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. we are maintaining in the green

right now. after the past three days, this is welcome for a lot of people long in the markets. the markets tracking the fall of the price of oil. let's take a look at the board. the s&p 500 is up .5%. the nasdaq up .6% here. this iske a look at how performed over the course of a day. you can see it is not working right now. i will tell you about how the first rises at 10:00 a.m. we not seeing it back up to where we are. to get an idea of taking us up or down, dive in and let us take a look at global commodity prices. oil commodities right now, they are down. they are down today as well as year to date. wti crude, down 1%.

interestingly, natural gas is rising higher. we have seen volatility in the market. remy: with natural gas stockpiles, those are actually falling according to the energy information organization today. they fell last week and we can see the spike, the reaction to that news, happen around 10:30. price us fall into session lows. they are at the lowest since april 2012. the company that deals in natural gas, they are still higher despite natural gas falling. the biggest gainer up by more than 8%. biggest gainer. another sector, airline stocks gaining.

a 3% gain in year-end holiday travel. look at that. united airlines up 3%. delta air almost up or percent. -- 4%. david: mark has more from our news desk. negotiators are moving closer to a deal that would make a series of expired tax breaks permanent hair and lawmakers hope that will speed up other talks on a spending bill that will keep the government in operation. >> we are negotiating an enormous, year-long, omnibus negotiation. those are ongoing right now as we speak. the last thing i want to do is negotiate through the media. mark: republicans want to avoid a repeat of the shutdown of 2013. a temper a spending bill tomorrow. donald trump has a planned trip to israel. he said i decided to postpone my

trip to israel and to schedule my meeting with prime minister netanyahu at a later date after i become president of the u.s. lawmakersn israeli urged netanyahu not to meet with the republican presidential candidate because of his proposal to bar muslims from entering the u.s. has won theton endorsement of the american federation of government employees. six hundredpresents 70,000 workers in the u.s. government and the district of columbia. quartetof the national collected their nobel peace prize today during ceremonies in norway. the group appealed for interact -- international -- to make the fight against terrorism and absolute priority. one of the quartet's members said the quartet's feeling of euphoria and pride does not skewer the grief, sorrow, and

anger they feel about recent acts of terror in beirut, paris, and trammell. slumpird quarter summer took a chunk out of household wealth according to the federal reserve. net worth for households and nonprofits calculated by subtracting mortgages, debts, and other liabilities, dropped more than one trillion dollars from july through september. theehold debt rose 1.5% in third quarter, the slowest pace in almost two years. can get more on these and other breaking stories 24 hours bloomberg.com. imr crumpton. david, back to you. -- i am mark crumpton. david, back to you. david: the economy is ready for hire firing costs. earlier this week, a big red flag, saying this is disconcerted we talking about raising interest rates with corporate credit tanking, they are falling apart. i am joined by the chief

international economy said deutsche bank. let me ask you about what we are seeing in the credit markets and why there is fear about what could be happening there. >> basically 18 months ago when energy prices started falling, you saw credit markets start to pay attention and in particular, high energy names started to deteriorate. we have gotten to the point where they look relatively distressed and this is the thing not many people are talking about but i am talking to many customers about the distressing credit markets are is this enough? can it spread outside of energy and become a problem for the real economy? >> what are you saying? are you able to allay their feels -- or their fears at all? >> he us, the challenge for us is it is difficult to quantify these risks. we see clearly credits are widening. we also see default rates in

havey and manufacturing been deteriorating and we are also seeing corporate america having leverage increasing. the fear is are we missing ?omething in the picture the answer is the payroll numbers, the job growth we saw and friday was still 211000 october, 298,000. we are certainly watching credit markets very carefully and what this might mean for everything else. david: the fear you might be missing something and the greater fear is we could be heading to a recession. >> esp are traditionally, many of the indicators flashing red are always something that is a precursor for the recession come in. -- coming. at this point, it looks unlikely we will have a recession because this has persisted now and energy prices

have gone down for 16 to 18 months. we are still watching carefully because we have a lot of humility for things happening in credit markets because of what we went through and 2006, 2007, and 2008. david: a lot of people think the rate rise is priced in and that the effect would be pretty neutral. you are maybe not pessimistic but there could be a negative effect. >> yes. if you try, the likelihood of a rate hike is 80%. the questions then become, if people have moved out and bought more and more risk, if people went away from rates, investment grade, the nearest neighbor is high-yield, emerging markets, a lot of risk taking in the last seven years that went on and what with the reversal look like? would it be possible to have a

smooth transition to high interest rates now that janet yellen is about to raise the risk free rate? issuance andf the credit markets basically go to buybacks, magnifying risks in the process, therefore normalizing rates, is involved more -- with more risks in your traditional cycle. david: the word i kept encountering over and over is moderately, a moderate raise and growth, a moderate raisin interest rates here and you agree that is what you're looking for? >> they say everything is gradual, do not expect any disruption. that is also our baseline. but it is clear a -- significant risks go to the upside. we could see labor market and more signs of inflation next year. these issues in credit markets are probably a number one risk that there is something missing

in terms of debt levels, in terms of default rates that we are watching carefully. david: during this week when we are focused so much on commodities, i would be remiss not to ask you about that. when you look at the slowdown in chinese demand, do you see that continuing a 2016? >> the problem is there is an enormous amount of exit supply and the demand is only very moderate and only coming very slowly. it takes time to construct that capacity so that means it takes time to adjust production in many emerging markets. commodity prices have been under some pressure. will create problems for a number of emerging markets. the most important thing is we do not expect a hard landing for china. even if it is on a path to slower growth, we see a modest slowdown, still 6.7, that should

still be good enough to keep the chinese economy afloat and therefore not the nightmare scenario of a hard landing in china. we do not think that is likely. david: thank you for that. coming up in the next 20 minutes, volkswagen talks to bloomberg as the company tries to cut -- to turn a corner and put the cheating scandal behind it. in washington, the battle over the budget rages on. dozens who could derail compromise on the tax and spending bills. oil trading since its lowest level since 2009. production rose to a three-year high last month, contribute to the global's wife. how low could it go? ♪

david: welcome back.

a time for a look at the biggest business stories in the news. there may be more consolidation in the card processing business. global payments in talks to buy hard planned payment systems. no comment from either company. processing companies are trying to tap into the number of retailers with online and global shopping. investor carl icahn to improve its returns. one of the top managers leaving. announced -- american international also reported a loss in the third quarter. apartment vacancies are at the highest they have been in nine years. on what they're willing to pay after four years of continuous rent growth. the average manhattan apartment rents for $3400 a month. up roughly 4% from year earlier. landlords are scrambling with the most concessions since 2011.

you can only get more business news at bloomberg.com. let's head back to the market desk where remy has a look at company movers this afternoon. ramy: i am looking at some of the laggards this afternoon. plunging right now, down by nearly 17%. look at this graph, crawling along the bottom for the entire day area this after issuing weak sales guidance for the next quarter, revenue of 590 million versus and it bested $635 million or it sales and profit for the just finished quarter were above analyst estimates. shares right now as i can see on the bloomberg terminal are trading below, 50, 100, as well as 200 day moving averages. two energy, solar is a victim of weak guidance. shares are off by about 10% right now. this is after the 2016 profit will likely beat estimates.

sales might fall short. it's margin trends will probably disappoint investors. heading to retail, men's wearhouse is plunging, down 20%. its shares have come up a little bit. 25%as down by as much as caret it may be regretting his 2013 purchase of joseph a bank today because of weak sales of that subsidiary. the company's ceo is now pointing to tougher competition from jcpenney, basically blaming others as opposed to itself. at the year today, look graph here year today. the share price has lost nearly two thirds of its value this year alone. now, this is its lowest since march of 2009, as low as hitting february of 2009, two thirds of its price. thank you.

the next chapter of the volkswagen scandal. earlier today, he sat down with my colleague hans nichols for an exclusive interview. quite excellent friends, i should add. in their entirety, they make up what we call a volkswagen group. glad andppy and nothing will change in the coming years for sure. when you talk about the variety of different models or the complexity within the volkswagen group, it is true to say we will see some adjustments. we just have to see we have many that makecombinations our lives a bit harder when we work through the crisis now. we will be sure we have to look at a number of questions related

to the region of the world, how they are positioned, whether that makes sense or if that possibly needs to change. skills comes to specific , better coordinated. do think in just a few years, we will see a more successful volkswagen company then we see right now. asbrands including assets well, including assets like to cut he and your stake, those will stay in the volkswagen family? >> these are very successful. there is no reason whatsoever to consider to get rid of those asked its. >> that includes the truck accident? you see no interest or way to hide those? >> of course not. for some good reason. we have incorporated those

companies a couple years ago and we are confident both commercial vehicles have a lot to gain from that collaboration and creating a number of synergies. this is true not only for technologies, it is true for human resource rotation. in terms of the future, they are up to thoseto come challenges. trucks and commercial vehicles, it is a very important part of that group. >> you are going to stay with luxury on ducati? >> again, no reason whatsoever to question the commitments. bugatti has been successful for volkswagen so far. the limited editions we have offered has been selling like hotcakes.

as you know in geneva in 2016, we will present the successor to the world public. without everyone having seen -- inthere is in norman norman's demand for the vehicle. in the luxury segment, there will always be a continued need to have vehicles, to bind vehicles by a number of customers. one of the very few carmakers in the world to put such a car on the road. we take great ride in that. ahead inill washington, the battle over the budget wages on. who can derails a compromise on huge tax and spending bills coming up next. ♪

david: welcome back. let's turn to the budget battle

in washington. democratic republic and negotiators are still working out a compromise. the white house press secretary criticized some of the riders that republicans want to attach to the bill. piece ofst pass a legislation to pass a controversial, ideological policy proposal that would not otherwise passed through congress, it is not responsible. we object to. frankly, that is what republicans are risking when they continue to insist on the inclusion of those kinds of measures. stan is joining me now. great talk to you. it seems like we are back to where you have been once before. give us a sense of the state of play here. josh earnest mentioning the riders folks are trying to attack to these the bills. will we make this deadline? >> the deadline we thought would be tomorrow the night when the government would turn into a pumpkin has been pushed back to

the 16th. congress asking the president agreed to another cointreau or five days. little more got a time. the answer to your question is probably, probably congress will make that. what i have been telling clients is given how angry everyone up on the hill seems to be and how hyper partisan they are and how emotional some of these issues are, like planned parenthood and syrian refugees, anything could happen and it is entirely possible they will not make it or not i give it a 25% chance of a shutdown, a $.75 chance of no shutdown next week. let's talk about some of the riders to they are right -- wide range here. talking about planned parenthood and guns, and the visa waiver program, give us the lay of the land when it comes to that? >> you missed a couple of big ones like dodd-frank changes in

campaign finance reform changes. understand the overall environment. be they not -- this may last christmas tree bill that makes it before the election this year. that is what is going on. the lay of the land is the good news, that they are negotiating. years when there was a breakdown in negotiations and the two sides could not or would not talk to each other, they are getting together on some of his things. of these are highly emotional issues. very difficult. it is hard to see what the trade-off would be. at the end, i'd that there would only be one or two and i am not sure which ones make it through. david: we applaud representatives coming together to talk about this stuff. to what extent do we attribute that to paul ryan's leadership as speaker?

who is running things up on the hill? ande is not running things that is good news. he is allowing his members to negotiate on their own. that is what they wanted. less direct control from the speaker's office. somewhere around tuesday of next week, the speaker will have to step in and try to negotiate a deal directly with nancy pelosi or the white house or else it does not get done. david: great to talk to you. ahead, the sharp decline in oil prices over the last year and a half has some wondering whether information is a likely scenario. we will talk about that coming up next. ♪

david: this is bloomberg markets. let's get to some bloomberg first word news. mark crumpton has more from the news desk.

mark: president obama has signed a new education bill which he says will prepare every student to succeed in a 21st-century pair the legislation was a rewrite of the no child left behind law, now widely viewed as overreaching. obama: the goals of no child left behind, the predecessor of this law, were the right ones. accountability, closing the achievement gap, making sure every child was learning and not just some. but in practice, it often fell short. mark: the legislation creates sweeping changes of how teachers are evaluated and how worst schools are pushed to improve and it takes power away from the federal government and gives it back to the states. students will still have to take federal reap quired -- federally required reading and math exams. covetedhe highest endorsements of one of iowa's

prominent evangelical leaders. bob is a three-time failed candidate for governor and now leads and i'll-based conservative advocacy group called the family leader which opposes abortion rights and same-sex marriage. he says the endorsement is personal and not on behalf of the organization. dozens of, demonstrators staged a dying in this morning, the killing of a black teenager by white police officer and the city's handling of the investigation. officer is charged with murder. critics want emmanuel to resign, saying he withheld video showing the killing from us. he gave an emotional speech before the city council yesterday and called for reforms throughout the police department. illinois state lawmaker is proposing a bill that would let voters recall, not allowed under current law. people killed14 in the california mass shooting will begin today.

services are scheduled this afternoon for san bernardino county worker. friends and family members of the victims visited the shootings in yesterday and investigators say the gunman and the friend who bought the assault rifle used in the rampage were related through marriage and may have plotted an attack together three years ago. the governor of massachusetts says a passenger plane that left a suburban boston station without a driver was tempered with. who knew whate they were doing tampered with the train. a six car train with 60 people aboard left this morning and stationsto four without stopping before power was cut off to stop it. no passengers were hurt. these andt more on other breaking stories 24 hours a day at the new bloomberg.com. i am mark crumpton. david, back to you. david: stocks are on their session highs right now. closing in new york, let's take a look at some of the biggest

daily movers. cattle. on bets the beef demand will rebound or 1.6% on the cme after touching the lowest since july 2. u.s. natural gas down the second year. oil trading at the lowest level since february of 2009 on regulation opec will keep markets oversupplied, and below $37 perces barrel. if crude supply and demand continues to play out, will wti spread wide over the next couple of months? credit suisse says yes and wti could even in verse for a short time. how real is this, when you look at the spread? forecasting for next summer. what we see by next summer is lower production.

a production is evidently already falling. companies that used to have growth to choose from now has to go eat look for those. growing.ontinue on where are they if not in back? if that were to disappear, what is the significance? ther: that is one of reasons they're pushing for an export. they want to see the spread between wti and brent collapse. when he is suggesting is something anti-consensus and most people are not expecting or anticipating, which is all the more interesting. >> let me ask you about the importance of maintenance season. to aow winter often leads slowdown.

is this year any different? talking us now, we're -- it is really winter. we think the maintenance season coming early this year, we are seeing trading, low demand. it is one of the many reasons wti is doing what it is doing, tracking lower. demand in america begins to pick up. a contract late left -- late next week. we probably have more weakness going into the end of the year. by the end of january and maybe before the super bowl, we could see a little less than the latest now. budget forecast investing less and projects going forward. to what extent is that a trend? >> it is actually going to be a trend in 2016. what is the name of the game? cash flow neutrality.

is.of them they could reduce operational expenses. achieve -- close the funding gap by asset sales. choosing to reduce, going down 55% from 2014 levels. ist we're seeing them do shift where they spend the money. on a more macro level, the decision we saw last week in , what that means for the shape of the organization going forward? you have an organization here taking a marquee role, calling the shots. what is the influence of the organization going forward? >> the whole meeting was fascinating. the minutes summed it up at the end. we are not the cartel, we will not go against cartel -- against consumers. regulating, somehow supply,

gone. what the saudi's have been saying for a year and a half is effectively where now price takers, which is fundamentally important. how long can they persist doing it, the war they're waging with yemen, they could do it for some time? >> saudi still has massive reserves, a sovereign nation with a printing press. it could borrow and undertake. there are number of things they they say uncle, i now need to raise the price. it mean fordoes emerging markets, i think of venezuela and ecuador, who expressed displeasure with what is going on. what is their next move? >> it is very interesting. elections were a move. the next move should be to invest to capacity. been -- they have been constitutionally unable to do

that. thank you very much. let's turn from oil to metals. glencore announcing plans to reduce its debt considering the ipo for its agriculture business. ryan has more. ryan: debt reduction is the name of the game. they plan to cut the net debt fromn to $30 billion -- $30 billion to $18 billion by the end of 2016. they have got two ways they want to do that. one is to cut capital, $1.5 billion by the end of next year and they also want to double their amount target to asset sales. there are now looking to generate $4 billion by selling off assets are they said they would consider ipo in a stake in their agricultural unit. they already talked about selling to private entities. they are the news. it was not just investors. you look at credit default swaps

or in other words, the cost of insuring glencore's debt, the cost of the insurance also fell on the back of these announcements. glencore is the industries single most indebted minor. we heard from the ceo saying he never wants to be in this debt situation again. bloomberg news, london. peter we should disclose, is a senior independent nonexecutive director at glencore. coming up, bank of america passes its stretch -- stress test. we will look at what else the bank needs to worry about. a software company goes public. how is it measuring up in week ipo's? and we get the latest will look at investment alternatives. those stories are coming up on bloomberg market. ♪

david: welcome back. stocks are hovering hive of the session. equities are doing what? let me turn it to you. ramy: they're not just near at -- session highs. they are at session highs. earlier, i was told that was the case and it is now pushing even higher. the s&p 500 up by nearly 1%. the dow was up the most by 1.1% and the nasdaq is up by nearly 1% there. the s&p 500, with this move, is now positive. we will see if we can continue on with these games -- these gains. wednesday, on the slide based on falling crude oil prices. the price has been struggling to get back in the game today.

down by 1.1%. it had fallen nearly 2% here around the 945 marker. that was the new six-year low after iraq released its production data. this will be oil's fifth loss in the past six weeks. looking to natural gas, unusually warm weather is definitely taking its toll. .own more than 2% this is showing a steeper than expected drawdown and gas is now at its lowest start winter level in the past three years. the etf is ahead right now, accelerating gains. it is now up i 1.7% because the two biggest oil companies, namely exxon mobil and chevron, are higher today.

the sector etf is now down nearly 19% year on year despite back-to-back 1.3% gains. some of the secondary energy producers rallying to take a look quickly. this is the biggest gainer on the smtp or i will send it back over to you. time now for the biggest business stories in the news right now. more signs today that the unions atween joseph a bank is struggling one. they reported a 35% drop in same-store sales at just of a bank. that is compared with 5.5% gain at its other brands. twitter says it will show ads and look for tweets even if it doesn't have -- the as will show up at web via google or search engines. investors are cheering the move

and sending shares higher. space is says is close to -- spacex says it is close to firing a rocket again. the satellite launch could come three days later on the 19th. spacex has been stuck on earth since june. it can always get more business news at bloomberg.com. brian moynihan's job on the line, today he got some much-needed news. they passed the annual stress tests after recent meeting the capital plan. it also submit regulars to .mprove internal controls stock owners are also happy to hear the news. it passed, but not exactly with flying colors. >> think of this as a remedial exam. all the rest of the competitors, jp morgan, wells fargo, passed back in march. ,t is risk modeling its data

correct for the federal reserve. the federal reserve today said, will you give them a thumbs up? however, the company still has to improve on its risk next.ment up to the i have not yet seen that. that is the next round and i have not seen that kind of measuring. so you pass but you still have to study hard. a penalty haveh been for bank of america if they had not passed this test? >> it would have been a disaster. they would not have been able to increase dividends. a nickel.dend is only people are suffering. people own this stock. it used to be a high dividend paying stock. ishares back in the day. brian moynihan, the ceo, cannot do that. david: i am struck by how big a part of the bank business this

has become. the bank of america saying it but potentially tens of millions of dollars. what goes into it? people now are in the bank charged. probably hundreds of people, probably hundreds of outside contractors. they spent more than 100 million on this. they are overhauling their capabilities. banks these days are malcolm's of tons of other banks bought these years. they have different data standards and it is difficult to track data over the years. that is really important of this job that they have tried to do. david: you have banks getting up to speed and becoming familiar doing it year in and year round. inspector general saying it was not doing its duty, looking at a lot of these stress tests. from thessaging federal reserve is, do not take it easy.

even the banks that passed, jp morgan in the last few rounds, do not take it easy. every year, we will take it easy and how good are they at managing risk? david: the federal reserve, you mentioned how many hundreds of people involved, does federal reserve have the manpower it needs? think they do not have the staffing. for a lot of this, they depend on -- depend upon the banks and the shadow banking. thank you so much as always. coming up, a software company makes its wall street debut. in the year faring of weak ipo's? we will have that story next. ♪

david: welcome back to her to abigail doolittle has the latest

from the nasdaq. abigail: first, let's take a look at what proved to be two of the most successful ipo's ever at the nasdaq first, amazon, which went public in may of 1997. they raised $54 million and the stock surged as much as 30% that day. this stock is now up more than 30 3000% since that time on a split adjusted basis. amazon is one of this year's asked performers. but strength could continue right into 2016 and the stock could go up another 30% from here in part because of other web services and the cloud unit. ipo, microsoft. the company went public march 13, 1986. the stock is now up more than 56,000% on a split ingested basis -- adjusted basis. now leader of the cloud technology area.

the stock could test an all-time peak of $60,000 in 1999. turning to today's egg ipo, the software maker has left the gloomy ipo years, making 433 million dollars, beating square ipo, priced at $23 million. shares served 30% today, similar to amazon 13 years ago. david: emily chang spoke with the ceo and cofounder's scott and mike. >> we always tried to build a long-term company and have been preparing for this for a long time. for the last four years, we made sure the company is ready to do this. we have a disruptive model in the business. we want to go public when the company is ready, rather than the market. emily: some want to hold you up

as an example of a unicorn that had done it right. have you felt additional pressure from these comparisons to square and other tech unicorns? >> we cannot make any comparisons. i think we build a unique company. collaborate and be more productive. we spent a lot of money on retail development all the way through 10 years of profitability and passed growth. i do not know if you could use our company for other tech ipos. youy: bill told me to tell he is remarkably impressed with the business you build. for othere you have private technology companies out there about how to manage cash, and unit economics in this environment? >> we have always been a disciplined and patient company and tried to focus on the and balance sensible

levels of growth, president -- profitability, and cash flow all at the same time rather than putting all the chips in one basket. i advise entrepreneurs to remove or you're running a marathon and not a sprint and discipline. emily: we are seeing a lot of private technology companies waiting longer and longer to go public, raising higher and higher valuations. you have taken the plunge. do you think more of these companies should consider going public in 2016? should they not be afraid? a company think should go public until it is ready. we have been ready for years. we have a lot of diversified products and operate in 160 companies around the world. we have got a management team we have built up and the products we built, we are ready to go public. i do not think a company should rush into that. valuations may or

may not represent what is done in the public market. we are excited we are taking the plunge and are now a public company. emily chang joins me now. they're talking about how unique the company is and hearing them talk about it, it sounds like rough it ability is the greatest distinction between it and other unicorns in the past. emily: this company has been referred to as the great australian hope of technology companies. if you look at the balance sheet, they are rather unique. couple of days ago, all profitable unicorns have the exit -- oh wait, are there others? the belief is that there are not a lot of private tech companies out there that have the results they have been able to show. in terms of the product, they do have competition, they have a product that competes with ipm, another product competes, so they will have to think about

how to stay nimble now that they are a public company and compete with all these other players out there. it is a bright spot at the end of the year for tech ipo's. it is interesting. they built a strong long-term business. company, they did not look into raising venture capital until much later in the lifecycle and it really focused on the business and it looks like it has paid off. david: thank you very much. tune in tonight to bloomberg west at 6:00 eastern, 3:00 pacific right here on bloomberg television. ♪ . .

3 p.m. in new york and 4 a.m. in hong kong. welcome to "bloomberg markets."

from bloomberg world headquarters in new york, good afternoon. i'm betty liu. here is what we're watching at this hour. stocks in the green on the board for the first time this week. surging into the close. airlines boosting the market. -- a management shakeup at aig. executives booted as pressure from activist investors grows. and why companies like men's aarhouse find themselves in bind as stocks plunge. we are about and hour from the close of trade. i want to go to the markets desk where ramy inocencio has your markets check. quite a dramatic difference. ramy: