argue the great weather we are having -- stephanie: i hate talking about the weather. we will take a commercial break. thank you for joining us. nike earnings out later today. ♪ stephanie: a plea or 30 seconds away from the starting bell. the harlem globetrotters are down there. futures are up. the dow is up. they are heading in the right direction. i can hear the bell ringing. we're joined by kevin. we are about to have a very good morning. i'm predicting her in -- it. seth: it's close to the end of the year. where'd you see the opportunities for investment next year? kevin: we're going to have a santa claus rally. i do think it will be as high as many are hoping for. we will finish higher over the next few. i think 2016 look a lot like 2015. the baton will be passed from u.s. markets to international markets in terms of growth attentional. for the first time in the past six years, we will see international markets outpaced the mystic markets. seth: you could see japan's markets on a tear. assets have gone into european markets for the past five years. they have outperformed us. i believe the pe overall is higher in europe than in the united states this point. kevin: once you bring those back into u.s. dollars, they are down. the strong dollar is hurting some international investment. many strategists like myself are looking to allocate money overseas, trying to take advantage of the economic recovery. similar to where we were back in 2009. is that equally true in japan westmark --? kevin: a lot of that his led by intervention as well. they are lowering their own interest rates. our federal reserves were more quantitative. we were becoming lower in terms of the overall interest rate scale. but led to one of the greatest bull market runs. stephanie: will the street be disappointed? he did not take the bazooka out. qe couldd the act in be going on for the for seeable future. kevin: i think the street was wrong. he's making a chart. think they are trying to navigate their own economic recovery. that may take longer than what we've seen in the u.s.. strong ine outlook is european markets. >> how much influence will china have on this lesson mark --? kevin: i think they are a big global player. some trying to allocate the outtakes in terms of what the government will try to do to stimulate growth area we will wait and see. i think there are better opportunities away from china next we're -- year and away from emerging markets. seth: the emerging markets are cheap. that could he an opportunity. if china does benefit from their stimulus are in japan does not have the same tools and flexibility in terms of their stimulus. their debt to gdp rating is high. he can't put more debt on the balance sheet area --. mentionjust heard seth japan outperforming. that is true. dead i normalized this over the last five years. you can see that jeff and has up warned the u.s. and europe. switch over to price-to-earnings ratio and see how that looks as well. >> what you say is right. is that why? that japan is full of savers. japan is problem with they want to get to sit inflation. the higher the inflation rate, the higher the interest rates could go. that means more bankrupt they could become. it's threading a needle, a very fine one. kevin: you could say the same thing about the u.s.. we're trying to get to 2% inflation consistently. they are threading a needle in respect to how they are going to get there. stephanie: last year, it was a marquee moment. some would say for years. moving millimeters. kevin: i've been wrong before. i thought they would raise again in september and they finally did december. meeting,ok at the last we are looking at a rate between one and investors should start considering their folios in ways that have traditionally done well. areas like energy. utilities. i think everyone assumes with utilities once interest rates rise, utilities become less. that's true if they rise dramatically over short amounts of time to if the rate is 1% at the end of 2016 and you're looking at a 10 year treasury, it still looks be attractive. stephanie: inflation makes 70 concerned about being in a high-yield market. the argumentke that this is finally the opportunity where there is no value in high-yield question mark --? fed hadhe last time the , highual type of rates yield was the best performing in that time. i know it's different and performance does not guarantee a future result, you can't ignore that. there is no risk premium really. people were paying through the roof and now we are starting to see the fallout from that. stephanie: was this a risk management issue? if you have investors like 3rd avenue investing in seed private that's an issue of wire you buying a deal like that when you are offering liquidity? kevin: is it distressed or is it non-rated? you have to look at what's in the high-yield. what's different now is the high-yield etf's have the same issues. they bought all the lowest level. you have daily liquidity in the ats. because of the big moves in the high-yield, people start to see red on their statement. they will start selling these things. there is no liquidity. that could lead to additional selling. we have a massive amount of money in the etf's. have a hard time redeeming assets. stephanie: they are the actual equity. up the just pulled orange line. this is the high-yield return index. years, this is a five-year contract, it has up formed while lot. these cowboys are doing a lot worse than the general high-yield index. seth: is there going to be contagion? it starts with the energy bond. are we going to see a lot of contingent. at the pins and how much selling there is. , they own the underlying asset. they have to sell the underlying assets. the whole market structure changes. there is not the liquidity that used to be there. next thanks very much for joining us. we are a little over nine minutes into the trading day. matt: by the way, we're looking at gains across the board. i am really focused on oil. we saw a different oil. that has come back up. crude is trading at $35.91. it's been the volatile this morning in look at the global benchmark oil. it's still down. texasread between west intermediate is getting very tight. it's not a good play anymore. look major indexes. these are not huge gains. the dow jones industrial is at 2/10 of 1% and the nasdaq 1/10 of 1%. i have pulled up the price equity ratio of different indexes around the globe. i've let up. i showed you previously that over the last five years japan has really outperformed the s&p and in europe. when you look at the price-to-earnings ratio, you can see the opposite is true. the higher price earnings ratio in europe, the s&p is firmly in the middle in japan is down on the bottom. the go back to today's markets. i want to look at the 10 year yield. it is spiking right now. it's a little bit of a spike i guess. it's only up to basis points. treasuries are so enough of the first time in four days. this is the market you want to keep your eyes on. maybe if we get that santa claus rally, people take money out of treasuries and put them in equities. let's go down to abigail doolittle. abigail: that's right. reaction to the announcement that the cap is acquiring solid fire for $870 million in cash. they will boost the storage company in flash. the street is mixed on this. analystwith the senior and he is published. he says i like this acquisition. sentiment is so negative and this gives them an element of growth as a deep value play. say not much has to go right to have stock were. stephanie: thank you so much. return, more on the high-yield market. we find out. stick with us. ♪ funny -- vonnie quinn: the powers will with the government use the internet browsing history of u.k. citizens. apple says threats to national security don't justify weakening privacy. chipotle is being investigated for illnesses in three more states. people have become sick from an e. coli strain with a rare dna fingerprint. unit chipotleted before they became sick. jpmorgan has downgraded the stock to neutral. has filed ane arbitration case with the regulatory. poached staffirly from their private ranking business. they wind down the financial managersnd about 70 left for ubs that is your business class. stephanie: are to take a closer look. we were talking a high-yield market. we were talking about 3rd avenue going down. we need to talk about volunteer the -- volatility. inhave record outflows energy. volumes in etf's are getting your. seth is still with us. i want to talk about bonds. you have been talking about this for months. now we are seeing things a lot dicier. give us a status of it. in institutional marketplace. i've been on the forefront of that. not with much success. this is a centralization of the institutional liquidity. you have the deals to provide enough capital to take his bonds and they don't have that capital anymore. stephanie: we have established this and talk through what it's going to be and what it's going to look like. now we look at the credit market and we have to ask the question. there are only buyers or sellers. what do you do in a time like this? seth: that's an interesting fallacy. when the high-yield volatility we launch our market. we launched in september. it's been a couple of months. what we saw was a match rate spiked to 8%. spreadblem here is the widens tremendously. arriving on a price, we don't have a best offer to guide the price. that's a problem in the bond market. there are buyers in the stocks in that's what makes the marketplace. you've got a hedge fund that buy.i -- we have about 140 of the major asset managers in europe and united states on this but. we have about five in dollars in equity. -- $5 billion in liquidity. you've got a parcel solution. stephanie: we were speaking was buyingerday who assets from a 3rd avenue. it was a closed-door private office. if that's how the stranger going down, that doesn't help. seth: it's not an all or one kind of solution. not one stock exchange. the attorney general's office has investigated. bondsu've seen bond -- will that change regulations? seth: we are just very start of this. there were equities was 20 years ago. equities and salt manual. today, there is very little a telik -- electrification. there is no electrification. i did not know that was a word. seth: it is now. you are describing it, you give the high-end more transparency by giving them a better order flow. is it one or both or neither. seth: when they want to trade one million shares of thing, they need very different tools. the market, the changes are radical to rebalance the price formation. it would be great if we had an exchange for bonds that allowed pricing transparency. there is no mechanism. what institutions need is a place where they can get all of the liquidity outside the purview of other traders that might take advantage. the mutual funds manage money on behalf of these little people like us. we don't own bonds ourselves. stephanie: what is more important for high-yield investors? performance of companies or trading liquidity? seth: liquidity by far. if you talk to any institutional investor, it's liquidity if you is't get out, the problem the companies will not change from day-to-day. but liquidity will and that will affect the price in -- cap and pricing. you cannot get the same pricing for the bonds. create an that investment opportunity western --? -- western mark seth: who ever bought long-term capital bonds made a fortune on it. they can hold that to maturity. they can hold through the volatile time. when you have exemptions and you manage other people's money, you have to sell those underlying asset. keri: are your competitors hotting your heels on this western mark --? will be see more of this from alternative trading platforms? seth: i assume so. they just announced one in europe called neptune. this market has to go more electronic. the dealers have no capital left to facilitate trades. that's the equivalent to the stock exchange is appearing from trading equities. we have to create a new market structure. the only structure that is viable is with more technology. we have centralized all of this large institutional buddy into one place. -- liquidity into one place. >> how big is this? seth: we are nothing to write home about. it's extremely small. we are two months in. we are building the amounts of look what he and the number of firms coming in. we are not yet a solution. we're building that. stephanie: how long will you give yourself? how long before you have to be at x? seth: we will be making money by the second order of next year. the trajectory is real word. i worry about making money. >> thanks for being with us three times today. we will get some final thoughts on bloomberg . ♪ stephanie: welcome back and merry christmas. we are getting final thoughts. your hidden we don't know about her in --. seth: we will start seeing dividends from low oil prices. from two dollars per gallon will be a huge psychological plus for consumers this christmas going into next year. flows ofee additional money. i believe it will come into the market. that could give us a lift next year. stephanie: final thought. thank is a much. happy new year. us ons going to do it for boomer go. new york stock exchange president will be with us tomorrow. see you then. ♪ betty: welcome to bloomberg markets. it's 11:00 in hong kong. i'm betty liu. from bloomberg world headquarters in york, i am eddie lee. this is what we're watching. ok. we're looking at existing home sale prices that are just about to come out. they just came out. i want to get to the markets --. grade to 4.7 6 million. that is much lower than we were expect. we were expecting home sales to have little change. that was according to a survey by bloomberg. existing home sales are

Related Keywords

New York , United States , Moscow , Moskva , Russia , Japan , Tokyo , Shanghai , China , North Carolina , Texas , Afghanistan , Alaska , Stanford , Illinois , Beijing , California , Virginia , Syria , Washington , District Of Columbia , London , City Of , United Kingdom , Mexico , South Sea , Brunei General , Brunei , New York University , Iowa , Geneva , Genè , Switzerland , Elon , Hong Kong , Kansas , South Korea , France , Spain , Chicago , Hawaii , Spaniards , Americans , America , Chinese , Mexican , Russian , French , Syrian , Russians , South Korean , Japanese , Jerry Smith , Steve Schwarzman , Marco Rubio , Jim Chanos , Peter Klein , David Einhorn , Santa Claus , Jeff Bezos , Matt Miller , Abu Dhabi , Eddie Lee , David Tepper , Michael Spence , Megan Murphy , Steve Ballmer , Abigail Doolittle , Airbnb Uber , Andrew Cosgrove , Keri Geiger , Josh Snyder , Tom Keene , Jim Bianco , David Weston , Betty Liu , Josh Steiner , Ted Cruz , Jeff Steiner , Alison Williams ,