from bloomberg has headquarters in new york, good afternoon. here is what we are watching this hour -- so much for the fed rally -- u.s. stocks falling for the first time in three days as investors turned their attention to weakness and commodities. beenad boy of pharma has arrested. now charged with securities fraud. -- barbie will be lonely at as disney's princesses find a home at hasbro. we have a look at the $500 million battle in the ball business. first, let's had to the markets desk where julie hyman has the latest. we have this selloff going on today and it has abated to some extent. major averages up off the lows but still seeing a significant selling across the board.

a little bit of it is a fed hangover as people try to figure out what happens. a lot of it has to do with commodities, which we will get to in a moment. the question in investors minds turned to what is the fed going to raise to how quickly are they going to continue? let's go into my bloomberg terminal and look at swaps. this is the historical curve going back to last september and here is what it looks like now and goingg around 1% all the way to 2% in three years time. a little more of an aggressive curve than what the fed itself has been signaling. still relatively gentle in terms of its trajectory of increases. an interesting move in the treasury market as yesterday, we saw moves higher and today, they are coming back down.

we are hearing from market participants that there's a lot of demand for treasuries as the curb -- curve looks to be relatively benign. bill gross coming out and saying we are not going to see any inflation here, so that would support the idea of yields coming down a little. the dollar continues to strengthen, so a little bit of a divergence. are sayingrategists the dollar will continue to strengthen versus the euro. david: what is the relation there? the dollar goes up, commodities go down. the bloomberg index tracked by this particular index is down about .5%, the sixth straight down day. commoditiesclining we are watching our crude oil biggold, both seeing

declines. gold futures at their lowest in five years. piece ofr is only one what is going on, particularly in the oil market where you still have oversupply. let's get a check on the bloomberg first word news with rendon greeley at the news desk. brendan: president obama traveled to meet with the members of the national terror counter -- counterterrorism group. president obama: our counterterrorism professionals do not have any specific and credible information about an attack on the homeland. brendan: the president is trying to reassure americans it's doing all it can to protect them. to law enforcement officials say charges are expected for the man who bought the rifles used in the san bernardino attacks. could come as cnet as

today. authorities say he legally purchased the high-powered guns used to kill 14 people at a holiday gathering on december 2. --nce's justice manager minister said more than 300 billion dollar euros may be used to compensate the victims and families of the terror attacks. 130 people were killed and hundreds were injured during the november attacks. bernie sanders is picking up the largest late -- largest labor endorsement of his campaign. communications workers of america will endorse the vermont senator. that's the largest vacations and media union and u.s., representing about 700,000 telecommunications and technology workers. you can get more on these and other stories at the new bloomberg.com. i'm brendan greeley. boy schkreli's bad , martin found a company that

uses a personal piggy bank. he was arrested this morning on fraud charges. indictment unsealed today, what did we learn about what it is a lead -- it is alleged he was said to have done? great ironyis the of this story. this has nothing to do with what he is famous for, which is jacking up the prices of life-saving drugs. you could call it i guess a web of lies and deceit. on acutors are alleging group of hedge funds he was running a couple of years ago, basically lying to investors as straight up security fraud. lying on things as simple as did they have an auditor? how much money did the hedge fund have? what were the returns? all of these things that there's a very clear line that if these are proven to be true is very

basic straight up fraud. david: this is a guy who has kept fairly busy. he's 32 and had to hedge funds going along with his ceo ship. keri: he ran these hedge funds and hedge funds went bust. it talks about how these hedge funds became insolvent and he , anothernother company biotech company that specializes in pharmaceuticals. what he did without the permission of the company, and it is important to note the company is not under investigation, he took shares in cash from that company and used it to pay off his aggrieved hedge fund investors. basically taking money from one pot to pay off debt in another they put a lawsuit together and sued him in august in manhattan federal court outlining several specific transactions where he took money

without permission. this in theave eastern district and the fcc releasing an indictment as well. sec releasing an indictment. keri: the sec case is interesting because, as it usually happens when you have fraud charges against a public company, some of them are public and some of them are private, you cannot be the ceo of a public company and have been convicted of securities fraud. that does change the dynamic and i think people are looking to see how that will shift some of the companies he is working with. how much is -- how much has his investment philosophy changed? he recently just bought into a publicly traded company. shares were down 50% last time i

checked on this news. a very small biotech company and they bought the rights to another life saving drugs for a parasitic condition common in central and south america. it is a strategy of a small pharmaceutical companies to buy up these drugs. i don't think it's going to change the outlook for the pharmaceutical industry which has very different challenges, but it is going to shine a light on this very small, strategic group of investors and companies that use this strategy that gets very negative public outcry. i have to ask about what he might face here. there could be some ill-gotten gains. this is a fabulous story and this is what made him into a household name because he bought

the sole copy of a wu-tang clan album that no one has heard. peopletaunted people or were taunting him on twitter saying he may listen to it or may not, it's a highly coveted piece of music. if the department of justice needs to go through an asset to pay investors back, that could be one of the assets they go after. so we will be keeping a close eye on that to see what happens. much. thank you very coming up in the next 20 minutes of bloomberg markets, it has been 20 hours since the fed rates, but the focus is now on weakness in commodities. the blackrock ceo does not agree with janet yellen positive assessment of the economy, saying u.s. will be lucky to grow 3%. we will have more on his interview. -- crude prices in mexico the company auctioning off all of its after a slow start this

year.

david: welcome back to bloomberg markets. it's time for the bloomberg business flash, a look at the biggest business stories in the news right now. the head of the international monetary fund is a feeling and misuseo stand trial for of the monetary fund. the imf board is expressing confidence in lagarde. she denies the wrongdoing. carson block is added again, betting against a french supermarket company. the company will sell assets to cut deficits by more than $2

billion next year. disney universal and seaworld says they are adding enhanced security, using metal detector screenings, randomly selecting guests for secondary screening. they did not say how long the measures would be in place. you can get more business news at bloomberg.com. let's head back to our markets desk where julie hyman has a look at companies with some double digit moves today. upie: pandora shares moving my 13% right now. they had jumped as much as 20%, so we are seeing a ruling that has said music streaming rates that pandora and other companies will have to pay at lower than the musicians were asking, though higher than pandora wanted. worse seemse been to be the read my investors and

that's why we see the shares taken a lift up today. in theoration going opposite direction, this is an oil shipping tanker company down 61% in a single day after the company's limited partnership affiliates cut their dividends. tk slashed its dividend prompting a number of analyst downgrades and prompting a selloff in the share. pier 1 imports seeing double digits declines the company citing a decline in what it calls casual in-store shoppers for the harm -- for the home furnishing chain. we see a decline in traffic at shopping malls which is affecting pier 1 and other retailers. 12%lly, winnebago down after that company's earnings missed estimates. a lot of double-digit movers to

choose from today. david: and her hour-long news conference at following the fed bosses toric decision, janet yellen voiced her optimism in the economy and suggesting inflation will move back to 2%. bill gross think she will be waiting a long time for that. anl: the fed is living in old age as opposed to a new age reflective of high leverage and reflective of globalization and factors in terms of demographics pushing down inflation and she refuses to technology it. david: let me start with your expectations going into this announcement. she did a good job. she had to thread that needle justifying the hike. how about the markets

expectations? guest: there has been some chatter that's the fomc projections of how many interest rates there will be an coming years, there was a feeling they would come down. instead, the forecasts show on average they are anticipating for increases next year. that was a surprise. guest: i think that will be hard to deliver. then thegradual and dots have not changed. the markets will be trying to figure out as we go into march with the process will look like. david: we're use apprised to see this was a unanimous decision? guest: i think she needed to get everyone on the same page to justify the hike. i'm sure there's a little horsetrading trading to get everyone to agree. will it be hard to keep the unanimity among the committee? guest: she probably does not

need it going forward. we have been getting used to dissent. but thatnke wanted it doesn't mean he got it. looking at the historical precedent it is unlikely that they could probably go back to one or two per meeting. the real surprise would be if a governor dissents. that has not happened in a while. you are right that we could see that going forward. david: what do you think the pacing will be? guest: i think it's harder to get to four. let's say they went in march and the markets say there are three more. do they not go in june? then the market says every other meeting so we should have two more? our feeling is the economy is not going to deliver and there is not the inflation she is

calling for. seems like a difficult ratetaking to assess these increases. how hard is that going to be to decide on these increases going forward? it's going to be tough because they have not hit their inflation target for years. if you look at their targets, they still don't get their for a couple of years and there are disinflation forces blowing in. david: let me ask you how this plays out here and what a concern it must be for janet yellen. guest: the diversions provides us with opportunities. we are seeing a lot of free money in europe. europe is earlier in their cycle than the u.s..

they are earlier in the cycle and don't have the exposure in commodity complex and higher credit crawl -- higher credit quality. looks to us like an opportunity. david: looking at rate cycles in the past, are they illustrative in this case or are these different circumstances and we have seen before? guest: the answer is yes. you are trying to split the atom here. peak of the federal funds rate has come down and people are talking around 3% this year. tough in thing that is the modern era is has there been such diversions? you talk about europe, but it's not just europe.

to takepan and you have china into the equation. globaland there is more connectivity now than there ever has been. one thing that will be a headwind for the fed's you have weakness in the emerging markets, you have weakness in the commodity complex and its going to be hard for those numbers when the fed has raised rates. much. thank you both very ahead, blackrock ceo, larry fink, speaks out in an exclusive interview with bloomberg. ♪

david: welcome back to bloomberg markets. now that the fed has raised interest rates, how will investors react? blackrock is

the world's largest money manager by far. erik schatzker sat down for an exclusive interview with larry fink this morning to talk about a wide range of things. you asked about the likelihood of a recession on the heels of that? people have said we are going to be in recession and the u.s. economy will be in recession and in rubenstein case, he said 18 months from now. clearly a recession outlook would not justify a 25 basis point rate hike by the fed or the clyde passing the fed laid out yesterday, which would take us to something like 1.25 on the fed funds target 12 months from now. so i asked larry fink what does he think the risk of a recession in this economy really is?

larry: the only chance of a real recession is if china's leaders miscalculate their needs and china slows down the more china, with their needs of reinforcing their economy, devalue their currency more rapidly than we all expect. that would cause more disinflation worldwide and cause a higher probability of some form of recession. volkswagen says it is naming can find berg to resolve the diesel claims. this is a guy with a lot of experience in circumstances like this. again, reports ken feinberg will work to resolve the claims over its diesel engines. you asked what he thought about what janet yellen announced yesterday and he praised what she did. and to answerult

the question you started with, it's probably not going to change a lot for blackrock. blackrock had anticipated a rate hike in june if not december and in a world ofbe the virgin monetary policy. so it does matter how fast and how far the fed goes. here is larry again on the outlook of fed funds. she will be quite slow in raising rates going forward. isview is the economy decelerating. it is not going to be as fast as we want. we will be lucky to see a 2% economy. so 2% growth is not anything to get excited about, but it's also not a recession. what: you also asked about we have seen in the high market. how concerned is he about that? erik: not concerned.

there's clearly a lot of trouble in the energy aspect. have solds producers high yielding bonds. they are in trouble and there will be a wave of defaults. and if you take out energy some retailers who they say are going to have some trouble, he thinks things are pretty stable. if you own individual securities, hold them until maturity and you'll probably get your money back. the whole can watch interview on bloomberg.com. coming up, the opening of mexico's oil industry is opening up. ♪ 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. david: from bloomberg headquarters in new york, this is bloomberg markets. returning to the movement broke just a few moments ago, ken

feinberg has been named to look into managing volkswagen's emission claims. he has a lot of experience with .ettling complex litigation most recently on the g.m. ignition switch done. ken feinberg the named to handle the ignition programs. western to brendan greeley at the news desk. president obama traveled to virginia to meet with officials from the national counterterrorism center today. he says the u.s. is in a new age of dealing with terror threats. 9/11, we obama: since have taken extra ordinary steps to strengthen our homeland security. our borders, ports and airports are -- our aviation security, including enhanced watch lists and screenings. we have gotten much better thanks in part to the people in largeoom, thus preventing complex attacks like nine/11. -- brendan: mr. obama

said there was no particular terrorist threat right now. secretary of state john kerry said in a letter to the foreign relations committee that iran is filling its obligations and has not engage in covert activities. arizona senator john mccain says the senate armed services committee will conduct a review of ash carter's e-mails to ensure no sensitive information was compromised following the revelation he used a personal e-mail account his first month on the job. he is a knowledge doing it and said it was a mistake. the judge in the freddie gray trial will meet with the lawyers of officer william porter after a mistrial reached after a jury could not decide whether he was guilty for blame. there were peaceful demonstrations after the decision. you can get more on these and other stories at the new bloomberg.com.

as commodity markets are closing in new york, let's look at some of the biggest movers today. gold heading for its a guest loss, falling about 2%. goldman sachs took the ax into its iron ore forecast, saying the price will remain under $40 a ton for the next three years. oil traded at its lowest level since february of 2009. 2% afterell as much as the decline. a six year low in crude prices is not dodging mexico's industry. previous sales were less lucrative, marking a disappointing try. i want to bring in adam williams. let me ask about the degree to which this was a surprise. : thank you for having me on. it was quite a surprise.

the expectations were relatively high, given that mexico set a low price for most of these fields. 100%he fact they sold given the crude price being as low as it is was quite surprising and as you can withne, mexico is pleased how the result turned out given the first two rounds of the shallow water auctions did not definitely so it is a positive step for the opening of mexico's oil market which has been a government run monopoly. it just opened up about a year ago. how has it gone thus far? now gone very well. the energy minister announced ofay that they have sold 69%

the auctioned fields. so you through three rounds that began in july, they have sold about 70% of the fields and next year will be the biggest round, the one that has the most intrigue, the deep water of the gulf of mexico. david: what do we know about who is bidding on these fields? adam: for the most part, these were smaller companies with not a large amount of reserves. most of these were local fields. there were some canadian companies, a few u.s. companies, but no large named international oil users. will be seen in the subsequent round next year. david: put this into some broader context.

projections for the effect on the effect of a larger mexican economy going forward? about theing deepwater rounds, they expect around $44 billion in investment over the life of these contracts. this is the primary law change. this will be a significant impact not only during his term opposed 2018. much. thank you very coming up in the next 20 minutes of bloomberg markets, it's the battle of the princesses worth half $1 billion. how hasbro snatched the lucrative disney doll business from mattel.

new chiefn apple plus operating officer and what it means for the world's most valuable company. and hoover is probably headed for an ipo but the senior vp for businesses don't hold your breath. is probably headed for an ipo. ♪

david: welcome back to bloomberg markets. time now for the bloomberg business flash -- a look at some of the biggest business news in this -- in the news right now.

three weeks after being arrested and connection to a corruption probe in a brazil, the former executive officer must remain at home until he finds a new job. a big deal in the cosmetics industry -- cerberus capital management is buying 80% of avon 's business and will take a 17% stake in avon. egglessany that makes mayonnaise says it can keep the products name. they will change the label to -- satisfyorers consumers. you can get more business days at bloomberg.com. stocks well off session lows but still firmly in the red following the best three-day rally since october. julie hyman has today's spider sector report. julie: let's start with oracle. the company coming out with numbers saying that their cloud-based revenue is up by

26%. loud revenue still a small proportion of the company's overall revenue. other parts of the company's business declined in terms of sales. to illustrate what i'm talking about, look at my bloomberg terminal here. service,software as a in other words, cloud here and infrastructure and service here. software have overall revenue. this serves to show is you are looking at cloud revenue at oracle, even though it is a quickly growing area, it represents a small portion of the business. are looking at accenture. the company's profit missing estimates but revenue up 10% in constant currency. company is seeing a benefit

as budgets are shifting to digital projects like cloud, but shares are down after profit numbers came in below estimates. we are seeing an increase in shares for micron technologies. morgan stanley raised the shares from overweight to equal weight -- to equal weight. the analysts are looking at fundamentals stabilizing by the second half of 2016. the sentiment in valuation could be near the bottom for micron. we have seen a rocky road for this chipmaker even though we have seen so my conductors perform well as we see a lot of consolidation in the industry. even as we see a mixed picture -- mixed picture for tech, the spider technology sector etf has performed quite well year to date. you're looking at an adjusted performance year to date for versus the sp y that

tracks the s&p 500. as we have had technology gain your today, the s&p is little changed. both making their record highs back in may, off 3% since then. whereas they are now trading 2% or so from its 15 year high, so closer to record levels. thank you so much. this is no fairytale for mattel. the company is taking a gamble turning to hasbro for their dolls hoping to make their princes and even bigger. battle isillion doll the cover of "bloomberg businessweek. that $500 million figure, i had to read it twice.

this is big business. princess isy actually disney's second-largest rant after mickey mouse. that may change after the new star wars movie. dolls are 500 million and mattel has been making them since the 90's and hasbro stole it away. i think of how dated many of these princesses are. they are not all from new movies. this was a concerted effort by disney to make them commodities, things that girls want to buy. disney is repositioning their princesses -- they can do "frozen."ems like they have to figure out how they are going to market them, so they are going to play up their individual personalities, and that's requires a new line. david: why did disney make the

decision to do that? the princesses are one branded when they have a movie, they have their own merchandise. intogets older, it rolls princesses. but frozen is huge. it was like $530 million in toys sold, which is crazy. so they decided to make a sequel which they will release in a few years and because of that, they are keeping it separate for the time being, but they tend to move the businesses together. so hasbro has princess and frozen. of a younghe father daughter, with this be in the child development phase? it is not a phase of development, but a lot of girls do seem taken in when they hit three or five, a lot of things are sparkly and pink.

i did it has been going on for a long time. david: talk about what happened here. mattel has had a hold on this for a long time and hasbro is able to get it away from them. was that mattel's? i talked to the ceo of mattel and he has admitted it -- admitted that it was their fault. barbie sales have declined since 2012 and so far, they have not turned around. on that. is focusing barbie is the best-selling doll of all time and still felt twice as much as disney princesses. paid less attention to disney and released their own line of princess themed dolls which disney did not like. i mentioned what this means for mattel -- it's a huge play for hasbro. getting this contract and now having to make something of it. doll: mattel has owned the

market for years and hasbro has stuck more to the boys side of things like g.i. joe and transformers. they turned transformers into a multibillion dollar business starting in 2007 with all of the michael bay movies. they have done the same thing with my little pony and that is all girls, so they have been growing their girls side, which is what attracted disney in the first place. you can read the cover story on newsstands right now. coming up, apple appoints a new ceo -- coo. we will tell you who is filling the shoes of the job once held by tim cook. ♪

david: welcome back to bloomberg markets. just three days after apple got hit by a trifecta of cuts, the

company announced an executive reshuffling. jeff williams, who has been in charge of apple's supplied -- supply chain is now stepping into the role of coo, a position once held by tim cook. joining us to talk about this is anchor,omberg west" emily chang. justw he has a duke mba like tim cook and has been with the company for a long time. expected news here? he hasas been -- emily: been running the supply chain for the last five years and has been referred to as tim cook's tim cook. tim cook saying we are just formalizing jobs are already doing. he is the coo and now we are making it official. and we did anbm interview with him last year where he talks about how he came to apple.

steve had just come back and tim called to come out and interview and stop by as a courtesy. i had no interest in joining apple. they just lost a billion dollars and now here i am. it's interesting because it reminds me about what tim cook said about joining apple where steve called him and he had no interest in joining but somehow was convinced and obviously he is still there. some other interesting executive of aes -- a promotion guide to the head of hardware -- he has overseen the development of the apple designed chip that is in the iphone and ipad. apple outsources the manufacturing, but they are trying to design more chips in-house. part of like the chip the company is being elevated. why does apple want to do

all of that in-house? apple wants to control the experience from and to end. as you have pointed out, it says designed in cupertino. they don't want to rely on what the latest chips are from other suppliers. they want to create their own chips themselves and integrated into the product the way they would like to. that is something that has been driven by jonny i've. david: one other move -- phil shiller's role will be expanded as well. be running the app store. a seasoned executive getting additional responsibilities. this goes to show the app store is something that is incredibly important to apple. it's interesting you mention the three notes coming from wall street firms, one suggesting iphone sales might decline for

the first time ever next year and another lowering the price target and another pointing out potential weakness in the supply chain. it is going to be an important year for apple. they have been writing the sales of iphones, the watch has penetrated smaller audiences but is not the tremendous hit apple hoped it would be. it will be an interesting critical year for apple and it will be interesting to see them making these changes now. sure you catch emily chang's interview tonight with the executive producer from homeland. that tonight at 6:00 eastern right here on bloomberg television. uber isalien dollars, one of the biggest unicorns out there, but the company says it may not be ready to go public at.

guest: when we are ready to go, we will go, but to go just to go is a negative sign. we are motivated to drive the value of this company and we will do it for as long as it takes. when we are ready to go, we will go. what i am wondering is how much truth there is to that? is the company not ready to go or is that company not where we would like to see it? alex: maybe a little of both. they also have dynamic funding while they can bring in money while still private that you only saw in ipo's. when you look at the company itself, they are still building out their regular rideshare capabilities and venturing into things like delivering packages and a certain cities. it seems like they are still trying to figure out what's next. and you also have this legal and regulatory overhang of some of

the issues they run into, whether it is how their drivers are classified or different areas and countries not wanting them to get in. big investor a talking about uber this morning addressing the inevitability of an ipo. the only way these unicorns are going to get exits is going to have to be through ubero market or who buys when the last private round is $6 million, which same price as dow and dupont? have talkednd i about how disappointing the ipo market has been. what is going to turn that around? alex: we've seen a cooling off of sentiment in private rounds. that could push some of these companies to look to public markets like was traditionally done. who get intors

these private companies, their money is locked up. when you hit a certain time horizon -- when you are hitting 10 years, these investors might be saying we want liquidity. he said today we are five and a half years old. we don't need that yet. they have investors getting into the 10 billion and funding who are long-term investors, so it does not seem like anyone is hankering for their exit yet. be one of thet catalysts when the investors come in and say you had our money for this long and now it's time to give us a reward for taking a risk on you. david: just looking at how that valuation has grown, it is pretty astonishing. what isim at his word, it looking toward? this is a sizable company with a footprint that is global.

arementioned they encountering trouble but what more does it have to prove? alex: it has to get into asia. that's a market needs to get over and, the headwinds from these issues around how employees are classified. that is going to be really important. right now, drivers are independent contractors. if they get reclassified as employees, it will be expensive and could be a big problems -- a big problem. david: coming up in the next hour, we will talk about what is next for the fed. ♪

betty: welcome to bloomberg markets.

from bloomberg world headquarters, good afternoon. i am betty liu. stocks are giving up some of their gains after yesterday's fed rally. the battle over board compensation -- pharmaceutical companies in particular shell out huge blocks. can directors still serve the ?cashing of shareholders in on " star wars -- can disney use the revenue to offset declining revenue? i want to head to the markets for julie hyman has the latest. we seem to be bouncing around on the lows. yes, bouncing off a little bit, but still down on the day. back to the lows of the session