from bloomberg world headquarters in new york, good morning, i am betty liu. it is the end of the week. fed effect is fading fast. are fallen, bonds are rising, oil hitting a seven-year low. the democrats saturday night fight. can they use the debate tomorrow to cut into hillary clinton's substantial lead? it was a box office smash. you know the movie we are talking about. it looks like star wars is living up to the hype. we are a half hour into the trading session. i want to head to the markets desk where julie hyman has the latest. ticket sales are up, stocks are down. julie: people are liquidating stocks in order to buy star wars

tickets. we are seeing stocks selloff for the second day. it is a similar story to yesterday, commodities are helping drive declines. as we move past the first interest rate increase by the fed, investors are now refocusing on the rising dollar. we are seeing selling continue in crude oil, although it has abated a bit as we are down only .1%. the euro turning around against the dollar as well. we will see it stocks change direction as well. judging from the board that we looked at, it's not happening at the moment. betty: that temporary rate in the fed -- lived in the fed rate, it is causing something of a santa claus rally.

julie: it could, but we are not setting up well into it. this is the seasonal variation in the s&p 500. lows ofres it with the the five and 10-year. this shows the return thus far for this december, a loss of 2.5%. if you look at the five-year average, you have a gain of 2%. over the longer term, december is a stronger month. going back to what i was saying about commodities driving trading, take a look at this chart. this is the correlation between oil and s&p 500 going back one year. it reached a peak in november but it is still close to that level. we have seen oil and stocks, not 1:1 correlation, but moving

more and correlation. we will see if the santa claus rally happens. time to buyill have our gifts and for the stocks as well. thank you. let's check in on the first word news with the vonnie quinn. vonnie: thank you and good morning to u.s. diplomats are talking with all the role hours in new york about how to end the syrian civil war. they are debating a plane for political transition. it does not mention a removal of bashar al-assad. rights --o bought the rifles in the san bernardino attack is accused of helping terrorists. atique marquez is being held the moment until his hearing on monday. he purchased the rifles that were used in the san bernardino attack. president obama holds his end of the year news conference today.

to reporters before leaving to his annual vacation in hawaii. along the way, he will stop in san bernardino, california to meet with the families of the victims in that attack. you can watch the news conference at 1:00 eastern time. the house has passed a $1.4 trillion spending deal to fund government through september. this also ends the ban on oil exports. senators are expected to vote on the measure in combination with a year and tax plan which would give tax breaks to working families and business interests. the president has promised to sign the note. donald haslson says incredible support among the republican base, but he is not ready to sign on yet. the longtime republican supporter, when asked who he is supporting said this. >> the adelson family have not

made up our mind who to support. we may wait until a number of the primaries are established, and who is garnering the largest number of delegates. donated $100ys he million to republican candidates in 2012. you can get more news 24 hours a day at the new bloomberg.com. now let's get back to how the markets are reacting to the fence decision to raise its interest rate. the s&p is lower for a second day in a row following that announcement. gains are being taken out this week. oil is dropping to the lowest level in six years as the u.s. supply glut continues to increase. the u.s. dollar rising to the highest level against the canadian dollar since 2004. as you might expect, we have a

team of experts covering this story. on the equity side, we have mike regan. currencies, vincent cigna roll up. our commodities expert, vincent piazzolla. we really do have team coverage here. if i were to put this in one sentence, what you two talk about is affecting what you do. >> that's right. even equity investors are more interested in what the currency and oil guys have to say, because that is the signal that the stock market is playing off of now. fed, it lookse like now rally in the dollar may have faded, more so because of mario draghi. now we have more strength coming in for the fed, lower oil prices. with oil plumbing new lows, it

gets back into the psyche that the high-yield market is in focus. betty: energy is a third of that. >> dependent on what index you are looking at. saunders told us she wasthis year, saying that the market is running to stand still. the s&p has had some volatile ups and downs, but gravitating back to the unchanged level, slightly lower. a lot of people expect next year to be flat as well. fundamentally, that seems to be what it is. valuations have peaked and nobody is pushing them higher until we have some improvement in oil or a crack in the dollar rally. have: these strategists all either taken down there the leastor are bullish they have been in a long time. vincent, on oil, it is plumbing

new lows. that saideport out our supply is now at the highest its 1930. what do we watch for next? is persistente winery imbalances. that is a function of the resiliency of the u.s. enp production cadence. we are heading toward the close of the year. we will be above reduction levels, above the peak in june 2014. betty: how is that possible? >> operators are becoming more efficient, coming down the cost curve much more quickly than has been appreciated, gaining efficiencies, zeroing in on the highest quality inventory which generates the most prolific output at the greatest returns. this is something that could change in 2016 as two things happen. to 2015.ing relative

also, what remains to be seen, how debt markets react to the energy sector. has been the lifeblood of the industry throughout the last couple of years. that needs to continue, those capital markets must be open. and it has been this year, just a matter of whether it gets worse in the high-yield market. >> we need to see those activity cadences in 2016. trends are likely down versus 2015 to the tune of 20%. that should reduce the output but not enough to quickly tighten the imbalances, especially in early 2016, given the seasonality. vincent, sometimes it is more of a local story with currencies. overnight, we had the bank of japan -- traders got spooked. at first they thought they would

be doing more stimulus but there wasn't. what is happening there? have it a the markets little offkilter. they have not really added more stimulus, they have extended it a bit, kind of what mario draghi did. in the long run, i don't think it is very good. when you see central banks stepping into the market, investing into real estate investment trusts, buying of bonds, as a positive in the long run. we look at their balance sheet, the bank of japan is a ridiculous amount of money on their balance sheet. how does this affect the dollar? >> what you have to realize is we are not yet trimming the fed's balance sheet. we are still investing maturities. the fed funds rate is still trading at what it was last

week, .15. it has been moved up yet. the fed has yet to do reverse purchases, take money out of the system in the near term, to drive the rate higher. until they drain liquidity out of the system, the system is still awash in cash. betty: so still a lot of easy money. sector,not for the oil but for the rest of the economy. betty: does that make a difference for equity investors? >> it should keep me by back boom going in place. that will be one of the more significant positives. and the m&a boom. owth, thengs gr estimate from earnings companies, 7% growth next year. energy being flat. the problem is, that is within the margin of error. this far out, that is what we were looking at for this year and now we have flat earnings.

not a big enough forecast to be confident that there will be strong earnings growth, so what do you have left? vivax, dividends, and she money helps with that. betty: mike, thank you. ourcurrency expert, and energy analyst, thank you. hour, up in the next half an unexpected problem with these driverless cars we are talking about, people. we look at the glitch that is causing havoc. and the democratic debate is tomorrow. will hillary clinton be able to stand out when nobody is watching? how the saturday night debate may produce some low viewership. ♪

good morning and welcome back to bloomberg markets. it is time for a look at some of the biggest business stories. chrysler is recalling 56,000 jeep cherokee suvs worldwide. the automaker needs to fix a water leak that could cause an electrical short in the power tailgate. it affects the jeep cherokees from the 2015 to 2016 model years. the computer company must pay $100 million that to customers. lifelock made claims about his identity that protection but failed to protect consumer information. the federal trade commission said it is the largest settlement it has one in this type of case. david robinson is one of the investors in a company known as

the price line of tickets. group hasl capital invested $5,000 in score big. they sell unused tickets to concerts and games at a big discount. you can always get more business news at bloomberg.com. the roads,problem on and it is not self driving cars. it turns out human beings are the problem, and they are slamming into driverless cars at twice the rate of regular cars. i want to bring in keith not in. his story is one of the most read on the terminal. he is with us from detroit. what exactly is the problem, what have they found, that these cars are involved in more accidents than those driven by .eople keith: that's right. driverless cars follow the law, which all of the scene do not do.

they drive the speed limit, and many people are driving into the back of them. on the new jersey turnpike, that would be an interesting case study. does that mean that researchers now have to think about factoring in breaking the law in these driverless cars? debate.hat is the should they make the cars behave more human, which is breaking the law to keep up with the rest of us scofflaws on the highway? it is a tough debate because once you let them break the rules a little bit, how far do you go? betty: what exactly is happening? let's say with the google driverless car, what are they finding? keith: for example, there was a cool car pulled over by a police officer going 24 in a 35, traffic backing up behind it. , they createations

cautiously around a corner, they may stop to give a second look in her hit from behind. all of these crashes are the fault of the human drivers. they tend to be slow speed and no injury crashes. betty: this sounds like a pretty big problem before you have mass adoption. if the researchers are going to factor in, essentially breaking the law, how far away are we from that? keith: google is talking about splitting off its driverless car unit into a standalone business. they one hire cars on the road before too long. california regulators came up with some strict rules on how driverless car should be a, that there should always be a human ready to take over the wheel. i think there is a lot to be worked out. betty: can it ever be? keith: we have some very smart programmers. they have already made the cars behave a little humanlike at stop signs, when there is a

four-way stop, the car will creep forward a little bit to let them know i am going. a little bit of that going on but much more needs to be done. betty: does this put the momentum toward driverless cars and at any momentum at all? keith: i think we're heading into the age of robot cars. nothing seems to be slumming that down. regulation, technology, everything is moving forward. the promise is they will reduce accidents and the 33,000 fatalities on american roads every year. that promise is so great, i don't think anyone will slow them down. betty: i wonder if this will be a boom for the insurance industry. although these are minor accidents. thank you so much, great to see you. ughton in detroit. blackberry's latest quarterly results beat expectations. is this an indication that the company's turnaround efforts and

software are working? we will speak to john chen, the ceo of blackberry. ♪

to bloomberge back markets. stocks are selling off for a second consecutive day. senior markets correspondent julie hyman is taking a closer look at the etf market. etf's are more broadly used by institutions and retail investors, but when the come down to breaking it down by generations, millennials are using them the most. millennials and etf may be a match made in heaven, here is eric balchunas. how do we know that millennials are using them more, and why are they using the more? >> we don't know who owns etf's.

besides the 13f filings a big institutions, nobody knows. we have many surveys and studies and they point to the same thing. millennials are using them more and and more concentration than other generations. the reason they like etf's, they are cost-conscious. etf's are cheap. they like the transparency, the tax efficiency. they also distrust wall street. only 12% of millennials think wall street will do the right thing. when they look at etf's, they see a way to keep wall street hands off of their money. nilturnover inside etf is because they are passively managed. another issue is they don't like talking on the phone. they don't want to talk to their broker. robo advisors are now out. millennials love them. advisors use etf's when

they make their allocations. julie: what is the percentage breakdown by generation? 40% of millennials in their survey reports using etf's. 20% is gen x. 10% are boomers. then another schwab study looked at, what percentage of your portfolio is etf's? millennials, 40, 50%, gen x, 20, boomers not that much. alie: i imagine it is also function of when etf's came into prominence, at the same time that these folks were reaching financial maturity. marketing wise, that is probably what they were more exposed to. >> that's a great point. the idea that etf's into the digital culture so well. you can access and deal with them easily through your phone. julie: we know they are buying etf's, but which?

that is probably difficult to tell. one study looked at it and they tend to like vanguard. they also, interestingly, like reits over gold. they like the vanguard reit etf over gld. millennials also like emerging-market that have heavy because they have a higher risk tolerance, as they are younger. julie: finally, you wrote a companion piece that you can and thatloomberg.com now talks about etf that are being made to cater to millennials. >> absolutely. the largest generation in history. they are about to inherit $30 trillion. uts are marketing -- etf's are being marketed to them.

like will invest in stocks e-commerce, sharing economy stocks, all kinds of things they are into. this is a way to appeal to them on it than that basis. they also had one for boomers call the aging population etf, which will probably be heavy health care. julie: eric balchunas, thank you. betty: still ahead, with donald trump grounded out the republicans and even some of the democrats, how will hillary clinton and her opponents get people to watch when they hit the debate stage this weekend? ♪

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a lot happening this morning.

you're watching bloomberg television, i'm betty liu. let's start with the news, vonnie quinn has more from the news desk. military sources are reporting victory over islamic in the air and on the ground in iraq. the defense minister says major damage near ramadi. troops surrounded the city earlier this week. kurdish forces say they killed more than 200 militants in a counterattack near mosul. international organization for migration says refugee by sea and land are expected to top one million next week. must come from africa or the middle east and from turkey to greece. more than half are syrians. more protests planned in chicago as a white officer charged with shooting a black teenager 16 times is due in court. officer jason van dyke is facing six counts of first-degree murder. he was charged just hours before laquanf him shooting

mcdonald was released. at least 26,000 people died this year and earthquakes and other disasters, more than twice the debt toll of the year before. all of this according to the insurance company. to $32 from $35 million million. mother teresa could officially become a saint in september. that is after pope francis approved the second miracle of the late missionary to india's poor. the nobel peace prize winner died nearly 20 years ago. it is unclear if the pontiff will travel to india to perform the canonization ceremony. these othermore breaking stories 24 hours a day at the new bloomberg.com. betty: thank you. the stage is set for the third and final democratic debate for 2015. so much focus on the republicans and donald trump. can the democratic candidates reach a bigger audience? i want to bring in bureau chief

megan murphy. the big challenge, it seems like in this debate, not so much between the candidates but can they get anyone to watch this debate in the first place, right? >> absolutely. this has been a big issue and a lot of criticism of the democratic national committee for doing these debates this way on a saturday night, especially right before the christmas week. we certainly don't expect stellar turnout numbers. part of this is some criticism has been that they want to prop up hillary clinton as a candidate, that they don't want her to have too much exposure, that having quieter debate on saturday night give certain advantage and that may be part of the strategy is a look for the general election. there's no question the biggest issue for democrats is they don't have donald trump on the stage. the man who is proving to draw in record viewers another channels in the republican debates. betty: has the strategy been working in favor of hillary clinton? >> i think there is no question that one of the biggest people who benefited from the rise of donald trump has been hillary

clinton. when is the last time you saw an article about her e-mail issues at the state department? when is the last time you saw how her campaign is doing? at the end of the day, hillary clinton is a polished -- gave a stronger polished performance. bernie sanders also did quite well. i think we're looking at a scenario and less she has a major stumble on the debate stage, unless something happens that's totally up in these scales, she is looking increasingly like a safer and safer candidate. betty: i believe she has a pretty comfortable double-digit, even 20 percentage point lead in some of these polls over bernie sanders. there has got to be a lot of -- andt of navelgazing retrospective looks at what they could've done better among o'malley and sanders team as well. what happens now? >> i think her campaign has matured as the race is going on in the sense of they quickly

realized they needed to contain sort of the noise around her, the issue over the e-mails, sort of dragging her past history. what they're really focused on doing is branding her as the candidate of the future. that is not easy when you're talking about someone who is been in the public eye not just -- for more than a decade now and a variety of different roles. one of the things i think they're focused on now is, how do we translate this enthusiasm to a broader segment of the electorate as a look for the general? how do we bridge over a message that resonates with younger voters, with voters who are not women, and how do you brand her as the candidate of freshness and newness, specially when coming off an obama administration where he really claimed that mantle for his own as well? there is some serious challenges ahead. nothing is ever over with the clintons. nothing is ever over in terms of what people are likely to dig into in terms of their foundation, the money track record in terms of accepting large donations from others. so i think there are still other

shoes to drop, but there's no question that over the past month or two, the campaign has performed very well. betty: what about sanders and the firing of the senior campaign official over accessing clinton's data? what is going on with this? >> a very strange story today. this is something that marred what have been some of his best days terms of winning endorsements. as the story emerged overnight that his campaign staffer has been fired for improperly accessing clinton's voter information in the dnc database, they're blaming it on the software patch issue. i think all of the details of the story are yet to come out. but it is going to cause some problems. it is an unexpected hiccup at the worst possible moment when you're trying to build momentum going into the debate tomorrow night for a candidate that has sort of fallen off the radar a bit, again, due to the rise of donald trump and all of the airtime focus on the republican side. betty: it seems like more and

more -- i was at a party last that were people were shaking her head's in the incredible stamina of donald trump and how it looked like he may actually be the nominee here for the republicans. what are people saying between a hillary clinton and donald trump race? >> i want to be really clear because i think this is such an important issue, that he is really talking about things that are resonating with a much bigger segment of the electorate than i think people realize. i go to the same parties & discussions with people, and they shake their heads and they say, can this really happen? i think the thing that everyone needs to realize is this is a real possibility. we're talking about a front runner who is in many pulse delay double-digit lead. yet a 40 point lead last week. points -- it was 40 points. i think what we are facing is, is the media also going to grapple with what he is talking about in terms of real concerns among mostly white working-class

voters in this country, voters who have seen their wages stagnate for decades, who feel immigration is a threat, who look at the extract of extreme islamic terrorism and what we're doing to combat it not just nationally, but internationally? and the image that america's feel has been missing under the obama administration, is really becoming a narrative of this election that i think people did not expect. and i do think the clinton campaign will really be looking at that and looking at whatever of issues are we going to need to address to pull in this segment of the population that actually, for many years, had voted solidly democratic. over the past four decades, has started to drift right. betty: thank you, megan murphy, bloomberg washington bureau chief. a programming note, the president will beholding his end of the year news conference today. he will talk to reporters before leaving for is a no vacation in hawaii. you can watch a news conference

right here on bloomberg tv anchored by bloomberg politics at 1:50 pm eastern time. much more ahead on bloomberg markets. blackberry beats the street. we will get the comment is crucial to a quarter had into 2016 and the new apple coo doesn't fall far from the tree, how jeff williams is following and tim cook's footsteps. "star wars" is a smash already. we will look at the moneymaking force behind it and much more. ♪

betty: welcome back, this is "bloomberg markets." a look at some of the business

stores in the news reinaud, puerto rico reaching a tentative agreement to restructure utilities $8.2 billion debt according to two people with knowledge of the matter. it will provide an equity component that will offer about $450 million in the event of default. it would be the second-largest restructuring and a $3.7 trillion bin is full bond market and potentially avert a default on one hundred $96 million of interest due january 1. but because largest construction company may set off the country's largest bond default in two decades. won't pay $31 million in interest on bonds due in 2024. the company is working on a cost-cutting in restructuring plan. ica has been hammered by mexican cutbacks and infrastructure spending. about 100 people will lose their equity morgan stanley trading unit. the bank will cut as much as 5% of its stocks traders and sales people as part of an animal

performance-based cut. morgan stanley will replace them over the course of the year. you can always get more business news at bloomberg.com. i want to head over to europe. caroline hyde, we are following what you guys started hours earlier, which is you guys are pretty much in the red as well as we end the week. caroline: the hangover after the hike, seeing stock risk aversion selloff, just a sea of red as we enter the last few hours of trading. down by one point 8%. it is interesting who is falling and rising. one area of green, the miners. of some 6%. looking at france, they are driving higher. there are some rays of green as we see a little pitch up in m etal prices. overall, a downward day.

digging into the industry groups. pictures say a thousand words. declining this afternoon. clearly, telecoms in particular, the worst performance. dig a little deeper, 2.5% lower than fixed line. everyone is falling. this is an interesting 1, 1 of the key stocks, it has a u.s. angle, down 5.8%. your u.s.snapping up assets, buying up cablevision. the problem with cablevision is this deal could be delayed. the justice department asking the regulators, the fcc, to consider the bed -- bid later. really weighing on the stocks this morning and this afternoon, so clearly, on a downward trajectory. money going into the havens, going into u.k. debt, borrowing costs coming down similar to

france, similar to germany. four basis points lower. betty: thank you, caroline hyde. i will see you in just a little bit. we are making some fresh lows in stocks, the dow is down about 227 points. as caroline said, it is the fed trading as we en the with. i went to go to the news desk. d i want to go to the news esk. >> we are about flat on the week. today's trading action has taken the composite index back below its 200 day moving average and back below the psychologically important level of 5000. sometimes in the past, that doesn't support his lead led to more downside volatility. it will be interesting to see what happens. surgingry shares are this morning after the company beat fiscal third-quarter estimates. this company may be staging a

turnaround of sorts. they posted a loss of three cents versus the expected loss of $.14. bearish,t was mainly 92% of analysts have a hold or sell rating. but one rates blackberry went a speculative buy with $11 price target. morningail me this after the copies conference call and said the third-quarter results are consistent with our view the company issuing execution on a steady transition towards software were valuations are higher. basically, making the case for the stock to go higher. betty? betty: thank you, abigail. live at the nasdaq. let's stay on blackberry and get more and ellis this as you just mentioned, those shares are up on the back of this earnings report. up almost 11%. cory johnson has more on this.

it looks like john chen's turnaround is working? >> the soft results have been meaningful it important to this company. they have done a lot of acquisitions. they are grown both organically and by buying things. we can't tell exactly how much, but it looks like it is growing. the rest of the company shrinking and doing so dramatically. share are 30% lower euro for your. betty: for what? >> everything. overall, sales declined about 30%. that is not haircut. that is a haircut, shoulder cut, down to the waist. betty: a body part cut. >> is scarcely smaller company. -- it is searsl the smaller company. it is a big deal. betty: what are they doing in software? >> fundamentally, mobility and security.

those of been the hallmarks of blackberry. but they realized the hardware business, the handset business, but also the hardware in the back in. that was the real undoing of blackberry when microsoft exchange figured out a way to put the security that blackberry was -- blackberry's 2 -- you have to buy one of our boxes and have our machines and everyone's hand. was they no longer have the box, the security comedian work, up the world for all kinds of mobile devices and innovations. that was a deathknell for blackberry. trying to rearchitect the company around the core ideas of security mobility but from a software side. betty: there was speculation when john first came on, wasn't there, could they be sold? is are some sort of exit for blackberry? is that still out there? >> i don't think the core asset has that much value in the decline of the stock price, the sales of the business. it is intriguing to watch the software business grow. the percentage of revenues more

foreign but only because the rest of the company is falling on hiits face. betty: we're staying on blackberry because the earnings, as we mentioned, have come out at 11:00 a.m. we will be joined by the ceo john chen. withe meantime, staying phone makers, let's talk about apple. three days after apple got hit by trifecta cuts for major wall street firms, announced an executive reshuffling yesterday. we heard jeff leaves had been in charge -- williams who is now charge of apple supply chain since 2012, and he was, he is now subbing for the role of chief operating officer. i can't seem to get my words out. , explain to us what is going on with apple. matt: i'm going to let the bloomberg terminal -- betty: speak for itself and i'm going to step away. matt: he was in charge of the supply chain at apple. hey, let me put supply chain and for apple, stlc, you can see a whole bunch of stuff.

it shows you a number of interesting things. the first thing i did, you can , theby the suppliers here customers here, and the competitors here, you can show inventory growth, sales growth. i put price change of the stocks for one day because i thought, oh, the supply chain guy, now the coo, how does that affect the prices? markets around the world were down yesterday. they are down today. it doesn't really show much because they are all down. i put in the three months percentage change to see how their suppliers have been doing over the past three months. interesting you see a breakdown of winners and losers. this also gives you other information. one gets half of its revenue from apple. we see that here. it is down over the last three months. simpson electronics, gets less than 5% of its revenue from apple, was up over the last three months. those are some of the winners and losers. as far as the customers come

also interesting. at&t and verizon, each get about 5% of revenue from apple, up over the last three months. 2.2% fromgets about apple, it is down over the last three months. splc, younal function can put it in for any company, gives you so much information about the business and enables a deeper dive into that stock. betty: that is very, very cool. thank you. matt: anytime you ask, i will be here. betty: you should do battle of the charts. matt miller, thank you so much. corey, thank you as well. cory johnson. much more ahead on bloomberg markets. we will be right back. ♪

betty: this is promising to be this year's biggest movie, now open worldwide, "star wars: the

force awakens" debuted at u.s.ght last night in theaters. in also expect the film will be one of the highest grossing ever could take than $2.3 billion in global box office sales will stop the size box office, what does star wars mean as far as a moneymaker for disney? let's get more perspective with chris who covers entertainment bloombergr life from l.a. break down the numbers of the amount of money people will make off of go star wars." >> somewhere north of $2 billion. based on that, if you add in home entertainment and tv licensing and things like that, could add another $1 billion just to the film studio. people are predicting $1 billion profit for disney just on that. in terms of consumer products, numbers i've seen, $5 billion, $6 billion with all of the apparel and toys and everything that disney licenses.

huge moneymaker. betty: what are people saying about the box office ticket sales just for this weekend alone and can we extrapolate from that and then say, yeah, they will hit that $2 billion mark? >> the predictions are they will top the record for the opening weekend set by "jurassic world" set in june, $208 million. and that it could top "avatar" total, around $709 domestic and $2.8 million internationally worldwide. $2.8 billion internationally worldwide. the numbers on wednesday night were not -- they broke records, but were not overwhelmingly fantastic step disney stock is down big time today. there was a lot of anticipation and we will see -- we will get new numbers in about a half hour on thursday night. betty: so we will get a further glance. you mentioned disney could make up to $1 billion in profit.

would this be the most profitable movie out of disney if it does get that? >> yeah, and not only that, but disney has five more of these "star wars" films two. this will be a franchise, you know, as big as anything disney has had. we're talking about years and years of profits off of this. betty: chris, you mentioned the other parts. the products, you know, all of know,her tail end, you like revenue streams from this movie. who is going to be winning from this "star wars" movie? what other retailers and products will be popular? movie theaters. their hope is people will get more excited about the moviemaking experience and will be selling t-shirts and things like that at the theaters that they don't normally do. you will have a lot more people coming to the movies.

you will see a lot more trailers for future films. imax has a record number at their theaters showing the films. bigilers have taken some bets, target, for example, wants to be the destination for "star wars" products. a lot of urgent eyes. retailers at theaters and toymakers. betty: yes or no, you saw the movie? know, the movie had so much hype. it over delivers. it has something for everyone. old members, new ones. a lot of people will like this film. betty: can't wait. chris, thank you. you can listen to bloomberg radio around the world. stay with us. ♪

betty: 11:00 a.m. and new york, for a clock p.m. in london and midnight in hong kong. welcome to "bloomberg market."

here in new york, good morning, i'm betty liu. what we're watching, back to reality it seems, the fed effect fading. we're going to look at where markets may go next and a showdown with moscow, ukraine defaults on a $3 billion debt payment to russia. we will be asking ukraine finance minister what is next. blackberry on track. these are phone makers to losing money, but bringing in more revenue from software. we will talk to the blackberry ceo john chen a little bit later this hour. into theout 90 minutes trading session. i want to head to the market desk were julie hyman has the latest. since we last spoke, julie, we have been hitting some new session lows. julie: one of the caveats want people to be aware of, the so-called quadruple witching, the expiration of futures and

options, s&p 500 does quarterly rebalancing today of its indices, which means you can see some repositioning on the part of portfolio managers. all of that means we could see increase volatility today, particularly open and close, and increased by him, particularly at the open and close. just something to keep in mind as we see the swings that betty was referring to was stocks pushing toward the lows of the session. that is one of the things that is the backdrop. another thing that is the backdrop, the underperformance we've seen all month. i pointed this out last hour. i want to look again on my bloomberg terminal as the seasonal function that shows us how december has been -- here is 2015. you can see the s&p is on track for a loss of 2.7% for the month. if you look over past this summers in the last five years, here are the averages. last fivers in the years, here are the averages. this is unusual, could still see

an uptick the last couple of weeks of the year, but we do not tend to see decembers this negative. we will see if that continues, betty, the underperformance we have already seen. betty: you can't blame energy and materials this time. julie: not today. you can for the month, but not today. crude oil had been putting some pressure on stocks, but that is not actually what we're seeing at this point in time. crude oil has turned a little higher, sing a little bit of a recovery. natural gas as well has been recovering. that is because even though the weather has been unseasonably warm, the forecast is finally for things in the northeast in particular to turn a little bit colder. that appears to be helping natural gas. if you look at my bloomberg terminal, materials and energy, which were really hit hard yesterday, not doing very poorly today. utilities are the worst-performing group in the s&p 500 followed by consumer staples, financials also under pressure for the second day in a row and consumer discretionary

stocks all down more than 1%. i want to check on rates two days after the federal reserve raised interest rates. what are we seeing with currencies and in the bond market? if you look today, we are seeing a little bit of a decrease in yields, interestingly. we have yields rise in the wake of the interest rate increase and then falling for the past couple of days. we are seeing the dollar come off after a lot of buying that we had seen. we have seen the dollar fall versus the japanese yen as we saw in japan a bit of an expansion of assets of purchases that had been in effect there. currency market a little bit different trend than what one would imagine in a rising rate environment. betty: julie, thank you, julie hyman at the markets desk. let's check in on the news. courtney: started in washington. congress is on the verge of entering fiscal peace through

washington through most of next year. the house has a $1.1 trillion spending measure that avert a government shutdown. it lists the 40-year-old ban on crude oil export and revives dozens of expired tax breaks. the senate is expected to vote later today. this spending and tax bills are likely to be one of the big topics that president obama gives that is in of the year news conference, talking to reporters before leaving for his annual vacation in hawaii. along the way, he will stop in san bernardino, california, to meet with the families of the victims of the terrorist attack. you can watch the president's news conference right here on bloomberg tv at one: 50 pm eastern time. at least 26,000 people died this year and earthquakes, floods, and other disasters. that was more than twice the death toll of the year before. all of this according to reinsurance firm. the firm says insured losses billion to $3235 billion. for the second time in two weeks, beijing has issued a smog

alert. the forecast calling for hazardous smog through december 22, just hours after beijing city official told bloomberg smog alerts won't go away anytime soon. mother teresa is on the path to sainthood, less than two decades after her death. the vatican said today pope francis has credited her with a second miracle, a requirement the romanood in catholic church. mother teresa won a nobel prize for her work caring for the poor. our first wordat news. you can get more on these and other breaking stories 24 hours a day at the new bloomberg.com. betty: thank you. wrap up the week, the big focus in europe is on the great of urgent between the fed -- divergent. joining us from london, simon french, the chief economist. gordon also with us with the u.s. perspective, bloomberg intelligence economist carl.

carl, you're not just about america, you are a worldly man. >> u.s. economist have to be increasingly focused on world developments. betty: i love that you put together the winners and losers in this. let's go liberty global. you say some of the winners in this fed rate hike are other central banks. why? >> look at central banks that are trying to maybe not overtly saying they are devaluing their currency, but trying to stimulate their economy in a way that may just result in a weaker currency and a stronger export sector. europe, japan predominately. and china will also benefit in that regard. with janet yellen pulling in one direction, she is pulling in their pushing, so it all works together. she is certainly giving and assist to mario draghi and japan. betty: although japan has their own problems. >> one of the big problems is sluggish economy. a weaker yen will help the

japanese export sector, as we already see it working in europe. if you look at german exports and whatnot. you can say, that policy is not helping the part of europe that needs help because germany has a pretty robust economy. nonetheless, the rising tide lifts all ships. betty: simon, would you agree with that? >> i'm not sure in europe the rising tide does lift old ships. we have is a productivity problem in the southern periphery which a weaker while it helps and is an absolute sense, still in relative battle with the northern core which is more competitive. therefore, the ecb not only needs to take advantage of the fact the fed is tightening, but needs to do more his cell. it is on the government's two loosen the fiscal -- to loosen the fiscal constraints and push through reforms. i am less upbeat and long-term prospects from the ecb. yes, this is a marginal advantage, but it stops there. betty: but it is not so one-dimensional, right?

>> absolutely. it is the same with the -- if they continue the gradual devaluation against the dollar, the fact the fed is raising rates, albeit quite slowly, will help them. but at the moment, they're --king in a cake and doing locking in a peg. i would argue that fed tightening cycle has been going 18 months. yes, we had a policy decision this week, but the dollar has been doing the job probably 75, 100 basis points for the us economy in the last 18 months. therefore, that will discontinue , continue to hurt the chinese if they don't change the peg. betty: let's go to some of the losers. i think it is interesting, i would think they would be in the category maybe winners given the devaluation of some of these currencies, brazil and china are losers? >> china is a mixed bag.

it depends on the currency adjustment, which simon alluded to. looking back on his comments on your, i agree with the point about instructional reform. nonetheless, struck her exports equal stronger economic growth, more tax revenue, helps whole process. i don't think we have a sharp disagreement there. betty: general moly -- generally in agreement. >> in china, a pegged turns exchange rate, this is part of the reason why china is moving liberalization. they see the dollar getting stronger at a rapid clip. they're saying, wait a minute, hour export sector is a very viable part of the economy. if we are tied to the dollar, just as the u.s. export sector is getting clobbered, the same thing happens to china. now as they liberalize and have this currency basket that effectively means they will see a weaker remember he and that will help the chinese export engine. brazil is in a bad recession. they have inflation problems already.

so if their currency is weakening, they have a very difficult choice, it are you slam on the brakes i raising rates during a recession -- which makes that recession all the worse -- or you let the currency's light and your inflation problem gets worse. brazil is in a camp. argentina also facing the issue. yesterday we saw the divine way should. betty: simon, who are some of the losing countries in this? is it the same list as carl? absente -- china will lose out. the fomc the plot from that was released and i think that is overly ambitious. to expect to get to 3.5% three years from now? i can't get because you have all of the other major central banks as you alluded to in your intro all trying to weaken the currency. that will just continue to do the job for the fed on their own. and people have spoken recently about the policy divergence in

1994 between the bundesbank and -- fed. i don't agree. that was a specific german issue during reno vacation. if you go back further to the mid-1980's, the last time we had true convergence when you had -- divergence in u.s. was tightening, you saw the dollar appreciate aggressively. i expect that to continue to be the trend in a 2016. betty: simon french, thank you. also thanks to carl. much more ahead in the next half hour of "bloomberg market." ukraine defaulting on a bond payment to russia. we will hear what the finance minister has to say about that news. oil is a lever the place today. talk about volatile markets. look at the latest on the crude market. some mining giants are in trouble. we will do the details behind the mining meltdown. ♪

betty: welcome back. julie hyman as a check on some of the company movers including some of the biggest laggards today. i imagine there are plenty to choose from. time icarmax, last checked, it was the worst performing stock in the s&p 500. coming out with third-quarter adjusted earnings per share, $.63, five cents a short of the average analyst estimate. sales also short of estimates as the company says sale trends have been lagging. shares are down by about 9%. i wanted to stick with a sort of transportation-related theme and take a look at the trucking companies. knight transportation is helping lead losses.

the company came out with a fourth-quarter forecast that is below its prior view. also below what analysts anticipated. the company says it is seeing fewer noncontract opportunities in the market and also says there is an excess of capacity right now within the trucking market. it sounds like it is seeing increasing competition and not as much demand, necessarily, a spot rates according to bloomberg intelligence. truckers have also been going down. this has been a problem not only for it but other trucking companies. the dow jones is seeing declines downa going -- again, about 1.6%. i have been looking at the month of december. i looked at the member rank returns within the transportation average. you can see it has fallen 8.6% thus far in december, setting it up to be the worst month since of timber 20 -- september 2011. transportation underperforming.

not a good sign. in terms of what is feeling the most pain, some of the railroad, kansas city southern for example, negative commentary about their earnings going forward will steps early, coal transportation has been an ongoing issue for them. there is a diverse other basket of transportation companies in here, kirby, a tanker company, ryder system, trucking company, also an integrated logistics company. inis ironic the declines these transportation companies are coming at the same time we have seen fuel prices lower. it is notable then that they are not getting the benefit from those lower feel prices. if they are, it is overbalanced by declining demand and other factors and their respective industries. betty: thank you, julie hyman at the markets desk. time for the bloomberg business flash, some of the biggest business stories in the news

right now. the price of oil hit a six-year low today with texas intermediate trading below $35 a barrel. the last time it was that low was in the middle of a global recession. glut is getting larger. u.s. stockpiles are now at their highest level since 1930. meanwhile, mexico's largest construction committee may set up the largest bond default in two decades. won't pay $31 million in interest on bonds due in 2024. the company is working at a cost cutting and restructuring plan. ica as been hammered by mexican cutbacks in infrastructure spending. you can always get more bloomberg business news at bloomberg.com. have beenbt crisis we watching very closely, there may be a bright -- breakthrough for puerto rico's debt problems. the island's main electric utility is such a reached a tentative deal to restructure $9 billion in debt according to people with direct knowledge of the situation.

erik schatzker joins us now. you broke the story on this. tell us exactly what is the significance of this deal. eric go the significance is, it sets in motion what would be the largest ever restructuring and the municipal bond market. up until now, i believe it is been to troy puerto rico, 70 billions of dollars -- $70 billion. it is a guerrilla in the invisible bond market. we know the troubles that puerto rico has been happening. the governor has asked for chapter nine authority from congress to restructure its debt. this demonstrates that puerto rico doesn't necessarily need chapter nine. this is being done out of court. it is attended of agreement with three parties -- the ad hoc bondholders and two bond insurers ,mbi and a sure guarantee. the ad hoc bondholders are going to take a 15% haircut. the most important part of this deal is what is called a surety bond. that is what assured guaranty and mbia are putting up.

that is what is going to allow for a securitization to take place for all of the debtholders to roll their obligation -- the --we.they own into this o effectively what is happening, the bond insurers are contributing new money in order to get a deal going because they're the ones who stand to lose the most. betty: it is fascinating. i can see the significance, but how does this all fall into puerto rico's larger debt problems? erik: is a must $9 billion of debt outstanding that prepa owe s. this will allow them to make a bond payment on january 1, you recall the governor said they made a fault january 1. at the very least, this payment will be made. this payment will then be refinanced by the creditors. it will get rolled into the securitization. again, it demonstrates that

maybe puerto rico doesn't need a chapter nine of authority. as the creditors and commonwealth can sit down at the table, a deal can get done. of course, the story we broke on bloomberg, i think we and assured mbia guaranteed stocks are soaring on the backs of this tentative agreement. it still has to be signed by the but hugeco legislator, step for. betty: thank you for breaking master it, erik schatzker. breaking thefor story, erik schatzker. much more coming up next. ♪

betty: lock them back to "bloomberg market." volkswagen has hired ken feinberg who handled the ignition switch settlement to design its response to the diesel administration -- ignition scandal. down with have to sit the company and begin the task

of billion a being the scope of dileanating does -- the task and scope of this program. >> has volkswagen given you any sense of how big your checkbook will be? >> no. no, but the company has given me a sense that it wants to do right by its customers. and that means there will be probably a menu of options available to customers designed to maintain loyalty and support for the company. >> what sorts of things will be on that menu as you go into this? >> well, you have to come up with fixes. the regulators know epa and the california state regulators and state ag's, they know what has to be done from a public perspective. of course, we have to be aware

of that. what in addition, what legal consideration it will take to voluntarily -- voluntarily try get people to opt out of the court system. that is an additional challenge. >> that leads to a question which is, how many lawsuits have been filed so far to your knowledge? >> i think -- hundreds of class actions involving hundreds of thousands of volkswagen owners. so there is a storm of litigation out there that is just beginning now. >> you have been through this several times and some very big high-profile situations. do you have any sense of a time frame? >> well, i don't. i will say this, and you guys know this because you talked with me in the past, at least, in this case, we are not dealing with deaths. we're not dealing with physical injuries arising out of

automobile accidents. and is an economic problem an environmental issue, but it doesn't involve human injury or death. and i'm hoping that we can accelerate the program by not having to take into account these horrible calculations that surround deaths and injuries, but we will see over the next few weeks, i think, we will get a better handle on a timeline into 2016. the real key to cleanse programs -- again, we have talked about this, how quickly -- how quickly can you offer relief to individuals who would otherwise be litigating for years and years? that is the challenge. onty: that was ken feinberg bloomberg . we are moment away from the european close. caroline hyde joining me from london for the european close.

you are properly wearing the right color for what is going on in the equity market. read is the color. overall, what a sea of red, down across the board in europe. why? the hike and over. we continue to look back at growth and the concerns about growth. we look at oil, commodities route. next, the finance minister of ukraine to talk about that big bond default to russia. join us, the market close is coming up next.

betty: a boost and software estimates, shares of blackberry up almost 11%. emily chang is set to talk with chairman and coo john thain. -- john chen.

joining us from blackberry headquarters. the earnings, look like for the first time, signs of a real potential breakthrough. what is your take on the timing of a real turnaround? this is one of those one quarter at a time, and we are so we positive progress take it a step at a time. i feel good about where we are. our software business seems to be doing very well. business is starting to turn in getting more to the profitability areas. qnx,.t. business and the more in the automotive business, there also going the right direction. knock on wood, everything's used to be working fine. emily: we're going tt