More volatility today. The s p did fall nearly 4 last week. Stocks are heading for the worst since december. I want you to look at the imf function area this is a look at the performance at the s p 10 sectors. We are seeing an acceleration of declines. Seven of we are seeing the 10 sectors in the negative surprising that energy is down 7 10 of 1 because of what is happening in the oil price. The biggest story of the day here. What are we seeing in the oil markets . Basically we did see oil fall below five dollars per barrel. Talkingpped positively, about volatility for a hot second, now it is trading down again. Row, butecond day in a off of its lows. The crude is at its lowest level since february 2009. Natural gas. Down 6 right now. We saw its lowest price since 2002. This is because those weather forecasts keep talking about warmer weather because of el nino happening in the pacific ocean. Is up sixr yield basis points. Equities push into positive territory. Sinces the biggest rise december 3. Thank you so much. Lets check in on the first word news. Vonnie quinn has more. Vonnie the kremlin is not commenting on an ejection report saying there is no terrorism in the crash of a russian airliner. She says is no hint of a terrorist attack but does say the investigation is now done. A branch of Islamic State claimed responsibility. Down planewent went down on october 31. A bus crash in argentina killed 41 Police Officers. The bus went off of a bridge and plunged 65 feet into a ravine. 19 people were rescued. The creditors will counsel 8. 5 billion dollars over new interest in exchange for cubas promise over the next 18 years. 18 nations will try to speed up the pace of a mission in the new Climate Change deal. The u. S. , germany, and japan are among those developing the carbon market. Making it the worlds largest. And Serena Williams is Sports Illustrated sports person of the year. The tennis superstar is honored on her own by the magazine in 27 years, the first one to ever done that. Including the australian open, twoch open, she came within matches of the first grand slam in 27 years. You can get more on these and other breaking stories at the new bloomberg. Com. I am vonnie quinn. The market is also focused on the med on the fed this week. Raising benchmark Interest Rates for the first time in more than a decade. Lets bring in carl. Good to have you with us. Is this all but a done deal . Unless there is some spectacular blow up in the market with a geopolitical event, the fed is ready at last for lift off on wednesday afternoon. Looks like probability of a move is 76 . Pretty stable. Decay sol see a slight that a rushed toward 100 . That is him uncertainty over what is happening in the markets , geopolitics, terrorism, etc. The take me to the Conference Room and d. C. Will they be getting attention to what the pace rates may be Going Forward . Boards principally about whether to do it . Thehis is about postliftoff pace. The fed has really struggled to get the markets focused on that as opposed to the lift off. Collectivereathe a sigh of relief to change the direction of the conversation. They will be careful how they signal that slower pace Going Forward. Through thevenue is plot, that signals 125 basis points of tightening. They will cut that as much as in half. Toaddition they are going have to provide some clarity on where the next hike is going to come. Indicate theys think that next is coming at the march meeting. I think it could be later given did oil prices, also the ongoing disruption in the financial market. Remind us how you or frontier this is how new a frontier this is good yes they are exercising caution that there is a lot of concern how this might playoff. Is not new territory, because ot of Central Banks try to they know the fed is successful and dont have to backtrack or add additional cant additional quantitative easing. Inexpect it will be the case the next threeyear timeline. We could see this return. Failure to launch. How do you sustain rates on paper . What were they due to keep that happening . Anthey would be moving as excruciatingly slow pace. Janet yellen has told us time and time again the best insurance to having to cut into the future is keeping rates lower for longer. The new york fed has sent the same thing, talking about letting the economy run hot. Some real inflation pressures, which i dont think we will see in the near to medium term, the fed moves at this slow pace. The economy continuing to expand. That should hopefully mean the fed can avoid backtracking. The fed is going to be closely attuned to the dollar, the strong dollar is clobbering exporters. That is all reason to be moving slowly. Economist our chief economist. Trader of 35 per barrel for the First Time Since the financial crisis. Pledging to boost speculations. Opec members will exacerbate the global supply. Joins Us Intelligence now, we saw this low. This is a function of elevated inventories across the Petroleum Value chain. If you take a look at crude over the u. S. , 33 above the fiveyear average. That is an and norm us amount of stuff in stores we have to get through. Also above average. Without this oversupply this demand coming on through. You have these wider imbalances globally and in the u. S. A focus has not been announced on the u. S. How does this shakeout . Do we see slowdowns across the country . We have production will above 9. 1 billion barrels per day. Cut, over aa 50 60 cut in prices and an extraordinary amount of capital removed the industry year over year. This resiliency of supply is something we have spoken about into late 2015. 2016 the tables may turn as hedging becomes more of an issue. Liquidity is there. See the the company same cost concessions, these unit costs they saw in 2015 at 2016. Let me ask you about iran. Iran is saying these new sanctions plan to flood the market with a lot more oil. Is that all but guaranteed . Itremains could in remains to be seen how quickly they can bring storage back into the marketplace. Atthey are producing their height it was roughly 3. 8, 3. 9 Million Barrels per day. They are a very strong producer and they can bring into the markets a lot of out put. Maybe in 2016 you see half 1 million barrel per day increase. That capacity will weigh on the market, it will govern the price response of the marketplace. What have we been seeing in natural gas as well. M a similar dynamics regionally. You have a flood of out put from the basin. You have the shale plays producing an enormous amount of natural gas. The base of roughly 75, 76 per day. Will likely continue because of the economic advantage they have relative to other plays in the united states. We appreciate it. Energy analyst here bloomberg intelligence. Coming up on the next halfhour, domino effect for junkbond ands, refreezing reduction using capital partners, liquidating its entire portfolio. We sit down with bloomberg he sits down with bloomberg exclusively. Iss Climate Change policy back on the table, but a big question is how will the nations enforced this new agreement. The stories and more coming up. Marketsad back to our desk where we check on some company movers. Im looking at analyst calls in the retail as well as the tech space. Gopro shares are plunging. 12. 5 . Own by Morgan Stanley cutting its price target by nearly in half. Analyst expecting high inventory next year, as well as a slower opportunity. Shares are down 69 . Mattel are going the opposite way. Mattel is a 3 . Graded its rating to outperform and raised its price target to eight talks. This could be over sales for the new barbie dream house. The 12 month target price is 33 per share. Coaches trading higher today. Raising its call to overweight by neutral by first pointing to the signs of nearterm improvement thanks to new products, as well as a better allens of price point. Better balance of price point. This a stock is down 19 year to date going into today. Walmart also on the move. Also up by half a percent. Named it the top low oil and gas price idea. Its thathat lower income consumers will stand to benefit from the lower gas prices we talk about there. And it is a fleet of transport vehicles that come up to about 6650 trucks. You have to think about it, it is pretty much a nobrainer. The selloff in the high yield that market shows no sign of letting up. It comes days after he announced a Credit Mutual Fund overhaul redemptions. Capital partners have liquidated its entire portfolio you joining me now is Christine Harper to talk about this. Christine it is a good question. It is a fund that has sold all of its assets. They were a hedge fund. They were basically set up in 2009 to trade in the high yield. Nd these credit indexes those markets have been a lot quieter than in 2009. In part because it was a oneway trade for a long time. They were down a little bit. The reason they are closing is because they had one big redemption request in october, and they realized it wasnt going to work for them, so they decided to return all their money to investors. They cant return all their money to investors. Gates to tellese investors to basically hang on. If we are not going to do a fire you, we are going to get your money, but it is going to take time. Third avenue are trying to find out if they can. Before i ask you that, we have a bit of tape akin august addressing some of the concerns about the sector market. It is a change evolving in the market every day, and people are learning how to adjust. There will be a lot of winners and a lot of losers. The most important point is the opportunity it is creating, because this location and prices are exacerbated by what is going on. Alluding to difficulty in the space. Happenedirroring what a few years ago. That is one of the Big Questions everybody has. Funds that got a bit risky. Or is it something that is going to ripple out in parts of the southern economy or other parts of the Financial Sector . No signs that was happening, but people remember back in 2007 a few funds have problems and a few banks have problems. Are working very hard to try to figure out what happens next. The character of the high yield stress investor is like david bars. Whenever they see prices they want to take that risk. Be successful and make you money. The problem is when nobody wants what you got and you want out, that is not a good place to be. You were talking about how things have changed in terms of regulation. Theres a lot of risk associated with this sector. It has grown enormously. It is a lot bigger than it used to be. The fed is pushing down Interest Rates on everything that was deemed as a safe investment. For ways they can get more return on their investments. Thinking this will be ok. Always looking for an opportunity to move on their returns. It really does tend to turn like what we saw on 2008. It becomes very illiquid. Regulation has reduced the willingness of the banks to go in and take chances. In some ways that was by design. They dont want to have the taxpayer pale taxpayer bail them out. We will see if the banks take them to the risks themselves. , on the road of recovery and an exclusive interview with the royal bank of scotland. Time now for the Bloomberg Business flash, taking a look of the biggest business stories in the news right now. Takeover offer probably wont be better than the one that is on the table. This comes from the china resource in my conductor. Last month oh m agreed to by fairchild for 2. 4 billion. John corporation has agreed to be bought for 15. 4 billion in cash. Such as k2brands skis and yankee candle. You can get more Business News of bloomberg. Com. The height of the financial crisis, the royal bank of scotland is still on the road to recovery. He has limited thousands of jobs and shedding assets. Bloomberg spoke to him about the banks commercial loan book. Our exposure is a lot lower today than it was seven years ago. That will be address the next couple of years. That could be an issue in the stress test taken at the end of this year. I would be a bit more comfortable if i could have less exposure. Parts ofe been selling their book and there have been strong buying positions. Think we will be in a very strong position, especially from the commercial real estate. It has been a mess of change in this organization. Everybody passes the stress test. There was a line in there for you have done some actions with citizens and capital. Short in some parts of the assessment. Can we identify . Can we identify where you were short . We still have some large areas of litigation. The big one sold off in 2015 and 2016. We dealt with the Foreign Exchange issues. We have the security issue in the u. S. We dont know how big it is, but we six but we suspect it will be a big one. Is overind of numbers 30 billion mortgages that were sold. Is that what we have to prepare for . We have to prepare for the worse case scenario, which could be 13 billion. The next part of the issue is how big is that number . The analysts got through a big number. Our own internal work and say what could be the worst case situation . I want an incredibly strong bank here. I never want to see the obvious go through what it went through on behalf of customers and behalf of their shareholders. One of my hallmarks has been billed capital. You have a very Strong Capital base. Been what we have they contact the litigation. We will see those items through and finished. Live from bloombergs headquarters in midtown manhattan, you are watching bloomberg markets. Vonnie quinn has more from our news desk. Ie u. S. Officials have insisted that there are no Credible Threats, but the San Bernardino shootings have risen concerns. Tosident obama will travel the pentagon. Ted cruz is leaving and i walked 41 days before the caucuses there. In iowa 41 days before the caucuses there. Among democrats, Hillary Clinton ninepoint lead over Bernie Sanders in iowa. And Chris Christie will be back debate tomorrow. Based onthe decision polls. Closing arguments today in the freddie gray case. Former Police OfficerWilliam Porter is charged with manslaughter and other counts. Held threebeing years to the jason is the new town massacre. This is the first time the anniversary has fallen on a school day. Vigils are being held three years to the day after the new masker. Newtown you can get more on these and other stories hours a day at the new bloomberg. Com. David thanks so much. It is time for a bloomberg quick take. Im alix steel, here with the bloomberg quick take to keep you informed. Todays topic is the Climate Change pact. It is the biggest step yet to stop Climate Change, agreeing to an ambitious deal. Heres the situation. A hugel calls for investment in reducing the output of Greenhouse Gases damaging the earth pro atmosphere. This year is on track to be the hottest on record and rapid industrialization means the world is unlikely to meet the goal of limiting the temperature rise to two degrees celsius. The first such agreement since the kyoto protocol. The last such push for a deal in copenhagen was back in 2009, and that ended with legallybinding targets. The private sector has been making strides to reduce Greenhouse Gas omissions. Homeowners are taking advantage of energyefficient technologies and the cost of her new mobile energy has fallen. Rising Consumer Awareness and pressure has provided momentum for the global deal. The next challenge will be spending. According to the International International energy agency, it will require trillions of dollars on spending. But after this Historic Deal in paris, policymakers must decide who will pay for the portion to cleaner energy and how to quickly replace fossil fuels with renewable technologies. Thats todays bloomberg quick take. Or more, visit bloomberg. Com david . To flag a note from the white house where president obama expressed appreciation for chinas role in finalizing the deal. That after a call with chinese president xi jinping last night. The World Bank President says place fors a great investment. We have two main deals in geothermal energy, around hydroelectric hour. I think there will be a lot of economic, Investment Opportunities for the private sector. David let me bring in matthew chiefll, bloombergs business correspondent. Good to talk to you. Many leaders were making a pledge beforehand. How involved were they in the summit . They wereguest certainly present. This was an incredible outpouring for some kind of deal. The joke was the Climate Summit ds the new. Posts the new avos. World leaders are the decisionmakers in the end, but it certainly gave them a tailwind having big chief executives from Big Companies saying that they want to see change. You say big chief executives from Big Companies. Walk us through who are the winners and the losers of this. Fossil fuels are not going away. Oil andll be lots of gas used in the world in the next 40, 50 years. But we will see a gradual and not so gradual shift from capital. If youre in the coal industry, you are an enormous loser. If you are making solar panels, things are definitely looking up. David a lot of activists say that this deal did not go far enough. But so much is inchoate. You look at businesses, how far out have they drafted plans and how will they