[closing bell] alix: u.s. stocks rebounding, the s&p bouncing back coming to its chief level since 2006. scarlet: the question is, "what'd you miss?" some fundst carnage, are liquidated. how bad could withdrawals be? the fed alert, we discussed the mechanics behind a fed increase. alix: oil fallout, crude dipping for the first time in six years below $45 per barrel. which companies are feeling scarlet: the most pain? but we of course begin with the markets. funny that we should end at , stock indexes gyrated in the morning, settling down in the afternoon to a tight range before finishing on an up note. onically, the hold is

wednesday when the fomc decision comes out at 2 p.m.. fixated on the macro environment, fed, and mmodcoies alix:. alix:exactly the right point -- commodities. right point. the at one point oil was near a seven-year low but slowly started to grind higher, helping to lift stock markets as well. that 40-year-old export ban, the market is so short right now you get any kind of these lines, you can see the rally higher. my favorite quote from the day came from commerzbank. they wrote that the selloff on the oil markets has taken on "ludicrous dimensions." oil prices have been falling findnuously or weeks and themselves now only marginally above the lows reached during the economic crisis. guys, no fundamental reason. what's going on? certainly a question

worth asking. apple has hit its eighth decline in as many days. today's catalyst was morgan aftery, dropping 5% to 6% its previous estimate. they are saying higher prices in international markets with maturity in developed markets, like the u.s. and europe, meaning you will get a slowdown in user growth. alix: so, you know, it really matters. scarlet: it definitely matters. deep dive inside the bloomberg terminal, taking a look at the difference between s&p, green line, and gas. s&p,reen line is exploration and producers with a white line, get this, high high-yield fund from barclays. you can see how the etf and high bond yield etf has moved relatively in tandem, but the

s&p is really shaking it off. but can it last? you can see a correlation really starting to take place there. if i can zoom in there. is that going to last? are we going to see a drag stocks even further down? deep diveet's take a into my bloomberg terminal here. this is the yield curve, the spread between yields. what it has been doing is flattening in each of the last five tightening cycles. each of the circles represents tightening by the federal reserve. a flattening curve represents investors betting that long-term treasuries will outperform short-term debt and they are expected to begin another round of tightening this week. look for this curve to flatten if history proves correct. scarlet: is that what they want -- alix: is that what they want? they do want to necessarily see a lower 10 year or 30 year. scarlet: you can see these charts and more on line. alix: our chief global

strategist from which a bank is with us. welcome. scarlet: there has been carnage and high-yield credit. many managers are protecting more losses ahead. what is driving the selloff? -- as simple as driving prices below $36 per barrel? >> do not forget the huge part of the issue from the past few years going to shell companies to fund exploratory explorations. perourse, with oil at $34 barrel, these business models don't look as healthy as they once did. beyond that we also have the 3rd avenue closure. people are worried that this is the culmination of multiyear worries about liquidity in the market, fundamentals in the market, and basically just a surgeon corporate credit. what ifound -- alix:

found interesting is that goldman sachs put this out and said -- guys, this is what we look like in a recession. this is exactly what we see when the economy goes south. but that's not the case this time, mickey. i -- not at all. i would say that our take is if you take a look at high-yield or high-grade energy sector everyone'sich are focus right now, it's exactly what's happening to oil prices. high-yieldase and that other sectors over the last three to four trading sessions have started to lighten. there are some plans for contagion and repricing of the credit markets if you want. if you look at high grades, they have widened again. everybody else is flat to narrow.

no one knows is showing signs of repricing. tracy: what concerns me most is that drunk -- junk bonds are about confidence. so, when you see a diminishing of confidence like we have over the past week, it becomes easy for the contagion to spread. if it gets bad enough we have companies not able to refinance themselves. true, they have refinanced out or many years, taking advantage of low interest rates. but you could still have the potential for some companies not to be able to refund themselves and at that point you have a knock on effect in the real economy. i would say -- and i think you would agree -- it all depends on what happens to oil prices. we have moved exactly in line with oil prices. on oil prices i would say that since 2014 we have been falling very hard and very fast. the point we have always made is ast oil was 50% to 60%

expensive them and it was basically chasing the fair value down. if you look over the last few over the last year, it's a cheaplf, value number one and if you look at positioning, oil market positioning is peculiar, so i am referring to gross positions with delta net positioning. those gross positions are back, close to or at slightly above. scarlet: and we will get that later on. alix: but part of what i see in the energy market is that no one believed that the oil prices would be this low for this long, which is why you had to determination times that had defaults but now it feels like it might happen the next day. scarlet: and it's not just dominated by these big energy

names, there are telecom weaknesses as well. there is some dispersion that goes beyond the mining sectors. tracy: i think that's right. people talk about liquidity in the market. people have talked about one or two bonds that suddenly out of nowhere seem to take a deep dive is the investors pull out and that's symptomatic of, i guess, extreme illiquidity. again, not everyone will be like that, but we do see anecdotal evidence of that happening. scarlet: one chart that you pointed us to last week that was fantastic and how the 3rd avenue fund brought out the latest wave of concern when it was lucid. here it is, the fed funds rate is inverted here, showing that monetary conditions were really right when 3rd avenue focused credit funds did well. this is an important point. we had companies issuing bonds with lots of investors pouring

money pretty much indiscriminately into the asset class as they sought returns. now that financial conditions are tightening we start to see a shakeout of the market and you start to see people differentiating between -- hey, here's a bad distressed asset and here's an investment-grade bond that doesn't look nearly as bad. in some ways that's healthy for the market. the thing to worry about is whether emotions get the better of investors at this point and they start running away from the class indiscriminately, the same way they came into it. alix: speaking of wrapping up, tracy, you have launched a podcast online talking about mules? this is right up my alley. not donkeys or horses, but mules. [laughter] tracy: specifically new. the overflow area for all the interesting things that we talk about in markets and when we are sitting at our desks. this week we were talking about mule trading. there is a legendary mule trader called ray lum who made millions

from trading livestock in the early 1900s. we are looking at him and asking -- what does it mean to be a traitor? what does it mean -- trader? what does it mean to be one now and we stare at numbers that are electronic all day? alix: thank you so much, tracy, for joining us. binky, you are stinking -- sticking with us. scarlet: coming up, we will discuss various catalysts. next. ♪

alix: coming up, larry summers,

joining "bloomberg surveillance" at 5 a.m. eastern. get your coffee in your doughnut. don't miss it. i'm alix steel. "what'd you miss?" president obama says that allied forces are hitting the islamic state harder than ever. he went to the pentagon today to meet with his national security team and afterwards he said that the islamic state cannot hide and is losing territory. president obama: our strategy is moving forward with urgency on four fronts. hunting down and taking out these terrorists, training and equipping iraqi and syrian forces to fight isil on the ground, stopping operations by disrupting the recruiting, financing, and propaganda. finally, persistent diplomacy to end the syrian steerable -- syrian civil war so that everyone can focus on isil. alix: it's part of a public relations drive to ease domestic worries ahead of the holidays.

leading ind cruz is iowa. backed by 31% of republicans in "des bloomberg politics moines register" paul. donald trump is at 21%. ben carson is at 13%. hillary clinton has a nine point lead over democrats in iowa. cnn made the decision to debate based on recent polls. chris christie had been put in a preliminary debate in the previous event. scarlet: i think they call that the jv debate. serena williams, the first female athlete honored on her of for more than 30 years "sports illustrated." theseu can get more on and other breaking stories 24 hours per day at the new bloomberg.com. we are back now with binky chadha. binky, we were talking earlier about oil.

they recovered, but they still that slump.ses from you were talking about the curious positioning and oil. what did you notice? mind ishe thing to even that oil has been falling since mid-2014. at the time, as you pointed out, 65% fair0 percent, value. a very short move up in the dollar with a catalyst that started to unwind. oil has basically been falling since then with a couple of bounces in the middle. it is important to keep in mind that the fair value was also falling. our take is -- pretty much it happens to be the second time that oil is basically cheap to fair value, number one. that should help to create the two-way market. you are looking at brent

oil prices trending lower with the u.s. index that's inverted. as we see it at the right-hand side of the screen, you are actually seeing the u.s. dollar fall as well as oil prices, which is highly unusual. they are usually very correlated. binky: that is exactly right. if that was the onlyer o driv oil prices, if you squint your eyes carefully oil should be at $46. there are other drivers and the whole model basically cheap, but not as cheap. oil through most of the decline has not been cheap. the cheapness of oil relative to fair value is unusual. and that has basically allowed positioning, i would argue. certainly short positions have been rising, but there has been a steady possession that has not --

procession that has not come off the table. alix: except -- binky: except for a brief time during september 2014. that's why i call it the curious case of oil positioning. that we haveline had, these positions have not really moved and we noted previously that we seemed to suggest that there is a fairly significant sort of investment or asset allocation flow that is, you know, basically impervious to what's happening with price. so, do you buy it here? binky: given the volatility i was say that it's starting to get interesting, but it is still a bit early. yes, the trade literally taken would be too short the dollar and long, basically, oil. alix: have some xanax and a couple of glasses of wine. [laughter] i don't wantbinky:

to mislead anyone. we are talking about medium valuation. it really needed to go a bit further. but it looked jointly at other thats, like positioning all-time high. we were there basically in march and when we got the catalyst we balanced i-30 percent. -- we bounced by 30%. you should be pretty cautious. it would not take much to move on to catalysts, but it has already been discounted. fast,t: that could be furious, and violent. looking at you militant equity -- cumulativee is equity flows, everyone is looking at the united states. does it not but the onus even more on the communications strategy between them and the investors in the coming months? isky: i think that equity about growth, not really monetary policy.

does coordinate with monetary easing from central banks. binky: europe today at the close, the closed just before oil bounced earlier in our day, but it has pretty much given up all the gains. remember in the first quarter after their first big bang qe, europe was at one point up 22%, 25%. we have given that all up, even though we have another round of qe i would argue that european growth is good and solid and it is just that as the euro fell a lot of people just basically piled in. i would say it's the biggest launch in trade. alix: meaning you want to be out of that long consensus? binky: it is basically neutral. i don't want to be underweight just yet. we think that next year at some point in time the fed basically is priced in to the market.

we would look to go along in emerging markets. the question is, where would you find that? i would argue that europe is a prime candidate. but again i'm talking about the future. you mentioned in one of your notes that the equity risk rhenium is down. a percent stood out to you. that's the return in investment in stocks providing for you over treasuries. why is this on your radar? the big question is -- what happens to equities when the rates go up? the to pull narrative is that when the rates go up, the required rate of return on equity is going to go down. equity prices will fall. so, if you think about the yield 10%, theat around

points i would make are the 10 ofr treasury yield are 2.2% that. most of it is really the equity risk. if you look at that historically , it is very strongly negatively correlated to the 10 year treasury yield. the point is that part of the reason the equity risk premium is at a 70 year high is because treasury yields are lower. when they go higher they would predict that when risk goes down the rise in the 10 year yields should be a nonevent for equities. good perspective. much more coming up. is the global economy ready for a rate hike? we will discuss the potential economic repercussions. ♪

alix: i'm alix steel. "what'd you miss?" we have a story about boeing and its share buyback program. raising they are quarterly dividend to $1.09 per share, putting their excess cash to work. boosting earnings and raising the dividend with more cash return to shareholders. alix: all right, we are back .ith binky chadha we have seen the u.s. economy accelerate, as well as the euro area enter the green. do you feel that we are at peak divergence in terms of the two central monetary policies and the two countries? u.s. growth is supposed to slip next year. binky: u.s. growth -- to being up byd 3/10 of 1%. band ofhat's within my

measurement error, so i would not worry about it too much. if you look basically at headline gdp growth in 2008, 2009, and you take out the government sector, the private sector is 80% of gdp. that's grown at a healthy 3% into a very clear, steady trend line. i think about underlying growth basically as 3%. if there are going to be big changes, it would be the headline number as the government comes back because of defense at the federal level. but mostly i would say because of the state and local government level. i would argue that underlying gdp has moved up to the 2.5% vicinity and it will continue to basically move up, so i'm not worried about the growth. in terms of the divergence between the u.s. and europe, you know, the group divergence is actually getting a little bit less. steadilys been growing and i think continues to grow

and the u.s. has been divergent. i would argue that it's no big difference. if you think about the unemployment difference on the divergence, the levels are higher in europe, coming down slower but our study trends so far. i would say that we are at or past the peak divergence. scarlet: what does a typical global economic recovery look like and how close are we to it? binky: you have to take a really long view in terms of thinking about typical economic recoveries. that this is a very typical global economic recovery. alix: it doesn't look like one. last one was more atypical. 2002 through 2007 was a more globalized economic expansion. we have to that -- we have had to of them since 1960. your point with this chart, asynchronous growth? binky: exactly.

there is a problem with a synchronization, it feels like there is a problem at some point everywhere in time. lotit is actually doing a better than the 1990's and i don't have to remind everyone about how they did in the second half of the 1990's. are we looking at when the fed raises rates, the greenspan conundrum? the long end of the curve staying flat? binky: i think that that would be hard to repeat because i would argue that that conundrum had to do with the fact that the u.s. dollar was in the opposite with, basically going down capital flowing out of the u.s. and into emerging markets. because we wanted to keep the exchange rates fixed, we are now in a reverse cycle where the dollar is going up and emerging markets were selling treasuries. very difficult to get the bond premium to stay at zero, where it is that today. don't miss the special

fed coverage wednesday, starting at 1 p.m. eastern time here on bloomberg. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. 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: i'm scarlet fu. "would you miss?" let's get the first word. a research it will face charges desertion. the army made the announcement that he was held by the telegram for five years after he walked away from his post in afghan istan. he was released for five taliban detainees. alix: president obama says he wants to visit cuba before the end of his presidency but the conditions have to be right. in an interview he says "if i go on a visit, i get to talk to

everybody. i made very clear in my conversations that we will continue to reach out to those who want to broaden the scope for free expression inside cuba." three years to the day since the new town massacre. it is the first time the anniversary has fallen on the school day. calls for tougher gun t since then many states have loosened. .lix: a new decision means rose will be barred from the sport and therefore ineligible for induction into the hall of fame. ofrlet: you can get more these breaking news and other stores 24 hours a day at bloomberg.com. alix: let's get a quick recap of how u.s. markets closed. of thest rated for most morning, trading in a tight

range in the afternoon. dow adding 103 points, the thanks to apple which fell for a second day. morgan stanley saw unit sales dropping instead of rising. well.t: oil did that as it was able to rebound. you have congress right now talking about lifting a ban, in-old export the market is so sure that you will have movement in that is helping stock. alix: and we need to stay with oil. we talk about the stress of the high-yield credit market, they do not share the same angst. that's not the whole story. here is a chart where the s&p 500 is in yellow, and members are judged in terms of credit worthiness. thisndex is little changed y off by 1.5%ear,. year, off by 1.5%.

the blue line is what it want to show you. it's a custom index created by bloomberg. it attracts companies who se credit is rated junk and it is down 48% this year. hyg, makesrse than the s&p's move look like it is starring in comparison. scarlet: it raises the question of contagion versus sentiment. the thing with deutsche bank may not be seeing a path. something that struck my eye last night was the total change in management. this is one of the most fascinating companies i've ever talked about, the first that was able to export a liquefied natural gas. take a look into the bloomberg ferminal for a chart option cheniere.

the ceo wanted to build an import terminal, got the funding, then changed his mind. he wants to be in export terminal. raise funds. then he had not made a profit. highest-paid ceo the united states in 2013, then he got fired. carl icahn has a stake in cheniere. it is a very dramatic reversal for company that was truly a pioneer, and the first to do it. scarlet: maybe a little bit ahead of its time, if you want to look at it one way. it will be the stuff of movies and tv shows. alix: that's true. fascinating story. this wednesday, we will find out if the fed will raise a rates for the first time since 2006. that officials of have more confidence in the economy and had been hinting at hikes, but how gradual will it be? joining us now is michael clarity, head of u.s. straight rate strategy.

thank you for joining us. what we have seen as a divergence between what the market expects at what the fed has forecasted. which one asked to meet up with each other? >> i think the market will be disappointed on wednesday. everybody is talking about a dovish hike. i think that will be very hard for yellen to deliver. first, just the pace. of market right now is pricing for only half percent of tightening in 2016 and again in 2017. that is not a gradual pace, that is a glacial pace. it will be hard for her to move down far enough in line with the market. in addition, she has a different audience than normal. we are used to hearing yellen talk to market participants, so it is easier for her to be more refined in her message. this time around she has to explain to congress and the public why she have to get off of zero. it is very hard to do a super

dovish spin when you have that audience in mind. scarlet: why is that? how does she achieve both? houses to talk to investors and also convince congress and the public? >> that is the problem. i think it will be impossible. scarlet: how ugly is the fallout going to be? >> i think we will have a knee-jerk reaction, and that will be want to take advantage of. you will price in a much faster move. alix: do you think the market expectations move up to the. plot? >> not that far, but we will narrow the gap. is that thisoblems time of year, liquidity is core. we are seeing it in the high-yield bond market. a lot of the new regulations have specific dates where bank balance sheets need to be very constrained. any funds in need to

do any sizable flows in there, you have a much larger price reaction for the same low than we are used to. today we have been seeing that in high-yield. we have a firm liquidation, a very big move in market prices. i think that is exaggerated to the fundamentals. alix: the other issue that seems to creep up when it comes to the fed hike is, yes the fed can control short and, botanic control the long end? will be like the greenspan time? >> i think the problem is we are already price for that. the current is extraordinarily flat relative to traditional measures. if we look into what's priced in for the long end of the curve, we will dramatically outperform the shorrt end. it is hard to deliver that much.

basically markets are still pricing for the endpoint of this tightening cycle to be a little bit above 2%. again, that is lower than they used to get in most past tightening cycles, so after this rate hike, as we move into the first quarter, there will be enough of an inflation scare that it will force the market to and point of the tightening cycle, and the back end of the curve will get hurt in that process. scarlet: what is your level of confidence that the fed can bring the excess liquidity without causing major disruption in the global market? the liquidity drain, i don't think we will see those go away for a very, very long time. scarlet: maybe for a while? >> for a while. the fed will be relying more than ever -- they talk about interest on excess reserves more important is this facility. when a policy rate moves, there is no economic effect. there is only an effectively get

other market rates moving along, private rates moving along with that policy rate. the old days they could move the fed funds rate and banks would try differences and just pull those right along. these days, bank balance sheets are too expensive. you have all this new regulation that makes it costly, and it limits direct arbitrage activity. all these things mean i don't think the bank will be useful at converting with the fed does into what affects the economy. you need a non-bank to do that. that means you are acquiring on money funds, and arbitrage against that. scarlet: interesting. michael cloherty. don't miss this special said coverage starting here at 1:00 p.m. eastern on bloomberg television. scarlet: coming up, the price of

oil dipping below $36 per barrel. the fallout from specific energy companies, next. ♪

alix: coming up on bloomberg television, the blackrock global head of shares will be joining bloomberg tomorrow at 9:00 a.m. eastern time. you don't want to miss that conversation. scarlet: i'm scarlet fu. "what did you miss?" let's look at the biggest stories in the news. bowling goes it is quarterly dividend by 20% and offered a shared buyback plan that will enable investors to cash in on foreign airlines. but when you speaking with other companies to speak about the longevity of the market.

cheniere energy board of directors terminated the ceo. in an interview, he said that a directors wanted him to slow growth and liquefy natural gas is, and what have carried out wishes but was not happy about it. he says he still owns 5 million shares and plans to be a vocal investor. scarlet: apple music is getting the best holiday gift from taylor swift. she is releasing her world tour concert exclusively on apple music. it is free for streaming for apple music users. it is set to release on sunday. apple music is currently the only streaming platform selling her best-selling 1989 album. that is your bloomberg business flash. alix: the bloomberg commodity indexes at the lowest level since 1999, and no one feels the pain more than commodity companies. joining us to talk about the next leg down is the university of houston professor.

craig, what confuses me -- if you take a look inside my terminal and you look out of or day chart, they are doing everything right. they are cutting their workforce, selling, dumping 60% of assets, that investors still seem unhappy. what is up with that? >> it's just a reflection of the fact that they are not meeting the long-term outlook. things would be even worse if they were taking those measures. does that mean the markets don't believe they can change, or it is too little, too late? what is next, what can they do aside from dumping debeers are spinning off their company? >> there is a lot more. -- there isn't a lot more. once you/your dividend, spun off assets, you are sort of running out of plays in the playbook. if not a very happy situation.

off: even when they spin assets, they will not necessarily get the best prices. never mind we don't know who the buyer is going to be. is that setting investors up for disappointment regardless of what happens? >> well, you never want to be the seller in a fire sale. a veryow there is not strong market for commodity assets, and that's what companies like anglo-american and glencore, the situation i find themselves in. alix: that is reflected in their credit default swaps. it really spiked. anglo american is on watch for junk warning. how much worse can it get for these guys? are we looking at bankruptcies of major commodity companies? >> it's possible. glencore is potentially walking

a line on that. in many respects, they are hostages to what happens in the market. if the commodity cycle continues the way that it has, prices remain low or become even lower, then bankruptcy or a major restructuring is a realistic possibility. scarlet: that brings us to the bigger question, which is that everyone is waiting for capitulation in the global commodities market. what does it look like? will we know it when we see it? >> if by capitulation you mean is anybody going to cut output, the shale plays in the united states will reduce output. down and some of that output will decline in 2016-2017. but if you look at the major producers, they don't have an economic incentive to cut output. if you look at their market be a, it would basically revenue losing cost position for

individual companies, even as big a saudi arabia are russia, to cut output. they will continue to produce. we are also looking at iran coming online. that supply situation is very bearish, and combined with more demand. scarlet: so can we reach bottom without a country like saudi arabia or iran cutting production? >> yes, i think we can reach bottom when demand turns down. i think the turnaround will be more demand driven as opposed to supply driven. alix: you make a good point, because if we look at zinc and copper, those were crushed, but we have seen supply cuts. do we need demand to be that much more awesome to wind up supporting prices? >> i don't think supply cuts could do it alone. it varies by commodity, but particularly in oil, i don't see individual countries, major

producers having the incentive to cut output. the united states output alone will not sufficiently reduce. in my view, it will have to be a demand turnaround. scarlet: let me ask you about natural gas. we talk so much about crude oil, but is that a precondition for natural gas to rise in price, or can it do it on its own? >> nat gas, the correlation between oil and nat gas historically has a relatively low. a lot of what's going on in nat gas now is driven by north america and houston. inventories are immense. it has its own fundamental drivers, in those of the fundamentals that will drive it in connection with oil, which is relatively modest, except that they are both affected by demand. if you come inside the

bloomberg terminal, i am looking at natural gas in the northeast. we are looking at $.79. i mean, how many companies will that put out of business? it's surprising that they have been so resilient so far. but i don't think that resilience can last forever. particularly if it is a warm winter in the northeast, part of the problem in the northeast is that because of infrastructure constraints the gases trapped up there, but there is no demand and it will be pretty brutal for the producers. scarlet: so basically it will hurt for companies. that is the takeaway. alix: craig, you are staying with us. coming up, how the credit market downturn is impacting the energy market, or vice versa. ♪

scarlet: i'scarlet fu. m "what you miss?" 2015 is shaping up as potentially the worst non-recession year for high-yield bonds. a lot of people are worried about the high-yield bonds, in credit funds as well. what is the distinction of what we are seeing now versus back in 2008? of what is going on in high-yield right now is driven by energy, and low oil prices. we have low oil prices in 2008 and 2009 because we had a big

recession. the oil price collapse we are seeing right now, and that is having a big impact on high-yield. fed and theh the overall market, that means that some of this is spread in a less severe way to elsewhere in the high-yield market. scarlet: if you take a look back at the last couple decades, the credit cycle always has one sector in default. in 2006, it was autos. 2000, technology. they tend to be anywhere from 200-500 basis points over the corporate market. currently, metals and mining are gearing those levels, that are below. do we have more downsides to come in the high-yield credit market? again, iially so, but think this will be true than by

what happens going forward in the energy market. in a market, you are chained to what is going on in the oil market, the copper market, the cold market. -- the coal market. depending on what happened in those markets it will drive what is going on in high-yield market. the high-yield market is systematic of what the commodity busts. alix: and was also symptomatic is the lack of due diligence available on individual issues. we have seen big banks cutting back on fixed income currencies commodities, and the research roles there. you have an explosion of debt issuance. is there enough credit analysis available? >> probably. again, i don't think this is so much of an issue of making distinctions between different issuers. this is a sector wide phenomenon

and i don't think having more analysts on the job would have had much of an impact on what's going on, given the extreme and somewhat unp predicted selloff. alix: we are looking at refinancing. it looks like we just lost craig. that charlie had been looking at was taking a look at high yields. financing doesn't kick in until 7-10 years later. but right now they are capitalized relatively ok. 10 years out you have to worry about the refinancing issue. my question is, is it as bad as we see? scarlet: it is a lot of market sentiment. everyone is worried about cash flow, whether companies have cash. if they start conserving cash by cutting dividends, that has a knock on effect. it's a difficult move for a

company to do that because they sacrificed so much on the share price. alix: good point. thank you so much to craig, r university of houston professor, for joining us on commodities. scarlet: coming up, what you need to know for tomorrow's trading day, which kicks off the first of two days of fomc meetings. ♪

scarlet: i'm scarlet fu. "would you miss?" core inflation has been gradually drifting higher. it is under pressure because of the collapse in oil prices. alix: and check out the average

hourly weekly earnings were november year on year. for october they were revised up to 2.4%. that is where you could see some pressure to the upside. that is all for "what it you

" to: "with all due respect donald trump's lawyer, good luck. on our catch tonight, super pac seven that life crisis in the republican establishment copes with reality. but first, ted cruz's big breakthrough. a new poll out today. we will talk about the democratic numbers in the second, but on the republican side, it is all about ted cruz, who skyrocketed past donald trump in the first in the nation