p.m. in hong kong. welcome to bloomberg markets. from bloomberg world headquarters in new york, good afternoon. i am scarlet fu. here is what we are watching this hour. a controversial pharmaceutical executive fight back. in an interview on bloomberg television he defends a huge price increase for a drug. he says it is still a formal. we will fact check. trouble in walmart -- consumers are finding cheaper toys somewhere else. consumers are spending less, saving more, even as wages pick up. what that means to the federal reserve as it ponders raising interest rates. we are one hour till the close of trading. we need to check in with julie hyman at the markets desk. a little bit of direction, but not much volume. julie: not much direction -- a little direction -- we see

increased across the board. the nasdaq doing the best of the three major averages today. you have the groups on the move. health care consistently has been doing the best, helped in part by pfizer and allergan, which are rebounding. discretionary stocks preforming relatively well as we await the surge of the holiday shopping season. energy and utilities have consistently been some of the weaker performers of the day. energy is now on the bottom of the list. volume,rlet talks about this is an illustration -- volume by group versus the 20-day average. all the bars are lower. all of them are down, illustrating in real terms the drop we see in volumes. industrials is having the steepest drop, down 45%. scarlet: which sector has seen the least amount of drop? julie: health care, and that is

the best performing group. makes sense. scarlet: even though it is relatively quiet, there are some big movers. julie: they are still trickling out. deere came out with earnings, and those shares are on the move higher. a surprising report. deere has been struggling with equipment makers for agricultural uses, because crop prices have been falling, but earnings fell less than estimated and forecast 26 -- 2016 profits ahead of analyst estimates. q ande been watching hp hp in their last day as a combined company. , inett-packard enterprises contrast, doing better in terms of its contract related -- commentary related to the call. on the, sun edison, shares are

ell at ubs.raded to s the ceo of sun edison moved to be the ceo of one of its affiliates. israform has been formed -- looking to buy. there have been questions about its liquidity position. shares are falling again. as we talked about earlier, this is a stock twice as volatile as the russell 1000. scarlet: credible. julie hyman, uso much. -- incredible. julie hyman, thank you so much. let's get a check of the headlines in the bloomberg first word news. president obama wants to assure the american people the u.s. is doing everything it can to defeat the islamic state. president: in the event of a specific threat, the public will

be informed. we do think it is useful for people as they are going about their business to be vigilant. if you see something suspicious, say something. that is always helpful. but otherwise, americans should go about their usual thanksgiving weekend activities. scarlet: eating and football. aesident obama spoke after briefing with his national security team entered intelligence officials are working around the clock to keep the country safe. ine president joe biden is croatia meeting with leaders from southeast europe to discuss the growing refugee crisis. about 5000 migrants are entering europe every day. indonesia is increasing security across the country after a video surfaced threatening attacks on jakarta police headquarters in the presidential palace. security has been tightened at airports, embassies, and shopping centers as well. home, the hurricane

has strengthened. it is the strongest hurricane in the eastern pacific for this late in the year. forecasters say it is expected to strengthen even more in the next four hours. it could become a major hurricane. -- 24 hours. it could become a major hurricane. right now it is not pose a threat. get more on these and other breaking stories 24 hours a day at the new bloomberg.com website. while the s&p 500 hovers near three-week highs, the next guest content a cyclical bear market is underway. joining us from minneapolis, doug ramsey, chief investment officer at leuthold management. i want to start on the management side -- people say we are on shaky ground given the age of the bull market, seven years. we just crossed where the 50-day moving average moves below the 200-day moving average. are we on shaky, technical ground?

mr. ramsey: i agree with that, but the moving average work does not have a lot of predictive power. i would argue in some cases it can be good for decision-making, to deleting it -- it a point. we use it to some extent. i would argue it is the more anticipatory pieces of technical evidence that give us the shaky ground, and i almost go all the way back to the end of december last year when you topped out the dow jones transportation index and you topped out a number of different measures. we looked at daily advanced decline lines on a number of industries. a lot of them topped at the end of december. you could argue that was the internal peak of the stock market. ofonth later, in generally this year, you got the utility stocks to top out. it has, sort of, been a progression throughout the year. the s&p 500 is unchanged year to date.

at theeally misleading average of the equally weighted portfolio. arelet: so the conditions actually a lot weaker than the headline number would seem to suggest? mr. ramsey: absolutely. the s&p 500 -- we turned bearish in early-august, and the s&p is really unchanged from when we made that call. the russell 2000, a lot of these equally weighted industries, which are more reflective of the average investor portfolio, those have all underperformed. another group, outside of the stock market that does have leading properties -- junk bonds. junk bonds are well below the lows that the stock market made in late-august. that is another warning sign. it was prescient when you think back to 2007, the warning from junk bonds. scarlet: credit leads everything. high-yield spreads have not

recovered, but there can be dislocation for a while. it can stay that way for a while. what is going to cause that gap to close? mr. ramsey: i think that gap will close by stocks coming down to meet the underperformance of junk bonds, but, you know, that is the issue. divergences,se when they look wide, they can get even wider. that is the lesson when i look back at the market history. in 1989 there were >> and seizures in the stock market and the bond market, but that did not prevent us from having this incredible ramp in the nasdaq stocks throughout 1999 into the first two and a half months of 2000. we do not have near the economic growth or productivity growth that we had during the final bubble, buthe tech the craziness can last for longer than you think.

scarlet: right. mr. ramsey: kiev had a very good move in some of the national have had a very good move in some of those speculative tech stock -- we have had a very good move in the speculative tech stocks. scarlet: talk about the themes for 2016 had the strong dollar will continue next year as a federal reserve -- 2016. the strong dollar will probably continue next week as the -- next year as federal reserve raises interest rate. everything else being equal, that is the case. small caps have under-performed for about a year and a half, coming up on two years. they still have a fairly relativent p/e premium to the big cap. premium in40% p/e march of 2014. that could compress a little more. i would agree with that if the valuations were equal, but given

that small caps are still relatively expensive, i do not think the dollar is going to be enough to negate that underperformance due to over valuations. scarlet: doug, is there anything that is flashing a buy signal to you -- any assets? mr. ramsey: not yet. we are pretty defensive across-the-board. as we see commodities sink day after day after day, they are getting a little bit more interesting. we do not really have a formal opinion on crude oil as a commodity, but we did have one longer-term model on crude trigger bullish at the end of october. we will see. scarlet: ok. mr. ramsey: i am skeptical. you might argue that the best buy signals are those when you are skeptical and it is difficult to the trigger. industry group work, i think we are likely to see some of the energy subindustries in our rankings move up into

positive territory in the next three or four months. that could be -- that is a value opportunity that could be almost fully developed now. scarlet: doug ramsey, thank you so much. chief investment officer at leuthold weeden. coming up in the next 20 minutes, controversial ceo martin kelly says the drug is affordable even after the huge price increase. we will check the math. toys "r" us is make a push online, but it could be too late. we will show you where shoppers are going to find the best toy deal. the markets in rally mode -- can we sustain it as we head into the final month of trading? what is economic data tell us? ♪

andlet: good afternoon welcome back to bloomberg markets. i am scarlet fu. time for the bloomberg business flash. california wants volkswagen to recall its three-liter vehicles. potentialis citing vehicles -- issues with the vehicles and the recall what are also applies to audi and porsche cars. withue is breaking historical practices and recruit potential pilots with no flight experience. instead, the airline will provide its own training under a proposal awaiting approval from 5 -- federal regulators. candidates will have to meet u.s. requirements, including 1500 hours of expense to be certified. you can always get more business news at bloomberg.com.

ceo martincal afteri made headlines increasing the price of a drug by 500%. ring says they will not increase. he joined us to discuss. mr. shkreli: high-volume hospitals will get the discount of up to 50% so that the burden of a high cost bottle will be less. >> what about other hospitals? mr. shkreli: it is a rare recognition, as you know. so, less pills, less price. that will be helpful. have how many hospitals you been talking to that might sign up for this? mr. shkreli: i think we are trying to focus on the top 800 hospitals in the country and the we will to the next year after

that. scarlet: you have also said no patient ever needing their prime will be denied access. how do you ensure that? mr. shkreli: the way other countries do that. for oneiven away dollar. i've said this many times in the media. >> you talked to physicians that give you guys credit or some of the things you have been doing, but it is also begging the question of will commercial payers get this -- people getting this can needing it, would have access to the discounts, or is this just so hospitals can stock more easily. mr. shkreli: i'm not sure i understand your question to the goal of the system is that no patient is left behind. 62% of our drug is given away for one dollar. anyone who cannot afford the drug is eligible for a program and safety net. this will help hospitals that have more difficulty stocking. >> it is hopeful for a patient

up, but when you're dealing with a patient paying premiums and the insurance, and he has to pay hundreds of thousands of dollars for the drug, that affects what patients will pay. daraprim you are wrong --you are wrong. daraprim is one of the smallest drugs in the system. it does not affect the system at all. >> i guess i'm trying to understand what you are saying -- because it is such a small drug you guys can do this, and who cares you are just icing -- cares, you're just icing? mr. shkreli: you have to take into perspective the reality. it is a drug that is so tiny, the changes will affect the system. >> what if everyone did what you are doing? daraprim it is not --mr. shkreli: it is not possible. scarlet: joining me is drew armstrong. he talked about how the drug is so small it will not have an impact on the system.

to unpacke is a lot here in terms of what martin said earlier, and i do want to say, they are. they do give a lot of this drug away. there are people that need it -- that care programs, -- medicare programs. patients that are too poor. they have a lot of programs. i have talked to people in the health care system that say they do a better job than some of the people that owned this drug previously. scarlet: it should be commended for that. drew: those things they should be commended for, but there are number things he said that were incorrect or disingenuous. we asked him you guys say you are a tiny piece of this massive health care system and we are just a drop in the bucket, so we can raise our prices and it does not really matter. i think we followed up and said what if everybody does this, and he said that it's irrelevant because there are safeguards in place to do that. is a brandaraprim name drug, but it should have generic equivalents. there are not any because the

drug has been incredibly cheap and not worth producing for a small patient population. if you are a big drug maker you will not make generic versions for just a few thousand patients a year. these guys came in, saw an advantage were someone else would take a while to get into the market, and they could charge whatever they wanted to in the meantime. one of the things they are being investigated for right now by the new york attorney general -- the new york attorney general sent them a letter and said it seems like you are using a closed-to-distribution system, to keep other people from getting the drugs. that is a valid way of distributing your drug, but it has a necessary fact that is not inherent on its face. if i am a generic drug taylor -- maker and i want to buy some of this medicine to manufacture my cheaper copy, it makes it difficult to do so. you have to prove to the fda you are making something that is chemically identical. you have to go out, by versions of this, buy drugs from the market. if he is a closed dissolution

system, like they appear to do, it is very difficult to do. drugsdea that generic help protect the system and keep people from paying too much -- scarlet: in theory, yes. drew: yes, in theory, but not at least according to the new york attorney general's question in terms of what martin shkreli is doing. m&a --: his approach to he talked about his approach to m&a and drug policy. drew: one of the things he said that was revealing is these could be blockbusters, a mile a lot of the pharmaceutical -- a model a lot of the from her surgical industry uses. that is something that -- a model that a lot of the pharmaceutical industry uses. that is something that is in wide practice and something bet --turing has been intending to do. you should be rewarded for your innovation is what the drug

industry has pushed. however, in turing's case, they are not being -- asking to be rewarded for innovation, but rewarded for a drug that someone invented in the neck and 50's. scarlet: july armstrong, thank you, unpacking what martin shkreli said earlier. had, the vicks -- one trader will be telling us how to prepare for that. ♪

julie: you are watching bloomberg markets. i am julie hyman. our options inside -- mark sebastian is joining me. nice to see you, joining me from the cme in chicago. it has been a little while. thank you for joining us on this day before thanksgiving. as scarlet and i have been talking about, is a relatively slow day in terms of volume. what are you watching here --

where are you seeing any action in this market? know,bastian: well, you it is a slow day, but it gives us the opportunity to position ahaed of events coming up and catch some people napping. is dying right now, and i think it will break 15. we have a lot of stuff coming up. coming nextolls friday -- it is one of the most important we have seen in the next -- last several years. it could cement or call back into question whether the fed will raise rates. the fed has done a brutal job of trying to communicate their plans are. i think the markets best guest -- guess are off of november's nonfarms, which was positive. will we have a big revision, or do we stay the course and get some certainty? what i'm really worried about is

things do get off, and things get shaken up. we see people start to question whether the fed will raise rates again. that throws the vix a lot higher. julie: you want to position yourself to hedge for that kind of uncertainty. mr. sebastian: yeah, i do not see a lot of downside. it could creep higher. in the 18-19 range. right now at about 16.80, i think it could rally to 18, 18 .5. i like by the 17.24 call spread for less than a dollar. you get huge risk reward if the vix does rally. if nothing happens, you're not putting a big outlay to hedge and/or speculate on vix going

higher. i think it will remain firm through the nonfarm number going through the fed rate decision, which is the wednesday of the vix expiration. quickly, what is your downside of the get a strong nonfarm payrolls number, a confirmation the fed will raise, stocks rally, and the vix falls? mr. sebastian: i think if we get a big confirmation vix the vix will move itself -- the vix will move itself below 15. i will flip out of the spread. the upside is two dollars or three dollars. julie: mark sebastian. thank you so much. happy thanksgiving to you. appreciate your time. we will be back here with more bloomberg markets in a moment. ♪

scarlet: live from bloomberg's world headquarters in midtown manhattan, you're watching bloomberg markets. i am scarlet fu. a check of the headlines on "with all due respect -- on

first word news, beginning with president obama, saying americans should not hesitate from going to events this thanksgiving. he said there is no specific, credible intelligence about a plot against the u.s. at this time and added his administration is taking every possible step to keep the country safe. protesters in moscow hurled eggs and threw stones through windows at the turkish embassy today. tensions increased after turkey shot down a russian warplane you're the syrian border this week. in germany -- or i should say in angela german chancellor merkel says her country will do more and the fight against islamic extremists. she is in paris where she met with president francois hollande and visited a square that is become a tribute site for the terror attack victims. get ugly on black friday for retailers in chicago.

protesters are threatening to disrupt the biggest shopping day of the year with planned demonstrations along chicago's magnificent mile, the city's biggest shopping district. activists say they will be out in full force to protest the killing of a black teenager by a white police officer. president obama has spared two turkeys named for one of the most admired presidents. the president pardoned honest and abe. they will get a reprieve and live on a nearby virginia farm. you can get more on these and other breaking news stories 24 hours a day on the new bloomberg.com website. with half an hour to go before the market closes, let's get an update from abigail doolittle at the nasdaq. abigail: stocks are modestly higher at the nasdaq, but two big winners -- one is tesla. shares are up significantly after credit suisse said an

early-january volume report should ease concerns around the fourth quarter as it relates to volume and model s production. they could be stronger than expected on a combination of expectations, thinking they could earn more than double consensus. another stock flying higher, keurig green mountain, amidst positive commentary in the wake of a much better than expected fiscal fourth-quarter reported last week. one that the stock traded more than 20% down into. the spotlight is currently on be keyrig cold, which could g cold, which could be a profit maker. peers could be attracting new money and investors. abigail doolittle, thank you. reporting from the nasdaq.

happy thanksgiving, abigail. stocking the cheapest toys -- it is not walmart or twice rest. here is guru hariharan, the ceo of the meringue commerce can't -- boomeranged commerce and his firm did some digging around. tell us about your business -- you take a broad analysis of discounting behavior in the toy category across major retailers. how do your customers use your data and findings? mr. hariharan: thank you for having me on the show. it is a pleasure to be here. ceo of is guru, the boomerang commerce. there is a massive problem in this $23 trillion industry called retail. the problem in this industry is a lot of positions in the industry are being made with got -- gut-feel and intuition. allowsomerang commerce

these companies to do is to take intuition and augment that with data and data-driven science to make real-time and smart decisions. that is what we do. we help retailers make real-time, data-driven, experienced positions. scarlet: help our viewers out. they are looking to buy toys. who is selling the cheapest toys. they would assume it is amazon over, let's say, toys arrest. mr. hariharan: -- toys "r" us. mr. hariharan: let's set some context -- we looked across six different retailers and massive analysis on top of it. here is what we found. essentially, amazon was on an average the cheapest among all of these, and had the best selection across all of these products. these products consisted of some of the hottest toys in the

industry, to some of the less popular toys in the industry. it was the full gamut. shopping waited across all of these retailers, amazon turned out to be the winner in terms of the overall basket in terms of pricing and the assortment of the selection they offered. 10% moreas about 8% to cheaper than walmart and toys "r" us. in on the hotom and more popular items in the market, amazon was about 5% cheaper than target, who in turn was about 5% cheaper than walmart. if you are a shopper, i would recommend you spend a little bit of time and plan your entire holiday purchase. if you are able to spend this time online and make your purchases, you will probably be able to save about a percent -- in total value. if you are a last-minute shopper

, you are not in a position there. target seems to be the cheapest among these retailers from a multichannel standpoint. walmart seems to have the widest selection. if you are looking for the one particular toy for your kid, you are probably going to have a better chance getting it from walmart as opposed to other retailers. scarlet: interesting findings there. if that is the case, what can a retailer like toys "r" us learn? i did not hear toys "r" us mentioned at all, and that is their specialty. if you are a: company like toys "r" us you have to focus on where you invest your energy. let's talk about how a retailer like toys "r" us or walmart can potentially think about the dynamics. if you look at the industry, it is a $23 trillion industry. it is about one fourth of the

world gdp. that is how big this is. what is happening in this industry is there is a massive really,h going on, and, a lot of companies like amazon are making massive inroads and well-funded company's are making big dents in the market. if you are toys "r" us or walmart, how do you compete? that is the big question. i would explain that by saying you need to have a clear strategy across three different dimensions that make up retailer, which -- retail, which we call at boomerang commerce, price,y trinity -- selection, and customer expense. you want to have a clear strategy on how and where you compete. what is your home field? if you are amazon, amazon has a laid out strategy, and

are executing like nobody else on the strategies they have laid out and they have created a home field advantage. amazon, for instance, says from a pricing standpoint i want to be the lowest priced leader. scarlet: is there anything amazon does not do right? is there anything they are getting wrong? if you look at the overall customer experience, they have taken the categories together and if you go to amazon.com, although they are -- they have a right customer expense, -- great customer experience, they have a unified experience. that might be something that other retailers can take advantage. for instance, if you go to home depot -- i love making my urges purchasese depot -- at home depot. there is customer engagement on the floor. i am able to ask real-time questions and get real-time

help. you need to think about what is your home field, and it does not make sense to go to amazon's home field and compete on price. scarlet: good points. guru hariharan, to i for joining us. ceo of -- thank you for turning us. ceo of boomerang commerce. janet yellen and the federal bagrve looking at a mixed of data today. ♪

scarlet: good afternoon. welcome back to bloomberg markets. i am scarlet fu. time for bloomberg business flash. brazil's corruption scandal

taking another embarrassing turn with the arrest of the ceo of btg pacutal. no word on what andre esteves has been charged with. the scandal has and sneered the biggest builders and the state-run oil company, petrobras. select group of companies are looking to capitalize on the last pages of the junk bond boom. speculative buyers raced about $26 billion of debt, double what was raising october. sales were limited to better quality buyers with credit portfolios on the rise or those willing to pay up. u.s. consumers held onto their money last month. household spending rose less than forecast in october, increasing just 1/10 of 1% for the second montero. consumers pocketed -- second month in a row. consumers pocketed most of the savings from lower gas prices and an increase in wages. get more on that story and more .n bloomberg.com

overall, mixed readings on the u.s. economy today after the release of many data points. it looks like consumers are pocketing the savings from cheaper gasoline prices. we told you about spending being less than expected in october. confidence was also not as strong as expected. joe weisenthal joins us with his take. a lot of data out there. consumers continue to confound economists. joe: it was not great consumer spending. people thought consumer spending would take off due to lower gasoline prices or because the job market is getting better, and average hourly earnings are going up, a leading -- at least according to the last report. we do not find that intense consumer spending people are looking to see. that being said, it is funny, because if you look at the gdp report, consumption is the one thing doing solidly. scarlet: didn't the fed expect that? joe: it is not that the consumer is bad, but it is not blazing. scarlet: is this a good thing --

after the financial crisis people were saying maybe the u.s. economy needs to be less relied on consumer spending, which makes up 70% of the economy? joe: it would be good if something was kicking in and economist looked at 2016 and said it does not seem the consumer will be able to carry the load, so what will kick in? housing? something industrial? that was one of the bright spots, durable goods were quite solid. some of the best numbers we have seen in a while. maybe these big-ticket industrial spendings kick in. scarlet: katie the soft match has recovered -- some -- maybe the soft patch has recovered. when it comes to the consumer, what i find interesting, we talk about what -- we are saving more. maybe saving is the new thing and we will not be spending the way we were before.

are you reading any research that points to anything like that? joe: there is a lot of interest in secular shift happening with consumption. the whole idea that people do not want to buy as much stuff, or that owning stuff is not what he used to be in terms of what people value is, i think, a really important avenue of economic research that people will be talking about for a long time. we have talked about it on this show -- this idea between this and the rise in e-commerce. there is been -- there was another data point in the university of michigan report, today, which can be broken down a number of ways. in the 50 years of the survey there has never been a month where more people said they would not buy something unless it was on discount or on sale. a fascinating data point. i think there are a lot of moving parts that seem to be confounded economists. scarlet: it is not set the tone for a good holiday season either. joe: no, it does not.

if you are a retail outside of amazon, you're hard-pressed to find a retailer excited right now. scarlet: specifically someone selling services. joe: the service number from the pmi market was good. that is another area. manufacturing is tiny. services continue to look strong. today's data bears that out. scarlet: who'd you have on the program today? joe: one of my favorite guests wrote a book, who about the decline of the west, the existential challenges facing western nations. i will have them for the first half hour. scarlet: he has had made -- he has made waves that wage gains will not be what they were in the past. joe: this speaks to the ongoing malaise that he talks about -- why are these countries struggling, and he points to the fact that inequality is widening

and there has been a long time since there has been wage gains. until you see that turned around -- not just a month of solid energy -- average earnings, but a turnaround of the labor force, it is hard to get excited. scarlet: he is of the mindset that the wage gap is a structural problem, not cyclical at all. joe: there is something they going on, not the recent downturn in the economy. something much deeper is going on that needs to be reversed and the tools we have seen from policymakers, and italy central banks, have not been up to the particularly central banks, have not been up to the task of reversing this. scarlet: minimum living wage. joe: exactly. scarlet: joe weisenthal, cohost of "what did you miss." at 5 p.m. eastern time, republican strategist karl rove will discuss the essential race. u.s. markets are closing -- presidential race.

u.s. markets are closing at the top of the hour. as we had to break, look at how the indexes are faring. that is the theme for the year. joe: just a little bit of. .- up ♪

scarlet: welcome back to bloomberg markets. i am scarlet fu. the last full u.s. trading session of the week wraps up in just under 10 minutes. julie hyman has the market check as we head into the close. no real pickup indirection. julie: definitely not. scarlet: we were not expecting it. julie: fewer people are in their offices, i am sure. little change across the board. the nasdaq remains the best of the three major averages. if you look at my bloomberg terminal, we have seen some stability in the groups doing well and poorly. health care and consumer discretionary have been leading today and energy shares have been down relatively consistently throughout the day.

on the health care front, pfizer and allergan have been bouncing back, remember, declining recently after announcing their $160 billion deal. they have been declining on concerns that would be thelatory hurdles as resistance to tax and version has been growing in washington, but both stocks have been bouncing back today. on the plus side today, consumer credit -- consumer discretionary stocks have been doing well. some of the worst performance like mattel, macy's, tiffany, which fell sharply. macy's has been battered as well, mattel is underperformed -- these are going higher into the holiday. that is working. oil is pressuring the energy prices. i went out of order here. i apologize. it is now up about .5%, even though energy stocks are still lower and oil remained lower for much of the day. get inventory, the baker hughes rig count coming out wednesday

instead of friday and showing an increase for the 12 week in 13 in the number of rigs. scarlet: julie hyman, thank you. happy thanksgiving. julie: u.s. well. scarlet: he will stick with the market -- equity market. the economic did -- data did bring out some bears. during the -- some bears. joining me now is bloomberg gadfly columnist michael regan. looking at the s&p 500, we're basically unchanged for the day. since the low in august, it has come up 12%. quite a rebound from the volatility in august, and still looking like a flat year, less than a 2% gain right now. it is any testing time of year because now is when the forecast for next year -- scarlet: brave souls with the

predictions. michael: you have to love them. it is hard enough to predict what the market will do in the next hour or the next day. i love reading the forecast. i love the mental exercise. it is also interesting what a disparity there is in forecasts. scarlet: it is wide? michael: we only have a few and. one notable one is jonathan dollop at rbc. he is looking at a 25% gain in the s&p 500. he likes health care, new tax, new consumer names -- newtech -- new tech, new consumer names. optimistic. scarlet: rising adjust rates is a good sign? michael: more or less. there are ways to play that. to contest -- contrast him,

david at goldman sachs predicting another flat year. -- a lot of the trends we have seen this year continuing next year. the strong dollar. goldman is protecting, basically, parity with the end euro by the end of the year and -- with the euro by the end of the year. industries based on strong balance sheets and i u.s. sales -- some of the names that pop up, one that pops up high and the list of both is chipotle. basically no overseas sales. all domestic. scarlet: but then you have to screen for things like e. coli. joe: that is true. that isk -- michael: true, the black swan of burritos. monster beverage is high on the balance sheet.

that shows up on the balance sheet, pretty high up there. he is looking at a bifurcated market where these exposures to u.s. sales will do well. strong balance sheets will do well. otherwise, not such a great year. scarlet: they come up with their thesis and what they think will happen. what tends to happen after stocks have a flat year? do they come back roaring back to life? i wrote a column defining flat as less than 2%. scarlet: sounds reasonable. michael: why not? if you look at years where the s&p has gained 2% or less, it is only about a half dozen times, and the average gain the next year with about 18%. if you look at david thompson's call, he is talking about two flat years in a row, and that almost never happens. the last time it happened was 1948, and, 1947 and

there was a strong year after that. after a flat year already, it would be very unusual to happen. scarlet: interesting. are there any stocks that will outperform in a raising -- rising rate environment? goldman is really looking for the balance sheet, low debt, honestly, where they cannot have a lot of exposure -- obviously, where they do not have a lot of exposure. scarlet: thank you, michael regan. he is a gadfly calmness. that does it for bloomberg markets. "wouldll due respect -- you miss" is next with alix steel and joe weisenthal. ♪

>> we are moments away from the closing bell. >> i am alix steel. >> i am joe weisenthal. ♪

alix: u.s. stocks edging higher with the dollar in light training, signs the american economy is good enough to withstand higher interest rates. >> the question is "what'd you miss?" >> the economic impact from natural gas to trade over the downing of the turkish jet. joe: is the shopping season set to fade? el niño could wreak havoc on the economy. we will discuss the effects of a warmer winter. we begin with the markets. it was a very light volume trading day. stocks ended mildly in the green. the s&p was off by 30% versus the 10 day average. has felt whole week like a classic holiday week,