-- 3:00 a.m. and hong kong. from bloomberg world headquarters in new york, i'm david guerra. incks struggling to stay positive territory. weakness fraying investor nerves and all of that ahead of the fed 's decision on wednesday. a landmark deal reached to fight global warming. does it go far enough? we will ask president obama's chief science adviser. and find out how spring al assets wants to stay in the company. ramy: we have been of and down, but i hesitate to turn around because i'm going to be surprised once i see this. much flat whenty we look at the dow but we see a roller coaster ride ever since the markets started. and thend in the green

saw session lows come in and then shut up. flat and actually negative right now. dupont being the biggest weight over there. oil has also been a factor. the price of nymex crude has really been all over the place today. we saw nymex crude was pretty much stable up until the 6:00 a.m. market. it actually crossed the $35 per thenl threshold and decided to do a turnaround and we are above $36 and changed. with that said, we are at lows not seen since february 2009. oil has lost a third of its value. all of this is against the backdrop with the fed decision coming on wednesday. let's dive into the terminal

here and check out the fed futures. priced in a 78e -- 78% probability of a rate hike. between 25 and 50 basis points. what are we seeing in the bond markets today? the junk bonds, but i want to talk about the 10 year which has seen an interesting roller coaster. it is near session highs as investors pile into equities, pushing those into positive territory. it is up about nine basis points. this is its biggest rise since december 3. david: now let's get to bloomberg's first word news with brendan greeley. brendan: president obama says

military and allied forces are thanng islam x date harder ever. he went to the pentagon to meet with his national security team. the president said islamic state can hide and is losing territory. obama: our strategy is moving forward with a great sense of urgency on four fronts -- hunting down and taking down these terrorists, training and equipping iraqi and syrian forces to fight isil on the ground, disrupting the propaganda, and persistent diplomacy to and the syrian civil war everyone can focus on destroying isil. david: the rare meeting brendan: -- the rare meeting was to ease public worries about terrorism ahead of the holidays. secret u.s. policy cap officials from probing the applications for visa applicants. that's why they may have failed to notice messages by the

california jihadist admitted visa.ear on a fiancee hillary clinton has solidified her lead over bernie sanders in iowa. the democratic front runner has over the vermont senator. meanwhile, ted cruz has jumped to a 10 point lead in iowa ahead of the first republican caucus on february 1. cruz leads donald trump 41 to 21%. ben carson now in third. trump's strength had been among voters without college degrees and now cruz leads in that category. -- that's the word from the commissioner of major league baseball on the permanent ban imposed on charlie hustle, pete rose. all-time hit king will remain barred from the sport and

ineligible for induction into the hall of fame. you can get more on these and other breaking news stories 24 hours a day at the new bloomberg.com. david: once again, the fed is about to make a historic rate decision against the back drop of volatility and jittery credit markets. they expect to push the liftoff finally. the vix has climbed more than 60% in the past couple of weeks. will it to turn the fed this time around? great to talk to you. you mentioned in your latest note that the global backdrop is increasingly tenuous. i mentioned high a moment ago and we have seen some alarming things in the credit market. guest: one thing markets have faced over the past year is this

a baskethina to use approach to its currencies, effectively delivering some valuation which is having a feedback effect on other markets. the price of oil delivery for the next year has come down about 15%. this means a new pipeline of theress for producers in u.s. and elsewhere and that has had a big impact. the important thing to bear in mind is the u.s. is still growing them for it -- growing employment far stronger than the labor market. anything too risky that the fed might say we will hold off and wait? steven: the international environment and labor market not has come in has dissuade them from moving this time. at whathen you look

might transpire, is a going to be focused on whether or not to be raising rates? how much thought will policy makers give to it going forward? steven: i would assume there is some debate about whether to act at all. ,hether it will be put in place some cycle on a predetermined course, and you heard janet yellen say this over and over again. markets will be vacillating strongly on the economic data coming in and if the u.s. does resist these pressures we mentioned earlier, there will be a stepped-up pace of tightening. david: we have seen such volatility in 2015. do you expect that to continue over into 2015 as well? say as a starting

point, we can always overestimate where we are and this gradual maturing and weakening of the fundamental outlook, we think risk reward is getting worse and the u.s. economic cycle is deep in for the beginning of a tightening cycle. but at the same time, you look at these things and none of this will derail the central area of strength in the american economy or world economy, where there is capacity to grow. but look at all of the little missteps, whether it is the ecp -- ecb telling them to look at that. the notion of duration change in the calculation going forward? steven: they need to fear duration less and fear credit quality more. you want to go up in quality and worry less the bond market will

harm portfolios. result in that would a rise of long-term interest rates, most of those things happen to be good for risk in a portfolio. think about four credit quality and that is clearly centered in the petroleum market, where the largest borrowing has been. we think it is fairly solid but we want to be moving up in credit quality. david: always a pleasure. just a reminder on wednesday, bloomberg will begin its special fed coverage at 1 p.m. eastern, including janet yellen's news conference which will follow the fed decision. coming up, the selloff in high-yield debt is making investors nervous. could it spread to stocks? and the landmark paris deal -- does the agreement go far enough? he called oil at $20 a barrel -- does he think crude

could fall further? ♪

david: welcome back to bloomberg markets. it's time for a look at some of the biggest stories in the news right now. the sheer energy board of director's ceo said they'd made the right decision in terminating him. they wanted to slow the growth in the liquefied natural gas project. he will would have carried out the wishes but was not happy about it. the royal bank of scotland says its investment bank will return to profit in four years. the rbs ceo said restructuring the bank will be finished by the

end of this year. rbs has lost money since it was bailed out by the government. of flights on the leading carriers arrived on time in october, the third-best month in 21 years. , and alaska have the best ratings. you can get more business news at bloomberg.com. now is get a check on some movers in the tech space. ramy: we're going to kick it off with amazon and microsoft. those in the green today and it's good news for the companies themselves after the supreme court decided to side with the two tech giants about patents. they are leading to appellate court decisions stand. looking at the stock movement right now, amazon is up 1.3% and microsoft is up a little more than 1%.

gopro shares are headed the other way. morgan stanley has downgraded the stock to underweight from equal weight and is cutting the price target by half. turns out shares have been tanking all year. shares are also on the downward trend. thething happening here is company is thinking about separating its chip and licensing business. qualcomm shares have been andring near five-year lows it has been facing antitrust charges weighing down the stock. 3rd avenue and now stone

bond funds are falling to the wayside. is there enough investor confidence to pull it through? lisa abramowicz is here to tell us more. looking at the credit markets last week, they said they saw some ominous clouds. what has been going on? lisa: it started earlier this year. since april, $183 billion has been eliminated from the market value of u.s. high-yield bonds, almost the size of peru's economic output. declinea substantial and has been going on for a while. investors are clearly concerned because they are poised to see the first loss since 2008 thomas of they are starting to pull her money out. if you look inside my terminal,

you can see on friday, $561 million was withdrawn from the biggest high-yield bond etf. this is an investment grade etf run by blackrock. it is concerning to people that you see these massive declines in the price and also you see ongoing withdrawals. that's usually a leading indicator suggesting declines will continue. if you look at franklin resources, one of the bigger money managers with high-yield funds, they have a lot of the distressed assets which have gotten hit much harder. their shares are down to the lowest since 2012. have beene people saying this is worrisome because we saw similar things ahead of the last financial crisis. to what extent is there much salience to those calls? a lot of escalation here.

: this is incredibly different in that there's not one major counterparty on the other side of a highly leveraged bet. --re are many levered bets and here and leverage has been built into the system based on these companies that have are at hundreds of billions of dollars since 2008 at really low yields. free moneyn given and now the bill is coming due and they cannot pay. gaswhile, you have oil and prices dropping and copper and coal, all the commodities have been really challenging. that is weighing on companies that rely on those prices to stay high. so there are some fundamental concerns. will there be another long-term capital management? the banks are not levered the way they used to be, so it does not seem like -- 3rd avenue is

not systemically important. my point beingut at this point, it doesn't seem to be a problem but if there is panic, it could escalate. david: you can find more commentary on the terminal. still ahead, 195 nations agreed to a historic climate change agreement. but does the deal go follow enough? ♪

david: welcome back to bloomberg markets. there was excitement outside paris on saturday -- leaders from around the world signed a landmark treating -- when mark treaty to curb global warming. some say it does not go far enough. joining me now is the white house director of policy on the

environment, john holder and. johnholdren. i wonder if you can to me the difference between this conference in the one in copenhagen. john: there were four factors that made this one much more successful than the copenhagen or any of the ones in between. the first factor is the world switched from trying to negotiate top down approach in which everyone agreed to the to atargets and timetables bottom-up approach in which every country was able to determine independently what it was able to do on a time scale. the second big change was the presidents of china and the united states stood up together a year ago in november and said for the first time, we are the two biggest emitters, the two biggest economies, we are going to take responsibility. both countries have been taking specific actions that have

persuaded the rest of the world we are serious and that enabled 185 other countries to sign on with their own determined contributions. that was a huge shift. the third thing that was fundamentally different is that all over the world, publix and their leaders are experiencing the impact of climate change. they are experiencing more he ways, more torrential downpours and flooding's in areas prone to droughts and wildfires, more seasons and the storms. people understand around the world and their leaders understand that it is in their own ends did -- in their own interest to face up to these challenges and reduce emissions. david: there are those who will say built into this deal is not enough accountability. be in thewill pudding, five or six years out.

how big a concern as accountability? john: a tremendous amount of effort was put into the negotiations on precisely that point and the agreement specifies detailed accountability and monitoring measures so all the world will be able to see whether countries are meeting their commitments are not. that will generate a large amount of incentive for countries even beyond the incentive for wishing to contribute to the solution to this problem. they will face embarrassment if they are not meeting their contributions and that will be apparent under the accounting terms of the agreement. david: what are the metrics of success and how long do for you can see whether or not it is working? agreement specifies that every five years, starting in 2020, countries will review their commitments and if at all

possible, ramp them up. we will start to see, since those assessments will be based on what those countries have been able to achieve up until then, we will see already in 2020 how close countries are coming to meeting their commitment. to observel be able in between because we can estimate quite accurately the omissions occurring around the world, we can see year by year how much progress is being made. david: what do you say to critics that say this deal doesn't go far enough? i think of bill mckibben writing that he is disappointing with -- results.ted with the what do you say to critics of the deal? john: we knew all along that no deal reachable in paris and addressing what targets between 2020 and 2030 would be to do the whole job. obviously, if you look at the

numbers, reaching and emissions and holding it to two degrees celsius above the preindustrial level, which is the agreed target most of the world's governments have embraced will require deep reductions after 2030. nobody ever imagined what could be agreed to at this meeting would be sufficient to meet that goal. this agreement puts us on a trajectory compatible to that goal and makes a huge difference in terms of how much temperature increase we can expect over the century we are in. if all of the countries that have made these pledges meet their commitments up until 2030 and if they maintain the same level of effort after 2030, the temperature increase in 2100 is estimated to be between 2.4 and 2.7 degrees celsius. would beny action, it

between 4.1 and 4.8 degrees celsius, which is an enormous difference. we are aiming to get everyone to ratchet up their ambition over time and get us on a trajectory that will hold the temperature increase at least two two degrees and, as the agreement mentions, for the first time, with additional effort, holding the temperature change at 1.5 degrees celsius. david: thank you very much. globalhead, citigroup's head of markets and why he thinks he will be global markets will be on the road to a modest recovery in 2016. ♪

david: this is bloomberg markets. let's get to brendan greeley with more from the news desk.

brendan: president obama says military and ally forces are hitting the islamic state more than ever. in a statement afterwards, the president said the group's leaders cannot hide and that it is losing territory. president obama: that we are going after isil to libya, where we took out abu not be oh, the leader there. hide and ourcannot next message to them is simple. you are next. david: the meeting is part of a public relations drive to ease public worries about domestic terrorism ahead of the holidays. mr. obama will travel to the national terrorism center thursday. john kerry is headed to russia for talks aimed at stability in eastern ukraine. last week into climate talks, kerry will meet vladimir putin tomorrow. chris christie will be back in primetime tomorrow night when the candidates debate cnn's's

major decision based on recent polls. relegated to a preliminary event in the debate. tuesday is the deadline for millions of uninsured americans to sign up for coverage. the health insurance expansion is beginning his third year. customersd healthier could hold down the market struggling to grow. even some major industry players have recently gone public with doubt. are being held throughout connecticut today. three years today was the new town masker. it is the first time the anniversary has fallen on a school day. calls were brought for tougher -- laws that since then, from the bloomberg first word desk, i'm brendan greeley. let's take a look at

today's biggest movers. cotton dropping for the third straight day for what was the year's best-performing commodity. natural gas at the lowest prices 2002 thanks to the mild winter we have had so far and oil rebounding below $35 per barrel this morning. i want to bring in and more, joining us from citigroup's office. as you watch the price of oil this morning. how did you interpret it? ed: i by no means think the work is over for oil prices. we think maybe even going into q1 of next year, more bearish practices will be rising in the markets david:. david: we were talking about opec in the last couple of weeks. a big meeting in vienna. you have saudi arabia trying so hard to push prices down and keep them down. how long is that sustainable? ed: that country has thought

about the cost of doing it. they have a rare -- a very robust view. as a result of these prices. they have a decent and accurate view of where oil will be shut in. boost prices to a higher level. they more than anyone else can sustain prices at this level. within anyces deep oil producing company and they wanted to declare victory, victory which has meant they keep their market share and grow it a bit and it also drives out the competition for prices. david: it seems like we are getting fairly close. ed: we do not know from their public statements what that might the. we think they are accepting a lower price than a year ago when they went on. the effort to regain market share, at the time in the fall of 2014, we thought the goal was

an $80 price range p we now think it is a $70 price range. we think it will rebound to that level more or less if we can continue to have a decent amount of global gdp growth around the world. david: iran, negotiations continue. when the stations might disappear is still up in the air. infuse the market with a lot of iranian oil. ed: they plan to put as much oil on the market as the market can absorb. tito's big questions and we think is more likely in the than of $300,000 per day 700,000 per day and then adding up to one million barrels per day in the year. we have a lower expected volume in markets. the other hand, we think the consensus is moving to an , probably in q1

rather than q2. have been implementing what has been expected of them. oil sanctions lifted sometime next month, and before their february elections, the governor would certainly like to see sanctions before the mid-february date. david: who does that stand to affect the most? when iran enters the global market moore, who will that affect? expectxist -- markets this will be the asian market. we think the european market. cargoes fromivered iraq and russia that are really vulnerable. as a result of european sanctions, they had dropped their imports from iran. day, but0 barrels per something is likely want to show

to iranian authorities, that they are serious about doing upstream deals. buying iranian crude is one of the more likely options they have available to them. this can be fairly disruptive logistically. supply chance would have to redeploy to other markets. the european market in particular can be a little sloppier than the rest of the world. this all meanes for independence in the u.s.? ed: we have an average price for wpi in the low $40 range for the next quarter. we see it that way in this quarter. ofre could be a good chance prices dropping below the $30 range for time in the first quarter. the spells distress for distressed companies. outlook strikes us as one of forward-looking consolidation. we expect that consolidation to

hit the u.s. industry. david: a lot of conversation in washington about the crude export plan and whether or not to lift it. what effect does that have as you see it? ed: in the longer term rather than the short-term, it should have an effect. being exported in large quantities other than neighboring companies -- countries like mexico and canada. up moreill open opportunities to export crude. the canadian market is already saccharine -- saturated with u.s. crude. the mexican market could see crude coming in for two purposes. one is to help mexican refineries to make more products like gasoline which they import. crude withs to blend the u.s. with heavier crudes to sell with europe, competitive. could be a short uptick in u.s. exports as a result of all of this but the massive uptick

people would eventually expect would come from a resurgence of u.s. production and we do not see that happening much before 2017. david: thank you very much, ed. coming up, the rivalry between donald trump and ted cruz heats up. more on the latest poll results politics orrg piling on the pressure, one calling for job cuts and former a semi mire to go. coming up, the chief investment officer thinks the fed decision tightening this month could be misguided. ♪

david: welcome back.

donald trump is having a good day and a bad day if you're paying attention to the latest poll numbers. he hit a new high of 41% in a ,ust-released national poll nearly tripling the score for ted cruz at 14%. runnerz is now the front in iowa by double digits. leading by 31 221%. i want to bring in mark halperin. before we talk about the numbers and what they mean, another piece of news about donald trump, he promised he would release his medical records and they would show perfection. they are out and his doctor is ", if elected, i can state mr. trump will be the healthiest individual ever elected to the presidency." little bit of trump in the doctor. donald trump does have incredible energy and one of the most vivid memories i have was walking behind him in temperatures of over 100 degrees

about an hour while he shook hands. i was exhausted he sat down for about 14 seconds and got back up. he does, for his age, have extraordinary stamina. according to his doctor, his record works out well. he eats not the most healthy diet in the world. he likes a lot of fatty foods. believed,tor is to be mr. trump for a man his age is in good health. trump, clinton, and sanders are all pretty old by the standards of the rest of the field and all three seem to have any good stamina. david: let's get to the iowa numbers. showing ted cruz here with a 10 digit lead ahead of donald trump in iowa? polls likee a lot of ours and we like ours. the question is who will turn out to vote. i think ted cruz has a read and i will but trump is not giving up.

doing well in every other state but iowa, every poll for several months now. i what is a problem for him. i have from mr. trump himself as they will try to come back. they will try to beat ted cruz there. you see trump in gauging crews and taunting him and trying out negative attacks and ted cruz trying to turn the other cheek. that dynamic. -- how ted cruz will respond, dominating on the debate last year. side by side as the moderator's will not shy away from trying to create a little ted cruz and trump action. utility of is the the national poll at this point in the campaign? you would think if you wanted to focus on iowa and new hampshire after that -- what does the national poll tell us? the national poll gives a

sense of the mood of the electorate. or foure two or three candidates that go on into the spring and you will run into a moref states that make up than just the first handful of states that are disproportionately influenced. we tend to focus on the horse race number and who is winning and losing, but the other questions on the survey and demographic write-down. it is interesting nationally to get a sense of how the messages are resonating more broadly. we have pulling on democrats in iowa as well. doing?hillary clinton quite similar to what the race has been. both sides tell me they like the poll. clinton has a big lead but not so big that we become complacent. hillary clinton had a great couple of months. the benghazi hearing where she

is said to have done well. the conventional wisdom is the race is over and yet sanders is within hailing distance in iowa. both sides have pretty good arguments to make. sanders is not out of it. he does have a gap to make up in iowa for sure. david: thank you, mark halperin. join tonight at 5:00 eastern. a reminder, debate night is tomorrow night and john and mark will be live from las vegas. now time for the bloomberg is this flash. private equity firms reportedly charged $20 billion of hidden fees on the 600 companies they two decades last according to an academic study in wall street journal. of $1.1 trillion. the supreme court said directv could avoid a class-action lawsuit over early termination fees. they could force to private arbitration hearings instead.

the judge ruled 6-3 the contract prohibits customers from banning together to sue the company. mark annette named president of mgm television digital under a five-year contract. the company taking full control of united artist media group. ♪ you can always get more business news at bloomberg.com. let's head to the markets desk where ramy has the latest on winners and losers. ramy: i will start with one of the winners. who would have thought the early will talk about energy stocks, among the top performers today. take a look right now. exxon mobil is up. chevron 2.5%. 3%,up by just a little over all as nymex crude rises. with crude, higher than $36 per barrel this morning.

got a throw a little bit of water on this. still at lowe's. -- lows. bml has raised its rate to outperform from market perform, raise its target eight dollars. you can see the intraday chart prices is up about 3% here. this could be over sales for the new barbie dream house, which has a garage for the first time of the year. do not last. $33 per share. you might have to work harder to pay off the house edition. dupont, they are going the other way but falling after the last week's merger. dan loeb, the founder of hedge fund, supports the deal but does not support the dow ceo and is calling for his removal. investors are not so happy with that here dewpoint and dow

chemical are down. loeb is questioning whether the deal was rushed. the third point does hold. thank you very much. coming up, are 9000 job cuts what yahoo! needs to bounce back? three fourth of its total number of workers coming up next. ♪

david: welcome back. with stocks fluctuating near two-month lows, abigail joins us live from nasdaq with the latest.

is the biglatility story with the nasdaq up slightly earlier and then actually down 1%. we are down modestly. this has left them nasdaq composite index below its 200 day moving average. it may prove to be a bearish signal. at the very least, it probably signals we are likely to see even more volatility ahead of the fed or around the fed. a piece of that today is apple. waiting.he biggest shares are down. saying the apple supply chain is showing signs of weakness and this could weigh on fiscal second-quarter estimates causing them to come down. it represents one side of a tug-of-war on apple in the second half of the year. some analysts are talking about a strong holiday and good demand. others are talking about a weaker demand through supply chain companies including sky works. all are very volatile, swings up and down.

thise flat on the year at point. what may be the tie-breaker is whether or not apple grows its process in fiscal year 2016 as it is currently expected. --id: abele gail doolittle abigail doolittle joining us. it is investigating the closure of 3rd avenue credit fund, conducted by the secretary of .he commonwealth bloomberg news is reporting that right now. a company facing mounting pressures from investors making significant changes, it owns 10 million shares of yahoo! and urges or members to take action, saying waiting another year is simply not acceptable. another yahoo! investor presented yahoo! with a 900 page proposal, 900 job cuts. joining us to discuss his emily chang. about the spring plant 99 pages.

a lot of slides and a lot of details here. and he says this is something the yahoo! board will take seriously? everyone has an opinion. eric jackson used to be at one fund and now it is another fund called spring owl. small stake in yahoo! but the exact amount is undisclosed. he has taken on yahoo! and has been talking about yahoo! now for many years and he thinks that if yahoo! proceeds with a plan and what yahoo! said they will do is more spinning off its core business, not spinning off for now, but he thinks the worst possible thing to happen is this takes another year and at the end of the year, they determine they cannot spin off the core business and that is another you're lost in terms of yahoo!'s future. inis saying right now, bring someone who is more sales and operations oriented who is going to drop the preconceived notion that we can restore yahoo! to its old greatness, but he does

not think it is a complete lost cause. he thinks it can be something better but that mercer mayer is not someone to do it. cuts.ting 9000 job this is a workforce of 12,000 but get 9000 people out the door. , goeback what they need back to the old logo to signify the marissa mayer era is over. the iconic 101 billboard on the iconic freeway to convey the message to the world. in terms of what to actually do with the core business, he is saying focus on things like potential like finance and yahoo! sports and do not focus anymore on search. they already lost the battle. a partnerether with like liberty media to explore the core restructuring, to score the issues further with a potential spinoff but do not continue to buy what he calls zombie companies.

they recently spent an estimated $200 million on a company and he says she cannot be given license to spend so much money on acquisitions that really do not add anything to the company. david: what happens next. marissa mayer addressing last week on a conference call to what do we have to look forward to? we might learn what exactly she is thinking about the future of the company. emily: she is on maternity leave. just head twins a few days ago and no one is giving her a break. before she left, she came out saying we are not going to sell the company. we will explore off the company. we will not spinoff alibaba stake. she appeared in public with the chairman who supported her. board continues to support marissa mayer's leadership and she is not going anywhere at this point. you do have these investors.

star board, we hear a bunch of investors have sent their ideas andhe board privately everyone wants something different. she is therefore now but people are talking about, if they fired her now, it would cost them $25 million at least. it certainly does not seem like she has job security but the board reiterated their support for her. much, thank you very emily. we continue to bring the latest tonight on bloomberg west 3:00 pacific right here on bloomberg tv. coming up, the south african rand gaining strength against the u.s. dollar. chief investment officer at merk investments. merk. ♪

brendan: good market day to you. this is what we're watching. u.s. stocks struggle for direction. casting a weary eye on the federal reserve, which will decide the future of industry on wednesday. high-yield credit. was it his capital partners is shutting down. what is going on? in oil prices find more in the latest market? it will boost its production, and we are one hour from the close of trading. let's head to the market desk where rami has the latest. where are we now? look at thetime a markets, i am not sure. we will take a look right now. it has been up-and-down volatile for the whole day.