from bloomberg headquarters in new york, good afternoon. here is what we are watching this hour -- so much for a santa claus rally. the s&p on its way to the biggest drop with the fall of oil. " brought in an estimated 528 million dollars this weekend. we will hear from disney ceo bob iger in an exclusive interview. and the bad boy of pharma is fighting back, telling the "wall drugt arnold" that his price hikes led to his arrest. let's head to the markets and we did a bit of a fake out today. almostg out hire, losing

all those gains and now we are back to where we started the day. the nasdaq, the biggest gainer, up about .7%. energy stocks have been the biggest laggard all day. let's look at the smp year to date as we get closer to the end of the year. we are lower by a little more than 2% with just eight trading days left. higher inhas finished the past three years, but we are on track to break that will stop this is the seasonality chart and we are on track for our worst december since 2002, when december ended down by more than 6% stop we are on track to be 3%. by a little more than david: not many indications we will be making up that ground by

years end ramy:. ramy:especially with some new research coming out saying that a year rally for the s&p is in doubt i'll stop we would need to rally about 2.7% by the end of the year. we've got eight trading days and the s&p has only done that in the last eight days of the year just five times since 1928. days were only positive 15 times, that's about 17% of the time. was -72 times, about 83%. apple, making a move right now, up a little more than 1%, near its session highs after erickson and apple settled a legal dispute for how mobile devices communicate with each other. apple will pay royalties for the next seven years and that companies are reaching an agreement to work together on

areas including 5g development and wireless networking. david: thank you very much. bloomberg newson with mark crumpton. six american soldiers are dead after an attack on a u.s. run airfield in afghanistan. the attack was the largest in afghanistan since august. officerd french police who was traveling on air france is in custody after a bomb scare forced an emergency landing of his paris bound flight. it is the first arrest since a series of recent hoaxes disrupted travel for thousands of air pat -- air france passengers. his bidgraham is ending for the republican presidential nomination. the senator announced he is dropping out, saying while we have run a campaign that has made a real difference, i have concluded this is not my time.

the teen gop hopefuls are still in the race. system is active on amtrak rails from washington to new york. the so-called positive train control can automatically slow or stop a speeding train. week ago.ivated one transportation experts say the system would have prevented the deadly train derailment in philadelphia last may. wordis a look at our first news right now. i'm mark crumpton. david: investors are waiting for the end of the year santa claus rally but may be disappointed. the equity benchmark has fallen 3.5%, bucking the historic seasonal trend of gains we have seen. guest joins me now. let me start with the fed.

a few days have passed. how have the equity markets reacted? run-up intoad the wednesday and then the we don't know it's going on selloff which more or less negated everything. these last couple of weeks, professional investors continue to be somewhat cautious, and that is the type of wall of worry we like to see going into the new year. in this kind of environment, when there are gains and we think the potential for gains in 22016 are good because the earnings bar is set low enough because of an earnings recession. valuations are not stretch and there's plenty of m&a going on. you mentioned the drought in earnings. if you look ahead to 2016, do you expect that to continue? julian: if you think about it, a

lot of the story this year has been energy. you need this massive rally in oil prices. fx and energy stabilization along with natural growth, it's very common the economy accelerates and we think that will work positively. do you think the fed grasps the global mess of the economy in light of what janet yellen said last week? julian: we do think they get it. if you look at september, the market was so upset that -- they alluded to these problems, the strength of the dollar and when we look at 2016, even when the annomy does not accelerate earnings day toward the weaker side, that means the fed will be easier than expected. we were looking at the

comparisons. as you look at 2016, how useful is that kind of perspective, to see how things have played out before? julian: it is very useful. history does not always repeat, but there is a rhyme across the years postop talking about this bad december, the bad december was 2002. if you look at how positive the equity markets were, there is cause for reassurance. david: what gives you the greatest worry as you look ahead to 2016? now, isthe question is this going to be more of a demand issue? what we want to see is a bridging of the disconnect between a consumer leading economy and manufacturing.

the isn report, which was very weak this month, coming out on january fourth really could set the tone for the next several months. you optimistic about china? many people say that is what is going to turn it around. are we closer to getting an uptick in that? at the copperlook market, it has rallied off its lows very quietly as oil has continued to train lower -- to trade lower. we have the feeling china is going to stabilize. it may not be the commodity buyer it must -- it once was. david: you mentioned the outlook overnstitutions have consumers. how big a disconnect is there when investors are looking at all of this volatility? julian: if you look at it, a lot of it has to do with the fx energy.

public thinksting about fx, it thinks about it in the context of that means my oil is cheaper and my gasoline is cheaper. you are seeing signs of a pickup in activity this season and we think that will carry through into next year. but public participation is not where you would like it? julian: we do believe we are in a bull market and we see the public tend to get interested and we expect that in the fullness of time next year. david: we talked to some folks last week looking at the high-yield market saying that it could perhaps lead to that. any indication of that to you? julian: only very slightly. the high-yield market has suffered from overinvestment the last several years and the preponderance of energy exposure in that spe has caused some

losses this year. when you look at it, are quantitative work shows less than a 20% chance of a recession next year. david: are there sectors you are more positive about than others? we continue to prefer and the market continues to prefer the sectors that can grow revenues strongly -- health care, financials, technology and select consumer discretionary. they also have the most cash because the earnings have been the most consistent. there is a chance because we have had a significant amount of tax loss selling that we could get a rebounded more cyclical areas as we restart the new year. david: what was the biggest surprise this year based on what you predicted? julian: if you had told me earnings were going to be down and we would continue to trend

lower in the price of oil, i would have thought it would have been materially lower. we look at this year as a win because you essentially went sideways. david: always great to talk to you. the next half hour of bloomberg television, 2015 deals.ecord number of who were the biggest winners? it was not the shareholders. more trouble for pharma past shkreli hasmartin been a fired from two companies that he ran. awakens" says a world record. disney ceo bob iger tells us what's next for the company in a bloomberg exclusive, next. ♪

david: welcome back to bloomberg markets. it's time for the bloomberg business flash. j.p. morgan chase has agreed to pay $150 million to public pension funds to individuals hurt by the london whale trading loss. they described risky trading

strategies as hedging or risk management devices. martin shkreli has been fired as pharmaceuticals. he told the "wall street journal" that he was targeted because of his controversial drug price increases and persona. that's a larger figure than previously disclosed. according to staples, the federal trade commission rejected the offer without making a counter offer. the company says it's willing to continue negotiations with regulators. guiltymer trader found of manipulating libor had his sentence cut. he will serve 11 years instead of 14. a panel of judges rejected the appeal against his conviction following a two-day hearing. the court held his conviction

from conspiracy to fraud. and cheap is the word for holiday shoppers. been doing more bargain shopping and hunting for deals, but this has taken a practice further. this is bloomberg markets on bloomberg tv.

david: welcome back. corporate america is in for an uphill battle after a let of mende deals. here at the end of the year, remind us why we had so much activity. guest: we saw a lot of shareholder activists coming to the forefront. companies are under a lot of pressure to be proactive and

make sure they are doing things to create value. .hat spurred a host of mergers some of them were megamergers. while it was called for, investors wanted companies to look for ways to grow and consolidate their industries. maybe prices are too high and we are paying too much for some of these deals? the year is sort of ending on a mixed note. you think of who might be though winners and it's not investors, it is bankers. the first year where bank or fees are down. on its own, that doesn't mean anything. to the levels before the financial crisis or higher. the goodwillt piling up on someone's balance sheet, it causes a little concerned. we just don't know that yet.

a note of caution. report onry time we one of these, we pivot to talking about what regulators will do. i wonder if we are getting a sense of how they are reacting to the size of these deals? we have never seen this many deals of this size in so many industries happening at once. the department of justice and the ftc are very busy wondering what the long-term impact is going to be and we really don't know because it is unprecedented. david: i know taxes have been a big motivator. do you think that is a driving force here? tara: everyone was concerned the new treasury rules would somehow dampen that. there are so many companies paying 25% or 30% on their income and it seems like it's not sustainable when you have

their rivals going and lowering their taxes. david: and you very much. on the web. more corporate america is not the only place having a rough year. martin shkreli has been ousted in two companies. here's what he told the "wall beating theal" -- person up and trying to find the merits to make up for it, i would hope the government would not take that approach. is developinghat and dramatic in amazing ways. what is the latest? you is fired as another ceo today. he was fired as another ceo today. from he took the stock $.45 up into the $30 or $40 range and put it now you around $100 million. he made quite a nice paper

profit on this and then they ousted him. he's gone as ceo just like he was at during pharmaceutical. two companies and gone from both in addition to being kicked out of his last company. david: i know they halted trading and that continues. drew: and we don't know when it is going to continue. plummeted more than 50% in just a few seconds before the exchange was able to halt trading. that was on thursday and we are entering our third full day without any trading in these chairs and no idea when they are going to resume. they say they want to get more information but there are investors who have no idea what's going to come out between now and when the shares start trading again. it is a remarkable situation. david: investors have money in

the stock, including martin --reli himself will stop himself. drew: it is a not insubstantial amount of money for him. we don't know where he bought in. these are paper profits at this point. as of recently, he was a majority stakeholder and quite diminished from his peak. ared: twitter and youtube out let's where they can find him doing things. over the weekend, someone hacked his account. drew: a bunch of unseen stuff was put up. he put message up saying his account has been restored and he said he expects to be fully vindicated. he made some other comments in our competitors vapors over the weekend saying that this is a one-sided incitement and it's

not a ponzi scheme. take.ual outspoken david: this does not seem to have chastened him at all, or at least his public persona. drew: one of the comments he made was that this is just a social experiment. jerkchnology t has been a to people, that i was just acknowledged he has been a jerk to people and that he was just having fun. david: he talked about how he was targeted because of price gouging. drew: this all relates to a series of hedge funds that he ran and then the government allegation against him said he had a series of failing hedge funds come easing the next one to pay previous investors and then paying investors in the last hedge fund out of shares of but the federal

government is more than happy to make yourself -- make your life miserable if you make yourself to the villain he has 10. ♪

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so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. you are watching bloomberg television. let's get a check on the bloomberg first word news. mark: five suspect being held today in belgium with in connection with the november terrorist attacks. the most wanted is not among them. aviation experts have failed to retrieve information from a flight data recorder of the russian warplanes shot down by turkey last month.

an inspection of the recorder reveals 13 of 16 microchips on its data board or nearly ruined and the remaining three are damaged. turkey shot down the russian bomber at the border with syria saying that the plane violated its airspace. russia insist the plane never entered turkish airspace. lindsey graham is no longer running for president. after months of lagging in the state and national polls, the south carolina senator announced the decision today on his website. >> i am far more confident today that they will reject the obama doctrine, and restore our military and take the fight to our enemies and do what it takes to make our country safe and preserve our way of life. mark: his exit makes it easier for south carolina republicans to side with one of the other remaining candidates in terms of endorsements and

contributions. carce say woman who ran her into a crowd did it intentionally. at least one was killed, 37 others were hurt. a woman in her 20's. she is being tested for drugs and alcohol. a three-year-old in the car at the time is on march. that is a look at the news right now from the bloomberg first word desk. david: commodity markets closing in new york. let's check on the big ne movers. chatted a few minutes ago, nymex crude would have been of, but that is not the case as we go into the close for commodities right now. has paired off those losses, down by about 2%.

recovery. much managed to break losing streak, up nearly 8% for the second day in a row. part of the reason for this is the forecasting for the weather. a colder midwest u.s. for january, and warmer temperatures on the east coast. record warmth on christmas day, nearly 70 degrees. david: coming up in the next half-hour of bloomberg television, our exclusive interview with disney ceo bob iger. we will review that interview shortly. strong words from apple's ceo tim cook. we will hear that, later this hour. ♪

david: welcome back to bloomberg markets. disney's first crack at the star wars franchise is one for the record books. you could bring in $528 million worldwide. bob iger touchdown with bloomberg . >-- set down with bloomberg

to be great, and the user experience must be great. if youn to believe that are in a market that is being disrupted, you obviously want the best product that is out there in a disrupted market. we believe we have that at the company, including obviously, espn. if you are in a market that is changing, you would rather have a very strong hand, is what i have said. what is better than espn in that regard? the value of live is very important. programming they do, the brand volume of the -- value, the allegiance of the fans is important. this is all important in a market that is being disrupted. long-term, we will be just fine, but we refuse to have our head ishthe sand or be pollyanna

about this. thatere are those that say the cable business is reaching majority. even though it is not falling off a cliff, the growth potential is limited. a company like walt disney company that relies on espn for your operating growth, what can you do to replace that growth? >> it is obvious, what you said, that it is a business that is relatively mature. the multi-channel television business. you will not see a growth in household that is anything close to what the business experienced over the last decade or two decades. there is some pricing leverage. there is some price increase that can and will be taken by the best channels, and my opinion. but it will not grow anything close to -- by the way, we believe we will continue to see some growth, but it will not grow at the rate we

have seen in the past. david: you believe you will be able to replace whatever moderation of growth you have with these other initiatives? i we don't give guidance, so cannot be specific with you. except to say we are bullish on the growth process of the walt disney revenue because of the intellectual property, the property, the brand. the fact that we are seeing development in markets that are creating opportunities for us. china is a great example. wars and thet star numbers earlier. china does not open until january 9. stephanie: how big could china be? >> it is the number two market in the world. it will become the number one movie market in the world, in a few years, sooner than anybody anticipated. that is a huge opportunity that did not exist a few years ago. as we look at the world, either in the star wars franchise movie's nest, there

is a growth opportunity that did not exist before. it has created a growth opportunity for us that we are in a position to take advantage of. david: how important is direct to consumer and espn's future? a multichanneln model. we believe it is not only not going away, but coul predictions about its demise were overstated. we think at some point, if that business model were to fall apart, there are opportunities to go direct to consumer. with the disney brand, possibly with pixar and marvel and certainly with star wars. stephanie: you said earlier the best channels. do you think that some good fall away in the next few years? >> i like the hand we have with

disney and abc and espn. i would prefer, if you are facing some sort of disruptive forces or headwinds, you want to , to own the highest quality and brands. we believe we do. i was struck by what he said about intellectual property. how important it is to have that. spent a not insignificant amount of money on the star wars franchise. david westin: mickey mouse himself, that is intellectual property. that is been a main theme in that company. he is taking it forward into the next generation with lucasfilm, and pixar and marvel. david: he did not strike me as somebody who is worried about the future of television.

did he convey that to you, that he feels optimistic about where things are headed? david westin: absolutely. he said he is bullish on disney in 2016 and 2017 in terms of earnings and growth, without giving guidance. i have known bob a long time. careful,e was very very thoughtful, thinks things through. he knows what he is talking about. that gives him optimism as he looks at the downsides all the time. david: thank you very much. a great interview. if you do not get all that you can see it on bloomberg.com. coming up, data sharing with the government. ♪

david: welcome back to bloomberg markets. before between privacy of public safety has been a topic of conversation over the past few months and encryption has taken center stage. joining us to discuss is emily chang. i bring this up because charlie rose got to go to apple had orders. he saw a lot of cool stuff. he sat down with tim cook, and spent some time talking about significant policy issues, the first of which was if there should be a backdoor to e-mail or not. emily: a great interview with charlie rose and tim cook. they really put their thoughts out here on the encryption issue . tim cook has said we should not

have to choose between privacy and security. this is america. but apple has been under increasing pressure with what has happened in paris and san bernardino to cooperate more with the government. they talked about this issue of whether there should be a backdoor. take a listen. >> there have been people we you suggested we should have a backdoor. but the reality is if you put that backdoor in it is for everybody, good guys and bad guys. >> what is the government right, to say that if we believe that information is evidence of criminal conduct or national security behavior? >> if they lay a proper warrants on us, we will give the specific information that is requested, because we have to by law. in the case of encrypted munication, we do not have it to give. -- communication, we do not have it to give.

emily: their communication is encrypted, so their argument is we do not have it to give. they squared off on the other side of the table with respect to apple and tim cook. was a federal case where apple said we cannot give you access to a drug dealer's messages because we cannot unlock that person's phone. but then they came out saying we will protect your privacy, but it does not extend to criminals. >> if the government will provide is a court order and a subpoena to start tracking certain activities of people, we will do so at that moment in time when the court order and subpoena has been served. beyonde of us should be the business itself. we have our duties to keep our society safe and peaceful. he feels that blackberry has the responsibility to the greater good, not to protect

criminals. it is an interesting two sides of the debate really evolving in the tech community. got to seelie rose some parts of apple that many people have not seen before. he was escorted through a famous design studio. i did not notice anything that was negative to be an apple car. what did we learn about the design process? was one of my favorite moments, seeing those clothed tables. you have to wonder what is underneath those blankets. what future apple product. i think the process has to change tremendously. steve was deeply involved and thought deeply about the product. johnny has taken over the hardware and the software. he has control of this process from end to end. he is really shaping the look and the feel of future apple products msn they have promoted -- applent executives

products. so they have promoted a number of different executives to fill those spaces. david: thank you. the 2016 race for the white house has taken an interesting turn. lindsey graham dropping out of the race. we want to welcome our bloomberg television audience as we take a look at politics. a major candidate drops out of the race for the white house on the republican side. megan murphy joins us in studio. she is the bloomberg news washington bureau chief. lindsey graham dropped out of the race. why did this happen now? the last day he could get out without being on the ballot. that was the ingredient for the timing. there is no surprise he has exited. he was polling very low. able to scrape into the kiddie table for the

republican debate. to happen now is a more interesting thing in terms of who will pick up his supporters and what role he wants to play in shaping this race. >> lindsey graham is a very interesting republican. our bloomberg news story points out that he is a protége of john mccain who was a maverick. did lindsey graham think he had a chance to win the republican nomination for the presidency? megan: i think everybody who starts in this leaves they have some sort of pathway. they have highly paid consultants and those who hope them attract money that saith the chips fall this way in iowa or new hampshire and you survive to south carolina, that was going to be his, who knew what could have been. there was such a sprawling and unwieldy feel this year, i do not "have said even as recently as your four-month ago that no

one had a chance. .hings have changed we have seen a tremendous surge by donald trump. some consolidation behind marco rubio as the establishment candidate. we see a search with ted cruz. it was becoming more apparent for him that there was little juice to be gained both in terms of having meaningful impact on the race and it was not worth the dollars he was spending. >> you have a good point. if most people i did ask a year ago in donald trump had much of a chance, we would have all laughed. is creating a lot of fodder on comedy shows. seriouss also a candidate. remind our viewers why south carolina is such a serious state. megan: after the early voting states of iowa and new hampshire we move on to south carolina. lead mr. trump shows a big

, there is still everything to play for in terms of how will things shake out from iowa. let's say that trump finishes second in iowa, maybe second or first in new hampshire. we are going to move down there and see who is attracting a wide spectrum of voters from evangelicals to deeply conservative who would have backed lindsey graham. one person you mentioned earlier, john mccain, it will be interesting to see where he now thats support lindsay has exited. that'll be a big fish for a lot of republican candidates. south carolina, and where we coalesce to is going to be very interesting to watch. the bloomberg political team in washington and bloomberg.com, all due respect, where do you see the support for lindsey graham and the donors, the financial support going? >megan: we are going to see a

huge amount of candidates really play for this. jeb bush and marco rubio will be in there trying to capitalize on his biggest way into the race. he really framed the anti-isis. he was talking about the need to focusd troops and this fight and how long and how dangerous but how necessary it was going to be to wage that kind of war against them on the ground. that was way before paris, san bernardino, and one of his lasting impacts on the race will be how he moved that issue to the center of the field. this issue was thought to be a race on the economy, on boosting the middle class struggling with stagnant wages, lack of social mobility. theyet, as we have seen

threat of isis and the very extreme acts of violence in paris not touching us in san bernardino, california, and these scares we have seen every and other france flights, people are edgy and nervous. lindsey graham was pushing that to the center of the debate. those who can capitalize on that sentiment, where he was on how core that fight is to america's , the next four years, the next eight years, the next two decades of foreign policy, who can win that support will be very crucial an in south carolina. >> let's turn our attention to president barack obama's interview where he publicly slammed donald trump's plan to deport several million undocumented immigrants, criticized his comments questioning senator john

mccain's heroism. the first time he is publicly called out donald trump nine name. what does this signal? megan: the white house is not going to sit back during the president's last year in office and let this rhetoric go unchallenged. i have been very clear about that. they have wanted to stay on the sidelines. thought thatrs the phenomenon that is donald trump would rise and fall and take a natural course. now they see a man has built a double-digit lead in almost , one poll that comes out that has a credible chance of winning iowa, new hampshire and domino effect down the line. they are very alarmed by the rhetoric isis going great not only in terms of his statements on muslims, but going back to immigration, hispanics, that all mexicans coming into this country are dealers.nd drug

they have drawn a line in the sand, and if there's one thing president obama will be focused on in the next several months is pushing back that this is not what america stands for and this is not what his administration has not for so long and so hard. ought for so long andd s so hard. is this because some of the things that he has said has resonated with the american public? megan: absolutely. a lot of people are getting sick of this refrain that you have to be to bed or on education or fearful or xenophobic to back him.- he is tapping into deep-seated fear about not only the presence of radical islamic terrorist, but at the economic direction of america is and what the future is more generally in terms of our foreign policy place in the

world. president obama tries to craft a message for the american people that he really is the one that had the most comprehensive, most sensible strategy in place fear that we have not had to deal with in this country before 9/11, that he will be using that and pointing to trump as an outlier. david: speaking to our bloomberg business chief megan murphy. chipotlenews here about reporting one more sick person. , the stock that news dropping 2.6%. cdc reportinge

one more person ill in this e. coli outbreak scandal that has persisted for several weeks. this person in pennsylvania. this person did not report eating at the restaurant before november 14. another hour of bloomberg markets on bloomberg tv coming up next. ♪

betty: it is 3:00 p.m. in new york, in :00 p.m. in london, and 3:00 a.m. in hong kong. welcome to bloomberg markets.

-- 8:00 p.m. in london, and 3:00 a.m. in hong kong. welcome to bloomberg markets. from bloomberg world headquarters in new york, good afternoon. i am betty liu. here is what we are watching on this afternoon. stocks are writing the way up riding the wave of them down. forget about star wars, disney may find its next gold mine in china. we will hear from bob iger about company's opportunities and challenges in the world's most populous country. lead apple onuld leaveok for billions -- apple on the hook for billions. we are under an hour to the close of trade on this monday. we have your market check.