from bloomberg world headquarters in new york, here is what we're watching. the slumping oil prices persist for a fifth day. howill take a look at billions of barrels of oil can also disappear in accounting smoke. twitter figures out a way to make money off of people without a twitter account. ad elizabeth holmes fighting eddie drift of controversy. can she survive the pressure? first, we want to check today's activity. it looks like an update for now. ramy: we will see if we can hold on to those gains. saw an uptick and then we ended up in the red. we are up for the force time -- for the first time in four days.

up .4%.500 is the dow is up half of a percent. we are coming off session highs. has just hit is 50-day moving average. my terminal look at right now. hold on one second. i have an employment reminder i needed to get rid of. ands look at the s&p 500 the s&p sectors. energy is up right now by 1.2%. half aials are up by percent. these are all helping today's advance. that, i want to look at airline stocks. airline stocks also trading today. a year in 3% gain

holiday travel. delta air is up by 2.75%. spirit air also getting a pop. the reason behind this is that the trade group, airlines for america, is forecasting a 3% gain in year end holiday travel. also north american airlines boosted atlantic capacity by 2.7% in october. let's take a look at the dow jones transportation index. six cents. about it is important to point out that this index is down 16% year-to-date. treasuries, the 10-year yield is unchanged. it was up by about two basis points. this is earlier where it had .een a space jump in a week

scarlet: the appointments keep popping up for you. y: exactly. scarlet: let's go to a crumpton. has signeddent obama legislation that creates seeping changes on how teachers are evaluated and how the worst schools in the nation are pushed to improve. is anent obama: this early christmas present. after more than 10 years, members of congress from both parties have come together to revise our national education law. a christmas miracle. a bipartisan bill signed right here. mark: it was a rewrite of the no child left behind law. a takes our away from the federal government and gives it back to the states to students will have do take federally required reading and math exams. in chicago, dozens of demonstrators staged a die-in. againste latest protest

the killing of a by teenager by a white officer. critics want mere rahm emanuel to resign, saying he withheld video showing the killing for months. the mayor gave an emotional speech before the city council yesterday. he called for reforms to the police department. analyst -- an illinois state lawmaker is proposing a bill that would let voters recall the mayor. that is not currently allowed under the law. guns will soon be effective life at liberty university. it will allow guns in dormitories. at the christian school in virginia asked for the rule change. boston police oppose the plan. funerals for the 14 people killed in the california shooting massacre will begin today. services are scheduled this afternoon for san bernardino county workers. friends and family members

visited the scene yesterday. sawgunman in the friend who -- and brought the assault rifle were related through marriage and may have plotted an attack together three years ago. the nominations for the 73rd golden globes are out. the golden globes will be broadcast on nbc on january 10. get more on these and other breaking stories 24 hours a day at the new bloomberg.com. crumpton, i can't believe "the americans" did not make it onto the logo -- golden globe nominations. when it comes to the markets, the bank of england decided to keep interest rates unchanged,

pointing to the recent route in oil changes -- oil prices. all eyes now turning to the federal reserve and the rate increase expected next week. tyler. us now is john what the boe did is no surprise. we pretty much have telegraphed the -- the fed has telegraphed what it is going to do next week. oil prices continue to be a surprise. point -- one were -- where you to dohen opec decided not anything, do we understand the dynamics of what is driving oil prices lower? john: i think we are talking about consumptions not matching up with supply. what technology and things going on in the world, conservation and the continuation of pumping and pumping and pumping from the u.s. to opec, you potentially now have iran coming on, and if

venezuela gets their act together, you have more supply coming on. it is kind of like "bloomberg surveillance." i think oil in the ground is more valuable than oil out of the ground. lookst: for a while, it like we had stabilized. now we are seeing another lower. does this reflect any weakness in the broader economy? john: if you take a look at the markets around the world come i think of the ocd is talking 3% toworldwide gdp around three point 5%. if there is a bump, that really throws things off. if you're looking at manufacturing centers through china and japan, a lot of them are struggling. the numbers are ok, but they are not great. it won't take much to throw it off. commodities are an example of placertion of the market draggingmarket it --

equity indexes. lester, equity indexes did ok. -- last year, equity indexes did ok. scarlet: right now, we are in a waiting mode, waiting for the federal reserve to come out with its announcement. expecting? we know we will probably get lift off on wednesday. we know the you -- the fed will reiterate fed increases. where is the surprise on it? john: i don't think there is a surprise element as opposed to finally getting it done. it may be half a percent move up on rates. scarlet: by when? over the next year, year and half. so you're looking at four phases of money five basis point increases. lot of this has already been priced into the marketplace. i still think there are good bonds out there. there are good stocks out there.

but it's tough for the overall market in general to outperform what we have seen in the last decade. scarlet: this is something that has come up quite often. it is a dislocation between credit and equity. the market manager has always been credit always leads. you can see hyg showing the yield on credit market. case, are wee waiting for u.s. stocks to plunge? john: earnings out there have been fairly strong. that is what we have been talking about. valuations are not that much higher than we were at the start of 2015. in the bond market, especially in the high-yield area, you have to know your credits. spreads are waiting so that valuebe a little bit more and the place to be. but i think you have to know your -- where you are investing, not only in bonds, but also in stocks. the overall indexes may struggle, but there has to be performers inside their bank

that will do just fine. that is the key to making some investment moves right now. scarlet: stocks like facebook, google. in the corporate space, talk about investment grade and high-yield at the stage of the cycle. john: we stole a corporate's. we -- we still really like corporate's. really like may be too strong. one of our great managers likes to say, you buy a bond, get it straight, and at the end of the day, you get your principal back. d is goinging the bon to be critical. there will be more minefields. scarlet: especially in the energy sector. john: you got it. opec had these issues in the old days, it would affect the middle east. .ow it affects oklahoma, texas

there will be some issues along the lines of the energy sector have a more strings put on itself. scarlet: what about it spilling over into other sectors of the overall economy? john: you have a fairly isolated. you look at pockets of the u.s. economy they're doing well. you have regions they're doing well. view have pockets that still have not caught up yet. when you look at other sectors, when you talk about texas, it makes up a very small percentage of their state gdp. when you look at places like alaska, it is a huge amount. how much does that affect the overall u.s. economy? probably not a lot. but it will put a strain on bonds and energy stocks and energy bonds in that area. scarlet: what level of default the ucs rising to? what level of default do you see us rising to? john: i would not even know.

seeing these type of things that are surprising the market a little bit. i think it is knowing the credit, looking at the credit, and understanding the company you are invested in right now will be marketable. scarlet: thank you. coming up in the next 20 minutes, the deepening commodities route has mining companies feeling great pain. some of them are taking matters into their own hands. its twitter is shaking up advertising strategy by targeting those without accounts. is that enough to make up for slower growth? and a hard economic reality that may get harder. ♪

scarlet: welcome back. check in on our west coast wake up to tell you a little bit about what twitter is doing. it is time for the bloomberg business flash. federal regulators have fined fiat chrysler for ct reporting lapses.

fiat chrysler says that it is revising to make sure it is in compliance. it is looking like airlines will improve their earnings record next year. carriers in north america are leading the way. they will account for more than half of total income. you can always get more on that story and other business news at bloomberg.com. we want to head back to the markets desk. there was an ipo today. : all the leaders i want to talk about are in the text fear. we get to the first one, the software provider at lassie and. atlas itsian. shares.million

right now, you can see its shares are soaring 29%. this is even higher after opening up 32% at 2767%. atlassian software powers the likes of twitter and nasa. twitter shares are surging right now, more than 6.8%. they was up earlier by 5%. this shows ads to people who do not even have a twitter account. web servers -- web surfers will now see ads. revenueway to boost ad even as membership growth slows, which has a was a concern for the company. payments will, global payments may be in talks to buy hartline payments. heartlandnding

higher. global payments is up right now by about 3.2%. about 1.6%.s up by scarlet: thank you so much. we will be speaking with the ceo of that company. aboutl be talking atlassien in the next hour. glencore announcing plans to reduce debt to as low as $18 billion by the end of 2016. it is also studying an initial public offering of its agriculture business. is the name ofon again and it plans to cut its burden from $30 billion to $18 billion by the end of 2016. they have two ways they want to do that. one is to cut capital expenditures by the end of next

year. also, they want to double their target for the amount of money they want to raise from asset sales. they said they they would a stake in their agricultural unit. it wasn't just investors in glencore that rejoiced at the news. you look at cds or credit default swaps, or the cost of insuring glencore's debt against default, the cost of that insurance fell on the back of these announcements. glencore is the industry's cinema's indebted minor. and we also heard from the ceo who said he never wants to be in this kind of debt situation again. scarlet: we should note that peter grauer, the chairman of bloomberg lp, is a senior independent nonexecutive director of glencore.

still ahead, twitter has found a way to lift its advertising audience by half a billion people. we will tell you how. ♪

scarlet: welcome back to bloomberg markets. we have some breaking news of sorts. certainly for marissa mayer and her family because she has just announced on twitter 13 minutes ago that she and her husband

gave birth -- or she gave birth -- they welcomed identical to one girls this morning. of course, mercer mayer has a lot of challenges at work at the moment with yahoo! -- marissa mayer has a lot of challenges at work at the moment with yahoo! selling off its core business. that is something we will continue to monitor as time goes on. but congratulations to marissa mayer. let's look to twitter. it is try to prove to wall street that it's business can survive even if membership stalls. the company announcing it will advertise to people who view tweets on its website without actually having an account. that increases twitter's audience pay time, to as much as

$800 million, if not more. let's check in now with sarah frier who wrote his story. sarah, tell us a little bit about what this plan is or whether it is an action already. sarah: twitter has been pummeled by wall street the last couple of years for having a slowing user base, slowing growth. 20 million users who log in and use twitter. that is 1/5 the size of facebook. so what this does is it opens up advertising to the people who click on links to tweets, whether it's through google search or an e-mail they got, and come to twitter. click, there will be an ad. this will allow twitter to make money off the people that have a full reach of twitter's platform. scarlet: is this an admission of sorts that twitters membership

growth has plateaued? this is them saying, you know, we told you that our audience is bigger than our user base. this is us proving to you we can make money off it. the last couple of years they have set our reach as much bigger than that 320 million number. don't pay much attention to that as you are. i wall street has not really taken that into account because they haven't made money off of anyone else. so here they are saying they will make money. that is why the stock is up to scarlet: jack dorsey recent -- that is why the stock is up. recentlyjack dorsey named ceo. is this is initiative? sarah: this is something the company has set for a while that they would do. adam bain is in charge of the revenue operations. he has been intending to do this for a while. it has just been a long road for twitter. they have a lot of things going on right now.

finally, they have come to the point where they can do this. scarlet: any other way that twitter is looking to expand its audience to appeal to advertisers? sarah: they are advertising to people through their mobile ad network. so various third-party apps do twitter ads as well as well as partnerships with publishers, like yahoo! japan, where they anddistribute tweets promoted tweets. scarlet: thank you. still ahead, chesapeake energy will erase one billion barrels of oil from its books.

scarlet: let's get to bloomberg markets.

mark: geneva police are actively looking for suspects tied to the terror attacks in paris. officials say police are increasing their counterterrorism vigil's level and working with international and national authorities to track down the suspects. a sydni teen had been being watch for more than a year. coded texted messages to communicate with others about becoming a martyr. officials say u.s. attack helicopters could soon be flying over ramadi to help iraqi forces in the long-running battle to retake the key city. secretary asked carter is also sending additional advisors to assist iraqi soldiers making a final push into the city center. in as argentina's

president today, he is a former mayor of when osiris and comes ormer mayor of buenos aires. they seeing is lifting the smog alert imposed two days ago. schools have reopened and roads are open to all traffic after a cold front blew away some of the worst of the pollution. meanwhile, china is getting a $300 million loan from the asian development bank to help clean up its smog-choked capital. at bloombergk news. thank you so much. if you take a look at oil prices, they are down for a fifth straight day. in 10s their it's a drop

days. it has been a steady grind lower. today, it fell to as low as 36.52 a barrel. will this cause a wave of deceleration in the u.s. economy and other markets? peter fisher appeared on bloomberg go twitter set question. he also talked about challenges facing the federal reserve. peter: they are talking about the headlands of inflation in the energy competence -- energy conference and it is a little bit of their own making. that is an example for me that the cycle is out of sync. ultimately, that is a pretty big tax cut for the american consumer if oil continues to drag lower. yes, it is hurting the energy complex, but that is not what a hold back the u.s. economy. but the inflation forces in the world are real. stephanie: couldn't one say it is because rates being so low, sabres were being punished and they could not be in government

bonds. they were pushed into the corporate bond market, into the high-end market when they shouldn't have been. we saw so much new issuance in the last years, covenant-like deals, writing like corporate bonds. up now investors are waking saying, maybe these companies aren't so great. peter: for the u.s. economy, we could see corporate margins get squeezed. we could see the credit cycle turn, but not get a recession. we could have a profits recession. we could have a credit squeeze recession in the yield markets. that is something investments -- investors have to wake up to. you have to do more than just see what janet yellen had to say. seeing it yet.e it has been there for a while. why isn't that showing up in the real economy? peter: the labor market is healing slowly. i think chairman yellen has been clear about this.

there is a lag until you see the income, the wages, eight or nine months from the strength we now see in the labor market. one of the favorite statistics i have been looking at in the last decade is, at the university of michigan household survey, expectations, what did they expect to their income to be next year versus zero.ear, just a spring back up to life. it is now up to 2%. labor markets are healing. income expectations are going to strike them. the tax-cut energy is going to come through. economythirds of our can do ok next year. but i think the credit space, corporate margins may be challenged. the recession of 2001 wasn't a real recession. we never had a negative quarter of consumption. we had one negative quarter of gdp. we had all that build up in technology and the.com boom. -- andy dot -- and the dot com

boom. i think we've got to stay tuned for that. scarlet: that was peter fisher on bloomberg go this morning. more on the consequences of lower all prices -- chesapeake energy will erase the equivalent of one billion barrels of oil from its books. it pushed the sec for an accounting change to make it easier to claim reserves that would not be drilled for years. joining us now with more is as an motor who wrote the story. ashland, but this into perspective for us. is this something that the sec decided to do on its owner was lobbied for by chesapeake? ashley: the shale reserves were so refined that they said this is much more productive ball. wells further and further away will produce the same amount of

oil that we have already drilled. so they put all of these under the prospect onto their books. you had to drill within a reasonable time. otherwise, what is the point of telling investors you have them if you're not going to drill for 30 years? the sec hasblem is a price formula. they say, the wells cap make money, you can't count them. and that rice formula last year, the arithmetic average came out tonight at five dollars last year. even though oil was $50 when they reported reserves in march. now that prices coming up to 51 and that is what is forcing chesapeake and others to wipe out as much as 50% of the reserve. now they have to mark to market. how are these companies disclosing this? they are not holding press conferences. chesapeake is one of

the companies that disclosed in their most recently orderly earnings reports. you will see revisions. there are disclosures in the 10 cues. but when it really comes out, when they have two square the numbers with the economic reality, that will we with their of the year, in march. companies usese full house accounting that writes down those numbers on a courtly basis. we have seen 140 $7 billion in write-downs so far. that punished of the fact that the reserve quantities will come down by a significant amount. is there a precedent for this question mark scarlet: -- for this? asjylyn: there really isn't.

you have a huge swath of wells that exist only on paper. if those are going to lose money, they have to be written off. scarlet: what does this mean for investors? what about the rest of the energy sector? asjylyn: if you are an investor and you were thinking you were andg to drill these wells produce this gas in a reasonable timeframe, it is not what happened. they are saying, you know what, where the market stands now, we are not getting to these anytime soon. scarlet: her story is available on bloomberg.com. much more on bloomberg markets in the next when he minutes. what did to the south african president do yesterday to incite outrage?

atlassian stand out as a winner? speak with the co-ceo on the first day of trading. ♪

scarlet: this is your global business report. those ragan may be turning the corner. we will hear from the ceo on how -- volkswagen may be turning the corner. we will hear from the ceo. first, let's start with

volkswagen in germany. change within the 12 volkswagen group brands. >> 12 quite excellent brands, should add. up the core of the volkswagen group and we are happy and glad nothing will change in the coming years. scarlet: glencore has unveiled an update to its strategy. it plans to scale back operations and sell more assets. a publicalso offering offering on its agriculture business. the chair of the snb spoke to bloomberg in switzerland explaining the decision. >> there's no sit -- no

necessity to change policy at the moment. .75 basis points negative. scarlet colored a shakeup in south africa. the president fired his finance minister. zuma will go ahead with plans to build nuclear power plants and bailout the state-owned airline. david: can a new government changes course year? maki needs to hit the ground. he needs to address the risks of

debt default and currency controls. here's the background. argentina has seen its fair share of economic backlash -- whiplash. in the 1980's and 1990's, the government was unable to rein in spending. the recession in 2001 caused argentina to declare its largest debt default in history. generous spending in the public sunday -- public spending has ground to a halt. inflation is high but no one knows how high because argentina is the first nation to have been censured by the international monetary foundation for reporting inaccurate data. so will happen to his administration? lifts promised to something controls.

investors are eyeing its share of reserves of shale oil and gas. thank you some much. this has been your global business report. let's go no to abigail doolittle where she has the latest on first solar. abigail: first solar is doing the unusual. shares are trading down by about 10% after the company raised its profit forecast for 2016. they expect to make $4.50 next the sales outlook fell short of some targets. guidance next year may prove to be conservative. when we look at a year today chart, lots of swings in there, but shares are up. will the outlook send the stock back toward this year's lows?

turning to a stock that is from a stock that is firmly higher, lending tree shares are surging after announcement from american express saying that it is joining lending tree. the recent weakness makes the stories more tractive and a near-term catalyst could come in the form of presentations from the ceo saying that this could be a buying opportunity on a stock that is on pace to finish higher for the fourth year in a row. has goney, atlassian public. it priced at $21 per share, but it is trading higher, by more than 30%. the company has raised more than $400 million, making this ipo larger than square and match. scarlet: thank you so much. as we mentioned earlier, the

swiss national bank leaving a record low unchanged, weakening the frank that has been a drag on the country's economy. >> there is no necessity to change monetary policy at the moment. we have an expansionary monetary policy with an expansion rate of .75 basis points negative. and there's also the willingness to intervene in the foreign exchange market if necessary. if you look at the inflation forecast, it is roughly unchanged. it is a little bit change because the international environment changed. this is also not as bad as that. we expect 1.5% growth for 2016. >> i couldn't help but notice in the news conference you seemed a little more upbeat than i have seen your earlier this year. you say the economy is better than the data suggests. is the economy much more resilient to the swiss franc?

the situation for large part of the economy remains very, very difficult. so those firms who export or are under pressure because of import competition, for them, the situation remains very difficult. the swiss franc remains overvalued, significant lyon overvalued. that means a difficult situation. will adjust, firms to this new environment and we are hopeful, for many sectors, it will be possible to adjust to the situation. >> would you assume the current for 2016,o achieve 2017? forecast, behind the one play 5%, there is only slight appreciation of the swiss franc.

-- 1.5%, there is only one depreciation of the swiss franc. >> you mentioned before that the currency is overvalued. it has been about 11 months since you last cut rates. is swiss national bank comfortable with where the swiss bank is right now. is that right? >> you have to consider two aspects. one is the international environment the remains very difficult. the second point, we are not inactive. we have the willingness to intervene in foreign exchange markets if necessary. and we did that in the past. scarlet: that was swiss national bank chairman tom jordan. holmesup, can elizabeth stand this is a muffin company? ♪

scarlet: six months ago, the future looked bright first cyrano's. company was viewed as a major disruptor and it had announced several major alliances. but over the last few months, the come be has sending charges that it's lab tests are not as accurate as they should be. take us back a couple of steps.

what did the company cling to do? >> elizabeth holmes invented this company to disrupt with a test industry, wagers frankly on its own not a sexy industry. but the idea was that they could , hundreds ofs tests potentially, from a tiny amount of blood you get from picking your finger. you can walk into a pharmacy and get this test done without a restriction and have access to all of your information anytime you want it. and this would be much cheaper than what the dominant lab companies charge. scarlet: to give you a sense of how much cheaper, elizabeth holmes spoke with emily chang earlier this year. was it with holmes: we have taken over more than a hundred of our tests for less than $10. it could cost hundreds in other locations. that means people, even if they have insurance, who have really

high deductibles, they can afford it. we have done the same thing with blood. scarlet: certainly an attractive proposition. what is the push back here? sheelah: to start off with, the entrenched existing lab companies, which charge higher prices and are not transparent about it, are threatened by what she is doing. elizabeth and the company have been the subject of a lot a very flattering press coverage because the whole story is amazing. about six weeks ago, a series of pretty harsh articles came out. the first one was in "the wall street journal," suggesting it is not using its own technology to conduct most of the tests it is conducting for rust -- it is running for customers. the company has denied this. however, they have not fully come forward with the data that people want to see to really be convinced that these tests work as well as the conventional tests. scarlet: you met with elizabeth holmes.

she convince you? sheelah: i spent an afternoon there with my caroline -- my collie caroline chen. she is brilliant. shears charismatic. very intense, dedicated to her cause. life.s no personal striking blacky outfit. she is a stanford dropout. sort of a prodigy. i got this sense that she is sincere and passionate about this and is definitely onto something. however, there are still some areas where they have not been willing to answer pointed questions about what exactly they are doing right now and why. i can understand that. they have been a private company for 10 years. the have been operating in secret, building their technology. they haven't wanted their competitors to come in and copy them. this is typical. when these attacks came, they were not prepared to deal with them. they did not have a pr staff or a legal advisor. so they have been taken by

surprise. scarlet: the story is a fascinating read, a fascinating look into the company and elizabeth holmes. the whole black outfit. sheelah: very striking. scarlet: thank you. coming up, bloomberg markets, jan hotchkiss will be our guest at 4:00 p.m. ♪ sure, tv has evolved over the years.

it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next?

for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. scarlet: it is 1 p.m. in new and and 6 p.m. in london midnight in hong kong.

from bloomberg world headquarters in new york, good afternoon. australian software company makes its public debut today with a valuation of more than $4 billion. is this a referendum on unicorns? bond traders are on edge because of the fed meeting next week. middle-class, americans living in middle income households are now outnumbered by the richest and poorest. desknt to go to the market to check in on things. it looks like the first gain of the week. >> yes, the first in four days and markets can't decide whether they want to be up or down today. at least for now, they are asding onto the green markets followed the losses in oil for the first three days.

energy and transport are leading those games. -- those gains. the indexes have been tracking the fall and oil but energy stocks are getting a little bit of a boost. pop andn idea of the drop, let's take a look at the dow intraday. around 1030 a.m., there was a bit of a pop but then we gave up most of that. seeing -- we we are seeing those gains reappear. let's look at the global commodity prices. this isglco. oil commodities right now are all down. 8/10 of 1% is down of natural gas stocks are up a little bit higher. let's take a look at crude oil which is trading at about 3/4 of

a percentage point down. these are lows we have not seen since february of 2009. scarlet: if you look at the stocks, they are holding up ok. console and chesapeake are all higher. 8% here. some pretty good gains for energy stocks. looking ahead, this is potentially just for now. scarlet: thank you so much. let's get to our first word news. you, congressional negotiators are moving closer to a deal that would make a series permanent.tax breaks lawmakers hope that will speed up other talks on a spending bill to keep the government in operation. >> this is something i have inherited from the last regime. i don't want to rush things through. i want to get it right.

mark: republicans want to avoid a repeat of the government shutdown in 2013. congress is likely to pass a temporary spending bill tomorrow. president obama has signed legislation that calls for a sweeping change in how teachers are evaluated and how the worst schools. are pushed to improve the legislation is a read -- a rewrite of the no child left behind that takes power away from the federal government and gives it back to the states. students will still have to take federal or required reading and math exams. hillary clinton has won the endorsement of the american federation of government employees. the union represents 670,000 workers in the u.s. government and the district of columbia. the brokeneon says neck of freddy gray have not occurred the way the maryland state autopsy concluded. at william porter's trial in baltimore.

freddy gray suffered a spinal cord injury while writing handcuffed and shackled in the back of a police van and porter faces a penalty of 25 years in prison. in westernre rain oregon but the national weather service says it was not strong enough to cause river levels to rise. cities from portland to the kos got almost half an inch of rain overnight. the series of storms this week has caused flooding and landslides and power outages. 2 people have died. more and these another breaking stories 24 hours per day at the new bloomberg.com. it has been a top year for ipos with deflated valuations and companies looking to go public. one australian company should but that trend. it is making its debut. it is growing and turning a profit. to emily chang in

san francisco who will speak with the companiesco-ceo's. emily: the company has been called the last australian hope. thank you so much for joining us. it's been a rocky year so far for tech ipos. recent ipos have been flat so what made you guys decide that now is the right time to go public? >> we have always tried to build a long-term company. we have been preparing for this for a long time, for the last four years in the making sure the company is ready to do this and we have a disruptive model in the business. we said we could go public in any market and the company is ready. some want to hold you up as an example of a unicorn and

you did it right and have been profitable are several years. have you felt additional pressure from these comparisons? >> we cannot make any comparisons. i think we build a unique company. collaborate and be more productive and that's different as well as our business model but we spend money on research and development and less on marketing. we have tenures of profitability. companyu could use our as a bellwether for other tech ipos. one analyst is remarkably impressed with their company. what advice do you have or other private technology companies out there about how to manage their cash? >> we have always been disciplined and patient and try to focus on the end customer and

balance sensible levels of growth and profitability and cash flow with the same time rather than putting all the chips in one basket. i advise other entrepreneurs to remember that you are running a marathon, not a sprint, and have balance emily: and patience and discipline. we see a lot of technology companies waiting longer and longer to go public. you guys have taken the plunge. do you think more of these companies should consider going public in 2016? should they not be afraid? >> a company should not go public unless it's ready. we have been building a long-term business and we have many diverse abide and operate in 160 county -- countries around the world. with our management team that we built, we have simple board of directors and the products we build make is ready to go public

in a company should not rush into that. proper market valuations may or may not represent what's on the public market. i guess we are excited we have taken the plunge. emily: now that you're a public company, you're competing with upstarts. how are you changing your priorities now that you have more short-term minded investors and you need to stay nimble and compete? >> the important part is we are not changing our priorities. we'll always thought long

scarlet: welcome back. it is time for the bloomberg business flash,.

for bank of america, the second time was a charm. they passed the annual stress test. regulators say they improved internal controls and revenue models. they will keep paying dividends a quarterly revenue. a management shakeup at aig which is being pressured by carl icahn to improve returns and the chief financial officer is among the top managers leaving and the ceo said last month they plan to fire about 1/4 of its 1400 managers and they posted a loss in the third quarter. show tosays it will people who don't have accounts. the ads will show up when they go through to a clear posting. investors who have brought into the company are cheering this move sending the shares up 6.5%. you can always get more on that

story at bloomberg.com. let's take a look at some company movers. ramy: these are all food related companies. and it looksotle like their shares are staging a bit of a comeback today. the shares are up 4.6% right now. they had been as high as 5% of this comes after the founder issued an apology to customers who have gotten sick from the you call eye out right -- from the e. coli outbreak. they are unchanged from all of november. whereston restaurant boston students got sick is still closed. brand is yum brands down by 1.8% but they are paring losses after they gave a less positive view on its china sales. it turns out that november

same-store sales in china fell 3% which was led by a plunge over pizza hut for same-store sales of 9%. the company plans to return 6.2 ilion dollars to shareholders. people were thinking it will be spinning off its china unit in 2016. whole foods market shares are up by a little more than 2%. investors seem to like the addition of the former head chef of morgan hotels. he will take over as chief of culinary operations. they are getting a boost from high-volume links to a possible consolidation. at how theselook stocks have been performing year to date. they are trailing the s&p 500 this year especially for whole foods. it is now down 38% year to date. chipotle's down 16% accelerating losses. yum! brands is the least of the

losers, down about half a percent. scarlet: yum! brands has its own food safety issues in china. it is a waiting game for the fed off.nally begin lift the first rate increase in 10 years has bond traders on edge and they are concerned what the fed will do with two point $5 trillion of excess cash. for some investors, the safest and most liquid security is the answer and one of them joins us from st. petersburg, florida. what do we know about how the fed plans to train their excess liquidity from the financial system? >> that's a great question. part of the experiment in december which is more likely a case of trying to manage the normalization process is going to be how they do it. we have $2.7 trillion of excess reserves. borrowinghe cost of

on a banking system that is massively over reserved will be tricky. i suspect they will use the and we will market see some unconventional type approaches. the big risk to the fed if the market does not go where they want it to be. scarlet: what is your confidence that the fed can handle this without major disruption? >> i think it's going to be difficult. areother asset classes going to have to watch very carefully the reaction function in the short end of the treasury curve and the commercial paper market's to see how they adjust to the eventual policy shift next week. scarlet: we see the two-year yields soaring to five year highs as investors pile into short-term treasuries, you among them. what is a worst-case scenario? believes if the market the fed has lost

credibility. the december move is as much about credibility given their ismsy communication as it about the economy or financial conditions which are tighter if you look at corporate bond spreads and high yield spreads. clarity and confidence is one of the second is the idea that the markets don't respond or the fed moves and short rates go up and as we predict, the long end of the curve begins to rally and the fed is not done anything to curb long-term inflation expectations. scarlet: there is no playbook for this. did not havees this amount of money sloshing around. what are you using as a precedent or your framework? there is a degree of financial levers and i look at 2001-2007 which is indicative. there have been consequences to

0% interest rates for seven years. , ahas been a real averaging lax in credit standards, and a massive rally in risk assets. even though we have not started from zero, raising the cost of our wing in a reasonably highly leveraged financial market is going to cause a repricing of risk. we have already seeing that in high yield an investment grade bonds and we think that continues. scarlet: thank you for joining us today. ahead, new york is known for its pizza and bagels but what about its vegetables? we will take a look at the growing urban agriculture business. ♪

scarlet: welcome back. need huge open spaces the middle of the country to grow crops. gotham greens became the world's

first agriculture company with facilities in new york and chicago. their growing methods yield 30 times more crop break or the traditional fields. is this disrupting big agriculture? let's check in with carol massar and cory johnson. carol: welcome to bloomberg radio. we have the chief executive officer at gotham greens. >> it's great to be here. i toured your warehouse in brooklyn so remind everyone what you are doing. you can create farms in urban areas? >> we are pioneering in the terms of urban out the culture and growing produce. we design and operate these advanced farms. cory: what are you growing

specifically in brooklyn? >> we focus on leafy greens and herbs in different letters varieties, highly perishable vegetables that have to travel great distances to reach a urban consumers in new york. cory: those things you can plant quickly. fast growing cycles so you can turn the crops quickly and get 25 harvestsc per year. ariol: you guys grow atop this >> whole foods market and it's in the scores and 24 hours? less than 24 hours. his recent bolick in terms of reducing the food miles.consumers are caring about local food and wanted grown closer to home and more sustainable and fresher and better quality. by growing it in and around the consumers are getting farm fresh produce within hours of harvest. cory: what is the technology

behind it? environment inhe the greenhouse to create the optimal growing conditions for the crops. we have sensors that monitor the climate and different technology that keeps the climate for the crops and we use hydroponic growing techniques which eliminates the need for soil which is an efficient form of farming. cory: it's grown in rocks? >> it's really grown in mineral salt and water. nutrients in the water and that provides nutrition to the crops. if it gets too hot or cold, you can control the temperature remotely. >> that's right, it's highly automated and computer-controlled and we can access the green house remotely if we need to make adjustments. carol have you been making money? :>> we have been profitable since we started and we are demonstrating that hyper local agriculture can be done profitably on a commercial scale

and have grown 400% this year. operationseenhouse totaling 170,000 square feet and have 120 employees. it is profitable and exciting. cory: how much more is this provision because of the expense and growing it? >> it's highly competitive. our products retail for around three dollars-four dollars which is competitive with the leading brands of produce. cory: how much percentage more is that? >> it is right there. it costs a little more to grow it in these high-tech facilities in urban areas, we cut out the distribution. costs and the food waste its estimated about 50% of the food in this country's thrown out. by growing in close proximity to the market, we are eliminating a lot of that food waste. saving on the disruption caused and sitting on the food waste, we can keep our margins high and remain profitable. you opened in chicago?

>> yes, it represents the largest rooftop greenhouse facility. how: >> 70 percent of the u.s. population lives in cities and we are facing extreme drought in california which is the prime agricultural base. cory: which sounds ridiculous. as san francisco's being pelted with storms. of this technology comes from the illegal growth of plot over last >> few years in urban areas? >>a lot of it has been underground. the technology is sophisticated. it's practiced in many parts of the world. now that cannabis is increasingly becoming legal, a lot of the underground growers are able to come above ground and employee a lot of these sophisticated greenhouses. cory: people are rushing to

whole foods as i said that. carol: will you expand overseas? >> there is interest but we are focused on the u.s. market. carol: thank you so much. scarlet: thank you so much. ahead, we will speak with the ducati north american ceo and preview their latest cruiser. matt miller loves it. ♪

sure, tv has evolved over the years. it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next?

for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. scarlet: from bloomberg world headquarters in new york, good afternoon. let's get to the headlines. -- in chicago,ld

dozens of demonstrators staged eight.in, the latest protest of the killing of a black teenager i await police officer and the city's handling of the investigation. the officers charged with murder. critics want mayor rahm emanuel to resign saying he withheld video showing the killing for months. the mayor gave an emotional for the city council yesterday and called for reforms to the police department. and illinois state lawmakers proposing a bill that would let them recall the mayor which is not allowed under current law. guns also be a fact of life it to american campuses. . liberty university will allow guns in dorms students of the christian school in virginia. asked for the rule change northeastern university will give cap as officers access to semiautomatic rifles. for the 14 people killed in the california mass shooting will begin today. services are scheduled this

afternoon for the san bernardino workers and friends and family members visited the shooting scene yesterday. investigators say the gun man and a friend who bought the assault rifles used in the rampage were related from marriage and may have plotted an attack together three years ago. the nominations for the 73rd annual golden globes have been announced. nominees for best motion picture max andclude carol, mad spotlight and for best television drama -- the golden globes will air on nbc on january 10. you can get more on these another breaking stories at the new bloomberg.com. scarlet: thank you. volkswagen admitted to rigging

of 11 million diesel vehicles to pass emissions tests and september and billions of dollars were erased from its market value. ins nichols spoke to the ceo his first interview since taking the position. hans: the ceo of volkswagen is updating investors and the public on what the volkswagen strategy is going forward. one thing that is clear is that the company in the future will look like the company in the past and that includes 12 brands audiducati from russia to --orsche to audi. >> they make up what we call of the dragon group and we are happy and glad that nothing will change in the coming years. he also talked about a potential trip to the united states. that could be in early 2016. he also ruled out job losses

saying they can make these measures without cutting jobs. in the meantime, the chairman of the volt wagon group talked about the importance of fighting for market share but he indicated that would be a difficult challenge. staying with automotive sector, audi bought ducati for one billion euros in 2012. ducati north america ceo spoke to betty liu and matt miller, of course. are you feeling any blowback from the vw scandal? >> not for us. these in the group and will be a record year for ducati. scarlet: you brought that company's real cruiser into the studio.

hit: you are continuing to a higher number of motorcycles in the u.s. and you brought in o.e newx diabl this will be a huge growth strategy because you are breaking into the cruiser market. >> absolutely, the idea that two , it was our first tap into the market. the cruiser was the question. with this one, there is no question. the feet are forward and the rider position. matt: do you think americans who are used to the air cooled heavy harley davidson's will get into the liquid cool like your bike? >> i don't see if that will make a difference. the important point is the excitement and the riding position. we are going even further with belt transmission.

where entering into the cruiser market but with our own brand. scarlet: let's bring in matt miller. let me ask a dumb question. what is a cruiser and what's the difference between a scooter and a chopper? matt: a scooter is very small. it's not really a motorcycle. it's a smaller displacement bike. a cruiser is an american bike. your feet go in front of you. it's typically a big air cooledv-twin like a harley and it's not incredibly sporty. you're not taking it through tight turns. that's what most americans by our cruisers. more than half of the entire u.s. market our code -- are cruisers. ducati is doing incredibly well in the u.s. it can hit new record highs as far as the bike itself. ducati sells mostly bikes for the track or bikes for adventure

touring bikes that go very fast. this is his first foray into the cruiser market. that's the ducati monster which made the brand famous in the 1990's. the first foray into real harley had to head competition. harley davidson still reigns supreme as the motorcycle maker and seller in the united states. if you don't count scooters which would be fair, harley davidson sells more motorcycles and each one of its competitors combined in the u.s. they have the lion's share of the market but they are big, heavy, unwieldy motorcycles. i love them and i own one. ducati is another level of quality as far as the compartments included and the performance of the bike. does not have the air cooled american feel to it. scarlet: when we talk about car sales, we know they have been rising.

matt: they are heading for 18 million this year. scarlet: what is the market for motorcycles? matt: the motorcycle industry has not come close to what the peak was precrisis. in the u.s., we sold a total of 1.1 million bikes in 2004. now we are still under about 500,000 for the entire country. we are going up but the entire industry has a long way to go before we get back to its people. scarlet: what accounts for that? why is there not as much a doozy as him? a motorcycle is something you buy after you take care of your necessities. after you have the house and the car and have locked in the college fund. is a totally discretionary item. it's almost a luxury item. people have started going back in.

it steps up each year but it has not gotten to the same level as it was when we were in the super bubble heyday of 2004. we need a couple of silicon valley entrepreneurs to get big on this stuff. matt: they are not really motorcycle people. it's more of a wall street thing that it is cynical -- silicon valley. scarlet: how many bikes you own? matt: i have too many. i always want one more. scarlet: we need a number. matt: i have seven right now but there are a few for sale. i can hook you up. @matt miller 1973. coming up in the next 20 minutes, what's happening to the middle class in america. it's turned into a minority will tell you about new research

that's causing handwringing in washington. that you partly ceo is eating crow -- that you partly ceo is eating crow. are we headed for another government shutdown? that question is ahead. ♪

scarlet: welcome back. it is time for the bloomberg business flash. wearhouse has stopped plunging into the company warned its joseph a bank unit could help it miss forecasts. this is a sign after the merger. it has declined 35% this quarter. there may be more consolidation in the card processing business. lowell commence is in talks to buy heartland payment. there has been no comment from either company and they are trying to tap into the number of retailers. hoverboards are reportedly being banned by airlines as a fire hazard. british airways is the latest

carrier to ban the holiday gift item. they are powered by lithium batteries. you can get more on other business news at bloomberg.com. over to the markets and take a look at the dow jones industrial average. we are near the highs of the day. the dow is moving with oil that has turned private -- positive briefly. decline, ito this could mark the fourth straight decline for oil. it has been down eight days in the last 10 bringing its second have declined to about 48%. the issue is the oversupply of oil in global markets and the lack of demand. some people say demand is been recovering especially in asia, we see way too much supply which

is dragging down prices and opec is not helping by declining to do anything with its target. let's go to the markets desk. i know you will start with a retailer. why aren't people using their savings from lower gas prices to spend more at the mall?ramy: some experts i spoke with said we may see that happened this year. the national retail federation said holiday sales might hit a record. we will have to wait on the next few weeks for that. to get to the analyst calls, let's talk about jcpenney. this has been a beleaguered retailer and they are catching a bit of a break with nomura. they are boosting their price target by 12%. you can see a little bit of a leg up. it popped earlier in the day.

they say the chain is taking steps to improve sales and profit margins while cutting its high debt load under the new ceo. in the travel world, trip advisor is flying higher, 1.7%. this is after kind words from piper jaffray raising it price target by 33%. it is at $84 or so. $120 perraising it to share which is a 42% rise above its current price. way is navistar which makes commercial trucks and it has plunged by nearly 14%. this is after morgan stanley cut its price target by 1/3. concern is over more deterioration in the fundamentals for the trucking industry. navistar is now at its lowest at $9.94 in 18 years.

scarlet: incredible. thank you so much. turning to broader economic concerns, the middle class is long been lauded as the heart and soul of america. >> we got to get back to putting the middle class at the center of our politics. >> the middle class in this country is disappearing. >> the middle class is getting clobbered. scarlet: tons of rhetoric but beneath that lies the stark reality. the middle class is disappearing any new study out shows the group is lost its majority status in the u.s. and is now crowded out by the upper and lower income households. care to explain what this means is our senior economic correspondent brendan greeley. as a fellow member of it feels like that. you see a new statistic.

the middle class is being hollowed out and there is data to support that this is a new way to say the middle class is in a minority. americans understand as language in there is value in just running the numbers. all techniques and ran them on new data. understanding what the world looks like is valuable. the middle classes in the minority, below 50% and it used to be 61%. when you dig into the numbers, it makes things in politics make more sense. we find that people who are married, where both spouses are working, they are doing much better. single parents, single mothers, single men are doing really. -- are doing really. poorly.

black families have done better in terms of moving into the middle class. scarlet: you find a lot of interesting nuances you would not have known. i feel the middle class is more of a mindset. if you ask people if they are in the middle class, many of them will say they are middle class even if the numbers indicate they are above or below. >> pew addresses this. we are really talking about middle income. the median income in america is $53,000 per year. income, the way it is 2of that orither twice that. /3. class is a different thing that we layer over top of income. you can be not middle income because you're out of college

and you don't learn a lot but you have parents who will take care of you who have wealth. you have a college degree that will help you out. you are right, this is a distinction but most people think of themselves as middle-class and has more political resonance than middle income. politicianst's why latch onto this and speak to this constantly. the other thing that came out of this is that people with a college degree versus people without a college degree have suffered the most. a college degree the definition of class but people have failed to achieve the class and are being pushed out of the middle income. the politics of that make complete sense. scarlet: then there is both. brendan greeley, thank you so much. up, chipotle apologizes to customers who got sick and vowed to be the safest place to eat. we will discuss that next. ♪

scarlet: welcome back. the -- atat a chip chipotle in boston is getting worse. the number of people getting sick there has climbed to 141. the shares are up in the ceo issued a public apology and said in an interview that strict new safety practices will prevent teacher outbreaks. is that enough to justify what has happened? l joining us from washington is specializes in brand protection. in a column today that you wrote, you said the situation is worse than that you this and the equally problem. of dayste that a couple

ago because he had not apologized. today was a big deal for him to apologize. he said before i answer anything, let me apologize which is a big move for them. scarlet: richard, was that enough? it seems the company was blaming about theger, talking ways the cdc was tabulating the numbers and taking issue with that. for think shelley is right the apology was fairly well done and it was important. it's a little late but the challenge is you have him making the apology a month ago and now having to make it again. asre is an integrity issue far as the impression of the marketplace and customers but the market is responding well because the message today was we see this as a problem and we are going to address it.the challenges that

-- is that this is going from a regional problem to a national one. >> what do you think they have to do next? how many times can they apologize? >> i don't think it's about how many times you apologize, it's what you do. while they have done so my things right, we think it's a great company. they have helped define casual dining and have done so many things right taking a playbook out of the johnson & johnson tylenol crisis in closing stores i i had of federal regulators. they have not been on twitter for seven days. they are not showing video of the changes they are trying to make. they really haven't led. i think that they will. the changes they've made on the website to show the apology, we were waiting for that. you had to anticipate there were scarlet: be more issues after the west coast. they are not necessarily going above and beyond.

you say they need to do more focusing on the supply chain. what should they do? >> i think they are. from what they are doing, they are going beyond compliance. they have positioned themselves to not just be a safe restaurant but the safest restaurant. the challenge for the supply change is what all companies face. as we have more and more companies supporting the restaurants in supporting the storefronts, we have to look at liability and exposure all the way through. chip plate has 64,000 companies providing them with food. with the nouriel virus, it's not just the supply. it can be anyone who walks into your restaurant and touches something. and they have a product that people eat with her hands. this is a chain that sells a lot of uncooked foods of this will be a problem they will have to confront that other chains don't have to. >> that's right.

one thing they brought the other day is the ceo said we would have our workers cut up the tomatoes and they will do it in a centralized facility and bring them already to the store so it will change the way they do business. scarlet: thank you so much. thank you both for giving us advice and what they should do next. we've gotten much more on bloomberg markets coming up. the goldman sachs chief will be joining joe weisenthal at 4:00 p.m. and we will talk about the labor market and the challenges to the federal reserve. ♪

sure, tv has evolved over the years. it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next?

for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. tand that's what we're doings to chat xfinity.rself, we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. >> it is 2:00 p.m. in new york. welcome to "bloomberg markets." ♪

david: from bloomberg headquarters in new york, good afternoon. oil is falling for the fifth straight day as investors prepare for the fed's's highly anticipated rate decision next week. a look at what we can expect for the rest of the year and beyond. the volkswagen ceo says he is committed to keeping all 12 of the company's brands in the wake of the cheating scandal. a look at the exclusive interview. the collaborative technology company which works with both twitter and nasa is bucking the trend and setting a high bar for other ipx -- first, let's head to the market desk where remy has the latest. the big news is markets are at session highs. a lot of choppiness today.