from bloomberg world headquarters in york, i am eddie lee. this is what we're watching. ok. we're looking at existing home sale prices that are just about to come out. they just came out. i want to get to the markets --. grade to 4.7 6 million. that is much lower than we were expect. we were expecting home sales to have little change. that was according to a survey by bloomberg. falling home sales are 10th 5%.

back to you. betty: we've got more on the markets. tell us more about how the averages are doing. we are in the green. >> let's go ahead. let's look at the markets right now. the s&p and nasdaq are all about flat. we had been higher earlier today. it looks like we are paring off some of the losses. we did see oil traded in the green. news of the u.s. economy expanded, it's at 2% on an annualized rate. thes take a look at function on the terminal. let's see how the sectors are performing in the first half hour of trade. energy is of the most high 710%

area -- 7/10 of 1%. some of these losses are increasing information tech, securities and financials. they are down nominally in the negative 10th of percent or so. let's go over to crude. crude has been taking a pause from the fall we've been reporting. traders are looking ahead to tomorrow's eia inventory report. rose $1 million. supplies are 130 million barrels above the five-year average. morgan stanley has said we are rebalancing and that might not happen until 2017. it might happen as late as 2016.

let's look at the root. it is falling, down i-4 tenths of 1%. sincen't lows not seen 2004. there is some selling it going on in treasuries western mark --? . investors are looking in other vehicles. the yield is up by two basis points to 2.2 1%. this is the highest in the past five days. let's take a look at currencies and the euro. it is rising against the greenback right now. this is the highest against the dollar since december 2014. betty: thank you so much. let's check in with news headlines. i want to bring in vonnie quinn. in endingnn: talks

syria's civil war will continue next month. rounds of previous talks stalled. what to do about syrian president a sod is the sticking point. syria and human rights groups say's nine students died when a mortar share in a school for girls. isis is blamed. a number of refugees crossing into europe is one million. that is four times higher than last year. about 4/5 of them arrive by see. they are fleeing the syrian war. president obama will host a u.s. summit on the refugee crisis next year. calling theuse is killing of six u.s. soldiers in afghanistan a cowardly. they were killed in a suicide honor. the taliban claimed responsibility. betty: thank you so much.

have much more ahead on it bloomberg markets. ♪

>> you are listening to the bloomberg advantage. we will talk about what's going on in the market. we have a bunch of economic news. dave wilson is talking the equity market for us are in we are checking out the economy. let me kick it off with you. it's a holiday week. i'm assuming light volume is people get ready for the holidays.

dave: not a lot of direction. you are seeing some relatively modest declines. is drifting between gains and losses. there is not a lot to trade on. there are a couple of earnings reports out today. we just talked about nike. absolute. performinghe best stock in the dow this year. their numbers will get a fair amount of attention. 2015.loses out there aren't any more earnings reports due from companies in the s&p 500. it will be a matter of looking forward to what next months results. final meeting.ur

it came in a little stronger than forecast area --. >> i think the number we got at 10:00, the existing home sales is the big story. a 10.5% incline in november of the listing homes. that's more important than new homes. it's a bigger part of the housing market. it shows if the household is theident enough to make largest purchase someone makes in their lifetime. you see a two-month skid. now it's 10.5%. a lot of these are single-family homes. that was an issue. people just can't afford to go out and buy a home. the millennials are coming back.

they can't afford to pay off their student loans. >> we've been talking about strengthen the housing work it. is this substantial? is this wait-and-see? >> we still have a spring season. it's going to be 70 degrees. know when it's going to end or begin. i don't think there is anything major to worry about people are going to buy houses. they will have money. it might take them longer to get that money. the thing you notice is housing starts and things like that are all multiunit. these apartment buildings are happening. if you've got to build

something, why would i build a home no one wants i can build apartment because people can afford them. >> they are up as a group. >> that's this year. builders,day at the most of them are lower. they are about 1.5%. it's definitely down and that becomes a matter of looking ahead. we'll get the new homes. we'll see how that segment of the market compares. that is a much bigger piece of the overall housing market. >> we get personal income tomorrow. we get an idea of how americans are doing. ultimately, if you have a job or you do, that's a big thing. how much you make it how it you are bringing in it, that's your

earnings. then we should expect or anticipate greater spending down the road. spending is holding up great deal. it depends on where you are's and did. nike is one of the places. year'sou look at this performance, where be seen the gains? and technology in health care and consumer related areas. may be those that are more dependent on discretionary income. that's everybody from retailers to homebuilders. they are the ones who have an up as year. when you look at these figures, it comes down to whether that kind of strength is justified by what the consumers will be doing

going forward. top performer in 2015. >> those of the two biggest groups in the s&p 500. market, look into the we've talked to guests about more stocks hitting 52 week lows. what do we find when we look internally? concern thathe it's been a relatively narrow kind of a dance. this year has been all about bank. up,phrase that has popped updating the trends of 2015, the use that. thanks. netflix google. especially the nasdaq, it is higher than the s&p 500 is down.

you could throw in microsoft and some other companies in that mix. it's been a you relatively small number of stocks that have done well and held up the indexes. for some people, that's a real concern. >> just look at facebook alone. is skewing what you see in the overall market. we've got about 30 seconds left. we have economic reports to come this week. what else you watching for? >> i'm looking for the exit sign. there is probably nothing more important than income and spending. >> thank you so much. we are keeping a watch on the equity side of things. you've been listening to the target report.

a quick check on the markets. there is little changed. we do see some gains. the s&p 500 is up 21. the nasdaq is higher by four points. you're listening to the bloomberg advantage on bloomberg radio and bloomberg television. back in a moment. ♪

betty: good morning and welcome back. it's time for the business flash. some of the biggest business stories. deutsche bank has identified $4 billion insists she's transactions related to its russian operations. to $6mount is in addition billion in mirror trades under investigation. they have like as much as $10

billion in traits that may not have been added or money laundering it. 300,000 of itsg older cars because a headlight might turn off. the models are the crown victoria and mercury grand marquis. it knows of 11 crashes and one minor injury because the problem. he has lost nearly $20 billion. that's about the size of the economy in honduras. he is the fifth richest person. he has gone down from third earlier this year. that is your bloomberg business flash. not bad. i want to head to the markets.

the movers. we're looking at nike interplay. i am going to look at chipotle. a little bit early for lunch. people are not going to chipotle anyway. the shares are having another rough day. this most recent down date is after another break of e. coli was revealed. let's take a look at the stocks. they are down by 4%. the company is reporting that in kansas and oklahoma five people have gotten sick. following --after falling 4%. that is not very good. since the outbreak, that brings a total loss back on november 2 two about 21 .20%. they are in a pair market. they lost $4.3 billion in archicad.

today -- market capital. analysts did downgrade the stock. i know you will be talking more about chipotle later on this hour. betty: we will. this existing home sales are down. we are coming back from those lows of the session. let's turn to politics. donald trump is warning of an economic bubble. that trumpbama said just exploiting anger and fear over economic insecurity. same group of people most harmed by rising inequality. megan murphy joins me in new york. we are joined with more. megan, let's get to you first.

why'd you think his message is resonating? megan: it's people who dropped out of the middle class. whose wagese people have stagnated. these are people who are concerned about how they will pay for their kids college education. these are and ignored group. donaldf people point to trump and talk about the outrageous things he says. not enough people are talking about why the message is getting through. he has got some simple reforms. he's going to keep the threats to your jobs out. we need to acknowledge that this message is something that is coming home. said they feel the economy is rigged, not just republicans and democrats, across the

--.torate area betty: the upper income is even with the middle class. the middle class is really lost ground to other strata in the united states. heard megan say that. would you agree with that? doug: it's been a bad recovery. he saw wages stagnant. even those that have a job are feeling pressed. this has a lot of anger. presses have gone back to more progressive solutions. that is the rise of bernie sanders. the right is not going to go to the government.

they don't like the mainstream candidates. they flock to cap as a candidate of last resort. betty: if it feels like for the class americans that they are losing out on the success of america, wouldn't they want to turn more to democrats? megan: i think hillary clinton has been successful on running on a strategy. four out of five presidents who have led economic expansion has been democrats. she is trying to capitalize on her husband's economic record. she said look at what i husband dead. i will repeat that pattern. you may not agree with some of the script is. is here is saying policies will boost female dissipation in the labor market. saying expanding these

policies is an economic policy. it's a way to jumpstart growth. this is something the white house is concerned about. how to get more people in the workforce. that has stagnated over time. betty: is it unfair to call it anti-progrowth? doug: she may be saying i want to have the success my husband did. she is but he did. she is opposed to trade. really doing is carefully targeting segments of the population that she needs to keep together. they won't work for the economy as a whole. q repeat the same strategies we have seen. they have not worked very well. she's going to have a tough sell in the in. selling taxans are reform in regulation reform. they claim it will restart

growth. times, theyple of have not been able to make that sale. i think both sides are in a tough environment. we get inequality at a 40 year high. some of the republicans who are prescribing some of the same old cut the top rate of tax on the rich and have a trickle-down, that's not working. what is working -- betty: who is resonating more with the middle class? megan: we thought this was going to be on the middle class. right now, it national security in terms of isis and this blue-collar segment. they have slowly shifted to the republican party. that is supposed to be ground zero in terms of and decide it's been that may end up deciding 2016. betty: thank you so much.

it's good to see you, doug. have a good holiday. we have much more ahead on bloomberg markets. it pays to buy guns, jails, and coffins. that's making one investor a lot of money. ♪

betty: you're watching bloomberg television. vonnie quinn is here. vonnie quinn: the first baltimore police officer will go

back to court in june. william porter's trial ended with a hung jury. five other officers will go to trial. conferring that a huge china landslide. bodies were pulled from a pile of rubble. still missing. were damaged or destroyed. a man-made pile of debris triggered the landslide. i'm vonnie quinn. betty: despite intense debate over gun control, gun stocks are on a tear. they are outperforming the s&p. one firm has no palms about investing in these dark stocks. you wrote that story.

this one investor. >> the london company of virginia. i had not heard of them. this portfolio. a sizable chunk of it is in stocks of company that make guns, ammunition, private prisons, funeral services, and tobacco on top. betty: they had no qualms about it. >> to the contrary. emotion came up during the reporting of the story. one of the clients and a guy who helped them get their start said a lot of people get emotional about guns. he is not going to get emotional about it. it's a good stock. that's how they think about it. betty: how has the fund performed? ask they had $2 billion just a couple of years ago.

they have quintupled in the last war years. investors are paying attention. the have done well over the lifetime of their funds. the first three quarters of this year have not been easy for them. it's been a weird year. betty: tell us about the ceo. >> the way one of his former ranchers described him is as an old-line virginian. he went to the virginia military academy. the school's 175 years old. he worked as of the people who went to the mi as well. he is a classic investor. he seems to care more about the stock as a stock and not the fact they are making guns that cause a lot of carnage. betty: is this unusual? it's not as if the entire fund is in the stocks.

is this really unusual to see a fund invested like this? >> it's fair to point out they have the majority of their portfolio is not in guns and ammo. i was surprised to see they are the number one shareholder that makes more guns than anyone else in america are in they are one of the biggest shareholders of two ammo companies. big that's.make >> when you look to see who the big shareholders are, i think most of our viewers are not sure who those investors are. they have a lot of mistakes. betty: who are the shareholders? >> it's not random people. teachersork state retirement system has money invested in them. one of the biggest pension funds

in the country just added them to the list of potential funds. have people interested. betty: thank you. as we had to break, you can get all of your business news on bloomberg radio. we are on the radio.com. ♪

>> you are listening to the bloomberg advantage. benchmark global products. learn more at their website. you are listening to the bloomberg advantage on bloomberg radio. i want to welcome everyone from tv. we want to talk about e-commerce and it bridging the gap between

e-commerce and brick-and-mortar. he went to bring in our guest, he is the chief executive officer and he joins us in the studio. david, talk to us about what you are doing. you are a software company. we talk about commerce every day. what specifically are you doing to help out? david? thank you for having me. specifically is behoved retailers have large physical store chains and e-commerce businesses engage their customers who are browsing online, who are not wind there and heard them into local stores. >> when i check out something, a pair of shoes, you will try to capture that and make it into a purchase for a retailer.

david: we bring a store online for the first time. there are unique assets and services and ask arian seceder created within a physical store that cannot be replicated online. retailers with our platform have the ability to leverage the digital presence. almost all customers start their have to purchase online. even if they don't convert. we help them engage the audience through their phone, mobile device. >> how you do it? david: it's not retargeting. it's creating a bed -- that are digital presence for the store. each store has its own unique destination online. we optimize that. the customer comes to a location. iny might convert to. are

they may rsvp to an event. they may browse product and put it in the dressing room and look store. it's up to me the same as. >> be more specific working with some really well-known retail rands. give me an idea what you have done for j.crew. like: for a retailer group, we help them howard the ability to rouse online or in turning itind is into an experienced center for your best estimates hopes drive much higher purchase value. it's about meeting the customer's expectations they

want to start the purchasing on their own. they went to and in a great personalized. >> it's very localized area they do national brand campaigns. this could resume better with tumors. david: i was in channel marketing for a large american fashion brand is not a toolkit whereby my stores could engage the customer at a local level and that is digital. it's not on the sidewalk anymore. it's digital. the we do at work is we are teams to market locally in a bigger way. this keeps in mind that it needs to be coordinated in two a

corporate marketing machine read --. >> how can you tell if it's successful western mark j.crew has been struggling. what kinds of signs to you get if there is a payoff what you are doing online? david: we look at a few ways. traffic tove more these store pages online. that traffic can be up for various customers. when that traffic grows, it converts into traffic growth stores. we look at driving customers online into unique experiences. it might be one-on-one customer support or one-on-one associate interaction. how we can help

retailers build a better understanding of the intent. understandingtter that this customer is going to shop online and this one was to shop in store, i can more efficiently market. just see it walking around. they are struggling with amazon. we are seeing at this holiday season. they are struggling. david: what rick and mortar s need to do is leverage the unique aspects. they have trained associates read they can try product on. they have easy returns. you can reserve a product. they can leverage those assets, they to bring the assets to the customer. bring a store online, it's a new front door for the store. we are in a time of revolution

for retail. 2016 will be the year of the store. it will be the defining asset that retailers will use against online for retailers. you have to join the digital revolution. minute, who about a does it well western mark david: apple does it extremely well. it's the largest company in the world. they may have the ability to do some of this themselves. quick work has the solution to help all of the other retailers to get up to speed. >> can j.crew be an apple? can learn from apple. they can leverage the assets they have an meet the customer online and they can use their stores to drive higher value customer engagement overtime. x point will be the year of the

store? david: they are rising from the ashes. you will see retailers who have graced the of the store as the center forex arian's. they will do well in 16. >> thank you so much. ♪

betty: welcome back to bloomberg markets. we're looking at some of the biggest news stories. a deal between fourth and google could mean they are the first a self writing car on the road. they will announce the partnership next month during the consumer electronics show. google has had a plan within five years. claimis an arbitration with the regulatory authority. the unit has unfairly poached staff from its u.s. private banking business. unit,y wind down the u.s. 70 of the divisions 300 managers left recently for ubs. a judge has declined to order a mental evaluation of sumner redstone. take swornan testimony from two doctors who

treated the 92-year-old. his ex-girlfriend contends he cannot take decisions for himself. he controls cbs and viacom. that is the bloomberg business flash. we will look at markets. abigail doolittle has the latest. more news on apple. abigail: you can't go a day without talking about apple. we are trading modestly higher. that was caused mainly by apple. it's been the big story for weeks. investors are trying to sort through week iphone demands. the iphone demand was fine in reports. there is an interesting analyst.

he did say he got right he downgraded shares back in the summer on concerns around the supply chain. he says while he is holding off on an up. maintains his sugar price of 100. investor expectations around the guide may be finally to perish. sh.beari considering that 84% of the street analyst have a buy rating, it will be interesting to see if any others come out and defend apple. betty: thank you, abigail. let's stay on stocks. it's the tale of two companies. started with to play, let's take a look. the shares can't catch a break. battered yeting again of e. coli breaks in

previously unaffected states. meanwhile, it's been a different story at hiking. shares are up early 5% this year. there is no stopping the rise of the athletic wear company. mights slowing economy the only thing that stopped them. they're reporting earnings after the bell today. let's look at these companies. craig joins me. matt townsend as well. let's start with you. stock is down already 7% in two trading days read what's going to bring closure? ask they are getting slammed by this trickle of that headlines. there is no closure. we've not heard from the cdc. the last update was december 4. now they come out and say five new illnesses and three other state.

they say it's connected and part of the wider outbreak. it does not matter in the mind of the customers. the stock is getting hammered once again. betty: how crazy is this. the fate of glee is in the cdc's hands. >> late criticize them not long ago saying it was unusual. they don't know what caused this. they have not said it's lettuce or tomatoes or cilantro. that is the question in customer's minds. it's going to hurt their sales big-time. the stock will be under pressure until they get it. betty: they had the car neatest issue first. >> they ran out of premium pork green now they have a series of virus scares. now these new states. it's one thing after another.

that creates a bad situation for the stock. passed by age apparently in my neighborhood. it was nearly empty. i do know how many people go there on saturday night area you've seen the same thing. sales are hit by this. >> they said sales plummeted. the first link to the outbreak was in november. they were down 16% in november. this is a company that has never had a negative sales order since he went public in 2000. there areems like pictures on twitter restaurants at noon when they are typically slammed that are empty. it does not look good for them. betty: thank you so much. on retail, mikey is killing it. what is going on there?

matt: expectations are high for the company. they keeping expectations. one of the strengths for them is china. they did 30% growth there. will what's going on in china hit nike eventually? one of the cases out there is it will eventually have to hit their numbers. betty: how big are the sales? matt: it's 20%. betty: a plan to make that a plan to make any bigger piece of the eye? matt: they want to get sales to 50 billion and china is a big part of that. at some point, it's got to start slowing down for them. betty: what have they set about this? they've got to be aware of the slowdown. not: they have said we have seen this. reportumbers and they

orders going forward, they look at. we will see. it's a case of them taking share from other players like adidas in the market. the brand is still really strong. we will see. it's one of the big question marks. of weakness and retail across the board. we will see after the holiday season. betty: what's working for nike? >> global soccer. they continue to do a good job in that. they were the clear second player to adidas and they have matched adidas. still a really strong category. there is an athletic leisure trend. people are wearing a more athletic wear and yoga where to work.

betty: how big of a businesses that western mark: around $30 billion in sales. it's substantial. whether that's wearing it to work out does not matter. they are wearing it and that's fine. betty: what about the currency trends? they are so global. is there much of an effect from me currency movement western mark --? matt: defined as an of their sales come outside north america. it is substantial. they have been able to outperform without the expectations. betty: they have been the best performer. at: under armour has been performing really well. the stock performance is close.

betty: thank you so much. break, two stocks are moving in opposite directions. shares of craft jumped 30%. 30% afteres dropped the acquisition. we look at the year in deals with one of our best experts. he'll join us in a moment. ♪

stephanie: it is 11:00 in new york. welcome to bloomberg markets. ♪

betty: good morning. i'm betty liu. stocks are fluctuating with the s&p headed for its worst december since 2002. the euro rising as the dollar heads for its worst month since april. deutsche bank is flagging $10 million in suspicious russian trade. and it was a record-breaking year for m&a with megadeals like pfizer allergan. we will look at what is ahead in 2016. we are about 90 minutes into the trading session. let's go to ramy inocencio. it looks like the market has shrugged off existing home sales 10%. ramy: you took the words out of my mouth. we are two for two in the green.

the s&p and the dow are up. the nasdaq is flat. we are looking at oil trading higher. the u.s. economy is expanding at a 2% annual rate in q3 versus a median estimate of 1.9%. that is from a bloomberg survey of 76 economist. s. let's look at oil. and the fall we have seen over the past year is taking a bit of a pause. this is its biggest rise in the past two months. traders are looking ahead to tomorrow when the eia comes out with its latest inventory report. inventory likely rose by one million barrels last week. that would mean supply rose by

-- hanging out 130 million barrels above the five-year average. morgan stanley has said that a rebalancing might not happen until 2017. betty: so crude is spiking. but that's not helping nymex gas. ramy: gas futures really falling for the second day in a row. that is because of warmer winter weather. you can tell you don't need your coat today. it is supposed to be 70 degrees on christmas day. today it is down by 1.7%. peak six months ago, it has fallen by about 45%. that has pulled down the average price of gas at the pump. let's take a look right now. uprage gasoline prices are from january 2009. the two dollar

mark yesterday. if you want to offset losses from gas you might want to go into apple. billion, lost $64 lowering its price target to $130. that is because of production cuts in their supply chain. betty: thank you so much. i can't believe 70 degrees for christmas. we want to check in with courtney donohoe from the news desk. the number of refugees crossing into europe this year is now over one million. the international organization for migration says the total is four times higher than last year. about 4/5 of those seeking asylum arrived by sea. many have drowned. the u.n. estimates the world's

displaced population now exceeds 60 million. end to syria'sn civil war will gather in geneva. -- talks to find an end to syria's civil war will resume. diplomats will gather in geneva. the white house is calling the killing of six u.s. soldiers in afghanistan cowardly. the americans were killed yesterday while on patrol near bagram airbase. they were targeted by a suicide bomber on a motorcycle. the taliban claimed responsibility. one of the victims was a new york city detective serving in the international guard. two other service members were hurt the attack raises the number of u.s. service personnel killed in afghanistan this year to 21.

thank you. much more ahead in the next half hour of bloomberg television. pfizer allergan is not the only deal to break a record in 2015. we will look into m&a next.

betty: some breaking news from pimco. they have just released their market commentary via video. they have just released their outlook for the next year. they say that the fed rate hike is not the beginning of the end of u.s. expansion. likelyy the fed will still have a very accommodating policy going into 2017. they also note there probably will be fewer than four rate

hikes in 2016 so they are adjusting themselves for a lower rate rising cycle. they say the rate hike is not the beginning of the end of the u.s. expansion here. let's turn now to deal making. 2015 is turning out to be a banner year for m&a activity. there were at least eight $50 billion plus transactions. brooke sutherland is a columnist .or bloomberg ga >> a lot of these big companies aren't growing like they used to. get thatway they can growth is by buying another big company. debt is pretty easily available. some companies have been able to finance these larger deals.

betty: so there's some deals we should talk about. pfizer allergan. >> it is the biggest drug deal ever. the combined value is almost on par with ireland's gdp. there's a lot of things to like with the steal. the biggest is the tax savings that pfizer is going to get. set up itsps pfizer established products business for a spin off. there are some question marks. there aren't as many operational synergies. overall this is a good deal. betty: anheuser-busch and sab miller. >> it's hard to say that this is a bad deal. it is beer and it is huge. anheuser-busch didn't have a lot of options and sab miller was the biggest most logical move. when you look at the combined company, it's not necessarily growing that fast.

it is sort of a vicious cycle where you keep buying and you are not really growing that much. that's going to be a wait and see. betty: and finally shell bg group. >> this is a deal that makes a lot of sense strategically. it's just the timing that was a little rough. overly they had a very optimistic outlook on oil that they used to justify the price tag they are paying for bj. have comeoil prices down since april. a veryink they had overly optimistic outlook on oil that they used to justify the price tag that they are paying for bg. obviously oil prices have come down since april. let's get more insight on all these big deals that have made headlines this year. joining me is frank aquila. also joining me is jeffrey

mccracken. jeff, let's start with you. we were talking about the low cost of money. aboute's what i will say 2016. we have a story that's going to go out later today that's -- is this a peak? i think the conclusion that we have come to is, next year is going to be busy, but you will not see as many of these $50 billion plus deals. you will see $5 billion to $10 billion. a lot of companies have done their big deals and the regulators in d.c. are putting more scrutiny on these deals. the big health insurance companies have all come together this summer. i think there is going to be some pushback next year. that might hold off some deals that people were thinking of doing. that is our view. betty: i see you nodding your

head. it's hard to see so many $50 billion deals happening next year. i would have said at the end of the first half that we weren't going to see as many $50 billion deals in the second half and we have exceeded that. betty: is that a time when you are glad you are wrong? frank: exactly. there was not a lot of m&a 2013ity from 2008 until and it only really got started in the second half of 2014. in addition to debt availability and low growth, you also have companies that have a lot of cash on their balance sheet and a lot of u.s. companies that have non-us cash on their balance sheet that they can deploy in acquisitions outside of the u.s.. probably about $2 trillion. : investors have a lot of

deals that are broken before they happen. the buyer stock will go up. which never really happened 10 years ago or five years ago. that has really helped the cause for m&a. frank: one of the reasons for that is because companies have cut so much in terms of spending after the financial crisis, there really isn't a lot more for them to cut. but if you acquire another company and you have those cost synergies, you really have something where you say, even if we don't get the other benefits of the deal, we have the cost synergies and we have a team that can deliver those. betty: let's talk activism. carl icahn is making a bid for pep boys. jeff: carl icahn puts his own money to work. he doesn't play with other people's money. i think what he is saying is, as a financial investor, i can make

it work at this level. someone who is strategic can actually pay more. jeff: he also is strategic. he bought a chain called auto plus. theink he wants pep boys retail outlets and then he would sell of the other elements they've got. he wouldn't want all of the company. just the retail side. he is a different activist than the other ones. he's willing to put his money into it. betty: what about the chinese? where are they in other areas of m&a? jeff: the chinese get a bad rap sometimes because they move slowly. a lot of the big companies that want to do big deals have to get government sign offs. that gets decided by the chinese government. that always slows down the process and makes them more reluctant or they move slower.

frank: that's true for state owned enterprises. they have to get state council to approve it. theyere are two bidders, have to get a decision. ready to thank you for joining me, frank aquila and jeffrey mccracken. still ahead, we are talking biotech. and what a run they have had. but is it the end? we will take a look ahead with our bloomberg intelligence 16.look 20 ♪

betty: good morning and welcome back to bloomberg markets. let's look at some of the biggest business stories in the news right now. home sales plunged sharply in november. sales of existing homes collapsed 10.5% to a seasonally adjusted annual rate of 4.7 6 million.

sales of existing homes are on track to rise roughly 5% for the entire year. thanis recalling more 300,000 of its older cars because the headlights might suddenly shut off. the affected models are crown victoria and mercury grand marquis. the automaker says it knows of 11 crashes and one minor injury because of the problem. and that is your business flash update. you about some headlines coming out from the cdc. this involves another case of e. coli outbreak, this time linked to costco rotisserie chicken salad. the cdc says between 14 and 16 people bought this chicken salad. five people were hospitalized with costco linked e. coli. this is all due to an outbreak reported starting on november 3.

can we show costco? stock is taking a dip. the marketsad to desk with ramy inocencio. ramy: i want to look at sneakers. finish line shares are on the move. up by a quarter of a percent. this is costco. up 6.2%.h line is really rallying after bank of america merrill lynch raised their rating on the stock. bank of america says that 2017 is going to be a growth year for the retail because of better margins and more products from nike and under armour. foot locker also moving after bank of america raised its stock to neutral.

in other retail news, abercrombie shares are up by nearly 6%. this comes after changes in the executive suite. fran horowitz will be taking over as president and its first chief merchandising officer. leftormer president has the company. the company itself has suspended its search for a new ceo. under armour is another stock to take a look at. it has fallen. down about 3.5%. this comes after susquehanna cut its price target to $86. they say margins may be under pressure because of sales and bad weather. take a look at how under army armour and nike are outperforming the market. nike is up by 35%. under armour trailing behind,

but still pretty healthy. nike reports earnings after the close. betty: thank you. 2016 is just around the corner. bloomberg intelligence is digging deeper into what to expect for the next year. we are looking at everything from global credit to oil and even smartphones. today a closer look at the world of biotech and what a ride it has been for this sector. 320% in the past six years. sam fazeli joins us now from london. a lot of people look at this and say, is he going to be over in 20 16th? is it? 016? is it? >> nothing really goes up forever. you get these peaks.

since down about 16.5% july. the reasons don't have to have necessarily something to do with biotech specifically. case a lot has been the hillary clinton tweet about drug pricing which of course is a real issue. from a political perspective, probably rhetoric. the reality is- that going forward, we will see real pressures on drug pricing. the consolidation of the payer market. i think that's the kind of thing that people have to assume is going to come. our analysis suggests that drug sales over the next five years

are going to go up by about $100 billion just for brands of drugs of the large pharma companies. that is still a lot of money that is going to come from somewhere. betty: it sounds like there is certainly risk. pricedder, is that risk into biotech shares right now? thehen you look at valuation of some of the large-cap biotech's, they look lower than some of the historic peaks we have seen. some of that is associated with the fact that their earnings growth isn't necessarily great either. we have done a comparison looking at large pharma versus dietetic. -- versus biotech.

the risk is it looks a little bit like -- there is one big drug, potential patent challenges coming up. people are worried about it. that's why it's getting on a lower multiple than its earnings growth would suggest. so i think 2016, a lot of these companies will have to look at m&a in terms of how they are going to defend their bottom growthnd bring in more for companies like amgen. do these biotechs earned m money? >> a lot of these are in the major profit generating world. what i think is going to be interesting in 2016 is that a lot of the targets for these m&a

thes are likely to be in bolts on acquisitions -- full bull ton acquisitions. you, sam fazeli. we are moments away from the european close. caroline hyde has more from london. caroline: really choppy. check this out. a really mixed bag. ftse steaming ahead. germany is lower, italy is lower. i want to focus on the volatility we see in the stock market. stoxx 600 swinging between games and losses. what are volumes like where you are? betty: indeed. i know you are also looking at crude prices.

volume is down here when you are at the stock market about 20%. keep the ion volatility not only in stocks but in oils. that's why we are seeing oil and gas companies do particularly well on the ftse 100. coming up on the european close. stay with us. ♪

betty: welcome back to bloomberg markets. i'm betty liu. markets are just wrapping up the training day in europe. let's bring in caroline hyde.

caroline: today has been a pretty volatile one. european stocks swinging between gains and losses. the stoxx 600 closing in the red. and a shock decision coming from the turkish central bank. the european close starts right now. ♪ betty: we will take you from new york to london in the next half hour. this is the european close. a third day of losses. we were in the green, we were in the red, and we closed lower overall. off 200 billion euros from market valuations over the last three days. a mixed