from bloomberg world headquarters, good morning. hope you had a great holiday. we are watching a lot this hour. saudi arabia getting squeezed. how will king solomon industry -- king solomon administration: off. -- andce casters forecasters predict stock for next year. and isn't the el niño affect, climate change, or both? how this winter's abnormal weather is impacting countries with commodities. we are about half an hour into the trading session. julie hyman is standing by. it has been like this pretty much for this year. where stocks are going.

>> it has become even more so as we get into the last quarter of the year. oil is leading declines for sure. all major averages down. , driven by what is going on energy. have the imap up here. energy far and away the worst part arming group. consumer discretionary, the only group in the green. start to get more holiday shopping numbers and they are largely positive and it is definitely not enough to tip the scales. we have iran talking about increasing exports being a priority. oil now at its lows of the session. continuing that march downward.

>> do we blame well for the poor performance -- blame oil for the poor performance? >> yes. have seen this big upswing as oil has resumed its decline and accelerated its decline. it is now near a two year high. it is a 0.4 correlation. oil is driving the story at the time. today look at your performance with the s&p once again turning negative, energy stocks down 25%. if the stocksear to end the year negative, this is who you can blame. >> julie hyman at the markets desk. let's check in this morning.

>> we begin in iraq were government forces are claiming a major victory over islamic state. iraqi troops have attached iraqi isops have captured -- that when u.s. defense secretary -- carter criticized the iraqi forces. carter said the iraqi forces had no will to fight. is going to visit communities from the northern part of the country that were hit hard by flooding. thousands of people have been evacuated and the military has been called in to help. cameron has called the flooding unprecedented. a series of tornadoes killed at least 11 people. twisters had winds up to 200 miles per hour. 1500 homes were damaged or destroyed. flooding in the midwest is blamed for at least 13 deaths.

democratic presidential webb may beim moving closer to an independent run for the white house. web attackedend front-runner hillary clinton wash was secretary of state. web dropped out of the democratic race in october. after going up for decades, asthma rates in children have quieted down. the 20 -- the 2001 through 2013 studies so just a possible plateau in childhood obesity rates. average rates kids aged 17 and younger increased , then leveled off. more than 150 news bureaus around the world. i am vonnie quinn. >> much more ahead in the next

half hour of bloomberg television, saudi arabia being that saudi arabia being squeezed. crude is down about 30% so far , dragging down oil producing but also profits back home. those stories and much more coming up.

>> you listening to the bloomberg advantage. i want to talk about the markets on this monday. also what is going on in the world of economics. we want to welcome everybody to .loomberg radio covering the equity side of things. on the economic side of things is our own michael mckee of bloomberg surveillance,

bloomberg television. >>ht week for economic news? and of thenumbers, month look at spending. everybody is gone this week. nobody has to wake up and look at the numbers. so far so good. to me about the equity markets, it was a pretty bullish week last week, a different government and tone on this monday. >> it seems like the markets are taking a bit of a breather. it was a decent week and at like that and like mike said, the markets are down 70 basis points now. seeing weakness across .ll 10 major industry groups this is maybe a little bit of a breather.

there are also not a lot of people in the office. >> bring on the numbers. >> we can use some breaking news today. numbers as to whether the markets are going to be up and down makes a big difference on wall street. >> it does. as somebody told me this morning on bloomberg surveillance, it is a psychological issue more than anything else. the s&p comes up a 10th of a percent for the year. it could go either way. differencemake a whether it is of a bit or down a little bit. psychologically it seems too, because what we have been told is the fed has raised interest rates, we are entering a new era. i think people want to see progress out of that. --what about treasury off it

treasury auctions? >> not going to have a major impact on trading right now. have adjusted to a post fed world. the long end of the curve continues to flatten. that seems to be something of a reflection at this point with what is happening with oil prices. the fed may want to generate more inflation. they will find it difficult of prices keep going down. >> is this the week where you sit around for companies -- sit around waiting for companies to slip out announcements? >> there definitely could be some of that. companies do know how to tie things. maybe they are hoping some things will get overlooked. didly a couple weeks ago i a story about people waiting for the santa claus rally. we are not even flat on the year, so if people are holding

out hope for that there is not an olive time left. there could be enough time left. >> it too much time or not enough time. that's either too much time or not enough time. -- either too much time or not enough time to >> we do get some economic data out of china that led to a selloff. >> we have been talking about china a lot. you have two diverse camps. some people say their troubles are behind them. others say things are going to be worse. because that is such a black box we have no idea what is going on. bad news today from russia. that was the interesting story of the day because not only do

they have contraction on a monthly basis in five months. oil price decline is only going to make it worse for the economy there.

worldwide sales in 12 days. a lot of folks went out. inc. you for not spoiling it. michael mckee covering the economic side of things. eloise jackson on the equity side of things. we're looking -- stick around we're back in a moment.

welcome back to bloomberg markets, time for a look at the biggest business stories in the news right now. the ceo of embattled pharmaceuticals is taking medical leave. willm of executives replace pierce and while he is out.

investors are failing out of commodity funds. record $807 million has been pulled out of u.s. exchange traded fund to speed up the value of those funds has fallen 26%. rob materials have dropped to a 16 year low. on you get your presence time? fedex is being hammered on social media for missing some christmas the liveries. the company blames heavier than expected last minute shipping volumes. fedex says delayed packages will be delivered today. packages bound for your home are getting priority. that is your bloomberg business flash update. out of saudi arabia the country unveiled its 2016 budget. the slump in oil prices is hitting the economy with a projected deficit of $87 billion. is reporting a

national transformation program to be unveiled in january. he is a middle east managing matted -- middle east managing editor. it is not going to's -- not going to offset slump we see in oil prices. >> it offsets it a little bit. the deficit is going to shrink roughly from 1,000,000,002 $87 billion. there is a decline in the deficit forecast. if you look at the breakdown of the expenditure next year, there seems to be significant savings on social spending and house spending. while we don't have last year's figures on that, but on military

and security spending that is one quarter of the budget. committed.a remains they have a war, they are fighting in yemen. they are involved in the fight in syria. shows one of the reasons why saudi arabia had a 16% deficit for gdp last year. >> and they are not going to back off on producing their pace of oil. what is king solomon's unveil?ration going to >> we don't know. we reduce some of the subsidies. we reduce some of the prices for fuels.

in five years they are going to gradually reduce the subsidies. they also said they are going to sell off some state assets to reduce spending. could be part of the transformation process. theyy they already said are planning to do this over a five-year period. they are trying to do everything now in a brutal fashion. to avoid economy grinding to a halt. >> talking about the saudi arabia and budget. let's stay on the impact of oil.

it now feels like a real possibility, wiping out any prospects of earning gains for next year. chief strategist at citigroup. do you have $20 oil forecasted in your projection? >> no. hit $20e saying if we oil, will it hit your profits and why? >> the s&p went up to 12%. 6% of the actual earnings numbers. that wiped out the growth expectation.

they are going to be up maybe 1%. all of that can be driven to energy alone. you would take another earning out of expectations. >> there are some who disagree. gina martin adams talked about $20 oil as well. when you get to that point there is not much more you can go in terms of battering earnings among energy companies. she believed it is going to unleash consumer spending that we haven't seen so far this year given the fall in oil prices. >> i think people would have said the exact same thing when you drop to $40.

it is an immediate response. price,r to get $20 oil you have to have a severe collapse in demand. at $20 most of the projects can produce profitably. even if you were not to get there again that this -- looking for 55. peshmerga looking for $55. he will probably balance fairly quickly because there will be a supply reaction to it. >> $20 oil doesn't exactly signal economic growth. it signal something very wrong in this economy. let's go to the what if scenarios.

i know you have gained some how. what if we see dollar weakness? one of $20 oil is in that scenario as well. we have been talking for several years about great rotations out of bonds and stocks. why would 2015 possibly pretend that? >> you finally see people taking losses in bonds. people haven't taken those losses. for ahey see losses sustained. of time in the asset class, they move away. pouring money into mutual funds in the 80's and 90's. now they are distrusting of equities in the same sense. if you were to start to see losses and bonds you would probably create that great rotations.

it will be as rapid and we haven't been on the side that we are going to get that great rotation. there is buyback activity. that could start to draw them back in. you think some of the valuations would be cheap just because of significant new demand for this asset class. so much, good to see you. the chief u.s. equity strategist at citigroup. you can get your business and and on bloomberg radio stations in new york, boston, washington, and san fran.

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betty: live from bloomberg plus world headquarters in midtown manhattan, i'm betty liu. let's go to our markets desk or

julie hyman has a check on some of the company movers. julie: some of the more positive movers in a somewhat downmarket. but look at disney. disney coming off a big holiday weekend, reaching a billion dollars in ticket sales for "star wars: the force awakens." even though critics have talked about espn having challenges, the success of the star wars movie was higher than more optimistic projections and is helping power that disney stock higher. let's look at what is going on with shares of fit bit. reports the company's free app spot to-- climbed 20 the top position at itunes which implies a lot of people got a fitbit under their christmas tree and they are activating the apps tied to that.

then we have some analysts and other commentary helping a tree with stocks. amazon is trading higher. saysray's analyst they continue to grow at an impressive speed. alphabet shares rising this week , saying that you too, which is owned by at-bat, could be twice as valuable as netflix. worthld potentially be $100 billion as a publicly traded company. and nike is up by .5%. margins could be poised to rise driven by price hikes and a less negative impact from foreign exchange. you.: thank let's continue with the bloomberg first bird -- first word news.

has killed at least 16 people today in northeast nigeria. the islamic extremist group attacked with rocket propelled grenades and suicide bombings. the government says its troops drove off the attackers and intercepted 10 suicide bombers. dozens of people were hurt and hospital staffers say they are overwhelmed. the president of turkey says the country will increase security following a series of cyberattacks last week. and banks websites by anonymous for a legendship for islamic state, a claim that turkey denies. the japanese prime minister has made a landmark apology to korean women for sex slaves in the japanese military during world war ii. agreed to establish

an $8 million fund to compensate victims. relationshas hampered between japan and south korea. the childhood home of former has been bill clinton closed. authorities are inspecting a suspected arson case. a passing motorist noticed the fire around 3:15 a.m. on friday. estimated damage is $20,000. , for more carss are being added to the recall for to cut a airbags. ata airbags. it could -- could affect more than 450,000 vehicles. at least nine deaths are being blamed on explosions caused by

the airbag. global news 24 hours a day powered by our 2400 journalists and knows -- news bureau around the world. more ahead -- shoppers are finally spending money this holiday season. why are some retailers singing the balmy weather blues? and we will head to the slopes to talk to the head of the sugar bowl ski resort. ♪

carroll: this is the bloomberg advantage. we're going to talk a little bit about the retail environment and what happened after christmas in terms of consumer activity. we talked on december 23. based in purchase new york. this is carol massar along with

cory johnson. you said you were seeing a lot of activity. what happened christmas eve and the days after christmas? it was a condensed holiday season. we saw spending increase 7.9%, so very strong spending. that's taking out both autos and gas. we haveayed spending been waiting for in women's apparel appeared with double-digit growth. we also saw a surge in furniture spending as well. saw that in some of the stocks as well. where was the furniture spending and what were people buying? the important thing that is key to understand is when you look at the spender, she is saying i have confidence i can spend into multiple months going forward. she has the ability to buy the bigger item.

electronics were down, so there's a determined consumer, but they wait until the last minute. purposeful and what they wanted to buy. carol: i'm curious about what the millennials or buying. guest: we finally must have kicked them out of our homes. actually living on their own and so we saw this over index versus the regular consumer. we bought furnishings and we were accentuating our home a little bit. larger are replacing the ticket herbal goods. -- durable goods. really seeguys can the data minute by minute. we talked on december 23.

december 24, what did you see in the weekend after christmas? it was a saturday and you add warm weather on the east coast, i'm just curious about the activity. men leave itknow, until the last minute, so it was the biggest day for jewelry. we did see the surgeon jewelry spending we expect, so that was critical. saturday was very strong. if you look at august this year, there was one last -- one less saturday. two people in the family are working, so saturdays are critical, even if it's the holidays. search through a december 31 because many people are on holiday. that is where we see destination spending pickup. people will be shopping their nobles -- their normal store and

we will see that in their spending. prices?at about low gas we did not see that across the board going into christmas, but in select places, you saw retail spending improve. did that ever play out? rings and allort forms of tender, not just our transactions. it uses cash and checks and we have seen an increase in spending every single month since gas prices dropped a year ago. we have seen $.72 of every dollar being spent. the northeast has been somewhat muted with respect to spending use with respect to that dividend.

carol: what does that tell you about what we might see in 2016? what is important as we see these larger ticket items being purchased. someone has the confidence and will perhaps pay over to or for months. thistioned last time acceleration of spending at small businesses. 44 months in a row, soy's wrong trend where the growth rate is stronger. -- we talk about how the small business owner is the back one of the economy, so they are doing well. guest: these are businesses with $50 million or less. upnovember, we saw a pair only 1.3%. they were the ones who grabbed a lot over the thanksgiving holiday. is there any notion what

this means going forward? they don't mean much for the next 364 days, but the furniture thing and household formation, we've seen a real slow down in millennials buying housing. isst: i do believe it sustainable because it has been a trend for six months were we've made this shift from furnishings to the sofa. sustainablehat is and will carry through. we are spending experientially. we see it in airlines and hotels restaurants spending is almost as large as grocery spending in terms of our food spent. we see this whole experiential service oriented spending to accelerate.

about can you tell us delinquency? guest: people are keeping very low credit balances and using the cards as a transaction way to manage the cash flow so they can watch how they spend. what debit and credit cards have turned into. carol: when you look at the big-name retailers, do you see those trends picking up in your research? up 20%.nline was when you buy something online over the holidays, the return is their problem. will people want that problem themselves going forward? we have seen e-commerce growth to be consistently in single digits as a share of total retail sales.

carol: the bottom line is the consumer is doing ok. thank you for checking in with us. she's the senior vice president at mastercard. she joins us in the studio this monday after christmas. markets andk on the we see a lower tone to the equity trade right now. 500 down about 13 points and the dow jones industrial average with the decline of about 89 points. ♪

betty: good morning and welcome back to bloomberg markets. markets with the abigail doolittle. what is weighing on nasdaq? abigail: the stocks are lower after last week's rally in the biggest sector wait the composite index is health care. we have the biotechnology index down close to 1%. even so, they are showing nearly technical percentages after not one to bear markets earlier this year. today, shareswn are plunging after this biotech company said an experimental antiviral drug failed to meet study.l in a critical shares are trading at a record low, so it is clear that

investors have weighed in. it's going to be time for the street to clean up with 77% of analysts having a buy rating and the consensus price target on this single digit stock near $61. betty: think you so much. this year has been anything but normal when it comes to global weather patterns. almost every part of the world has been affected by el niño and the deadly storms in the midwest and texas. a meteorologist that joins us from sarasota to discuss the impact not just on this but on commodities as well. as to whetherate this is all el niño. is it a climate change or a mix of both? guest: there are several factors , including a storm that occurs over the western pacific and

indonesia that could alter our weather. also warm times and that index will move east over the next eight weeks and, as it does, it's going to create a colder outlook over the next few weeks. beenal s prices have .ottoming with snow i don't see a major regime that's going to get the market out of the doldrums. you mentioned natural gas and oil. where else is this having the biggest impact? if you put up the global gdp, you see the majority of the countries have a positive gdp effect. betty: let's bring up that chart. indonesia, for example,

has a lot of problems with weather and reduced crops. that has helped the cocoa market rally. gets aunited states, gdp shot in the arm. we have had a lot of severe droughtbut california's , which has helped produce prices soar over the last two years, that will get a shot in the arm. that's a positive effect on gdp. terrible snow in boston and in the east, but this year, we will see better weather that is good for consumer spending. that was one year after the el niño effect from prior years. what is going to happen next year? guest: the main bull markets we

have seen have been the southeast asian and mexican droughts, we have seen about a .5% to 50% rally in a sugar but west africa' where we have two thirds of the world's chocolate still has the potential to create a rally with el niño effecting that apart -- that part of the world. if el niño weakens, then we see global grain production fall. by may or weakens june, we could see devastation of the crops and our country. as any major bull market, i have been very bullish. crazy. producing like we have the biggest production in this country since 1966. it's going to take a lot to get us out of the doldrums. will be a wild before

oil prices come back. did i hear you right? it sounds like we are bracing for back to winter weather in ?he northeast our weather conditions going to kind of normalize? because of this tropical wave over india, it can change the current thousands of miles away. it's called the butterfly effect. i don't think it is going to be enough to jumpstart the energy markets. its may be a floor and the natural gas market. i think we go back to an el niño forern, so i'm not looking any major catastrophes that will impact the consumer retail sector or housing starts sector. most, butek or so at

nothing we had the last couple of winters. betty: thank you very much. one fallout from the warmer weather in the northeast is that there's no skiing. here is what the slopes look like at sugarbush and vermont. there is some snow but there's a lot of green as well. just a few trails open as temperatures are too warm to make fake snow last. anding us now is the owner president of sugarbush. how bad is it? how much money are you losing from this warm weather? thet: it has probably been worst start to winter in 50 years. some hours of snowmaking and have been open every day since thanksgiving. what we have open is good and we are skiing.

it turnedews is that really cold last night and we are blasting snow and there is five or eight inches in the forecast right now. the pattern you just talked about is beginning to change and we will be in better shape in the weeks to come. how many people are coming to your resort at how many did you have last year? we have a lot fewer this year. 6000 or 7000 skiers in a normal christmas week. we will be down significantly. andle are still here there's no question we will be hurting financially. about not just your resort but others -- are you able to hold out for one season?

how does it affect you for the years to come? it's like my old business on wall street. you can't expect a good year every year. .e have had three good years you want to make sure you are not overleveraged and make sure you have good reserves. we will not have as good a year this year, but we will survive and continue to be a viable business going forward. tonya is my producer. it is it betty you are talking to. i understand that sometimes you just hear voices in your ear. doing we go, what are you outside of trying to make more snow and attract people to your resort? we are year round, so we

don't just operate in the winter. we have 90 different events planned for the holiday week, anything with pizza night out for the children and we do a snow dance party in the courtyard tomorrow. we have five or six different events for kids and adults every day to make sure people have a wonderful experience beyond what they are doing on the slopes. much. thank you very much more ahead in the next hour. george zimmer, founder and former ceo of men's wearhouse giving us his retail report card of the year. don't miss his take on other ceos. ♪

betty: it is 11 a.m. in new york, 4:00 p.m. in london and in japan. welcome to bloomberg markets.

from bloomberg world headquarters in new york, good morning. i'm betty liu. this drug company may need a new prescription -- the stock has longed, lawmakers are skeptical and the ceo is on medical leave. what it all means for valeant pharmaceuticals. and it's not all cutbacks and shrinking bonuses -- we will tell you the best jobs to have on wall street next year. and the holiday retail report card. what it says about the way america shops. we are 90 minutes into the trading session. julie hyman is standing by. we continue the slide in stocks. julie: the commodity-driven slide. how many times have i said that this year? the losses are accelerating to some extent and it has a lot to

do with what's going on with commodity prices as we see the 10 worst performers, all with the exception of one related to the commodity markets. consol energy, marathon oil, those things having to do with the energy complex are taking a hit today. freeport-mcmoran copper & gold is one of the worst performers this year. company iser of the stepping down as chairman. he has held a position at the company for two decades, so this freeporta switch as has struggled with the falling prices of gold and copper. out theant to point global commodity monitor. change,-day percentage

natural gas is the outlier today. energy is down. the metals complex is down. pretty broad-based selling within those commodities. betty: that means there is no santa claus rally yet. julie: it's not looking too good. bloombergk at my terminal which looks at the seasonal changes on the s&p 500. all the way in the corner, we have a 1.7% decline for december. last decemberne as well. sincerst december decline 2002. this is unusual and it comes back to commodities. onty: let's check in

bloomberg first world news with courtney donohoe at the news desk. courtney: we started the middle east -- in iraq, troops have captured a key city from islamic state. islamic state forces have been in control of ramadi since may. it is strategically important because it is in the province that links the country with syria, jordan and saudi arabia. iraqi troops heavily taken control of the key government complex in the city. in northeast nigeria, the islamic extremist group boko haram has killed a 60 people. suicide bombers targeted civilians and others use rocket propelled grenades. the nigerian government says the troops drove off the attackers. the japanese prime minister made a landmark apology to korean women forced into being sex slaves for the japanese military during world war ii.

japan's foreign minister delivered the apology and a meeting with his south korean counterpart. an $8agreed to establish million fund to compensate victims. the issue has hampered relations between japan and south korea for decades. in china, the top legislature has approved the country's first anti-terrorism law. it allows the chinese army to take part in counterterror operations overseas and requires technology companies to assist chinese authorities with encryption keys. near dallas, the cleanup has begun after powerful tornadoes killed at least 11 people over the weekend. almost 1500 homes were damaged or destroyed. hardest hit was the suburb of garland. midwest is the blamed for at least 13 deaths. the governor of missouri has declared a state of emergency.

global news 24 hours a day powered by our 2400 journalists in 150 news bureaus around the world. much more ahead in the next half hour. more on the valeant ceo. ♪

carroll: you are listening to the bloomberg advantage. with corymassar along johnson. we want to talk about them and day. it was a busy year in 2015. we want to look at what is ahead

for 2016. our bloomberg gaslight column this is tracking m&a activity. also the author of edge strategy. let me kick it off with you. it was a record year for m&a. trillion are at 3.8 this morning. so we have by far past that. certain industries are seeing record size deals. it has been across the board. cory: we have seen so may deals of sony varieties from summary

kinds of companies, but i'm wondering what deals we did not see. even deals that might have gone through them might look bad in retrospect. that is one of the questions we will probably tee up next year. there is a lot of press and coverage and the deal volume has been unprecedented. will they be allowed to continue and will they be allowed to have certain combinations occur? will they try to copy that or do something similar? maybe we won't see some of the larger deals coming forward that we have seen.

i think we will probably see larger deals come under more scrutiny going forward. carol: there have been m&a deals said don't pay off our make good sense. certain trade deals that do end up paying often those that don't. the two things that we have doneng -- our research and can provide the that is often due to execution challenges. more often than not, what is interesting is did they get the price right? have they thought about what it is they are paying for and have

priced appropriately what they expect to realize? they look for cost synergies and a number of deals which can be very risky. like commercial synergy or revenue synergy as opposed to looking at two companies that say they will merge and find ways of reducing our costs space. revenue synergies are where a company finds a way to create more revenue growth with this new company. mostink that's one of the tricky things to get right. , a great revenue

acquisitionbe the of gillette a number of years ago. they had an understanding that not only were they in the same industry but they had a complementary set of capabilities. they were able to look at the customer's of each of these companies. participate as far as a greater proportion of what those consumers want by expanding the product line. carol: i wonder if a deal doesn't make sense if they have

to be smarter and that companies they do purchase? companies are being held accountable to shareholders and it is interesting because some of those investors are pushing for deals and these investors are the ones who might be saying these are the ones that do not make a lot of sense. we still have longer-term growth concerns and the price you paid may be a little rich. it may be interesting if the tables turn. and yet the bankers still get paid. guest: you see that in the performers of some of the leading investment anchors here who have had a fantastic year. i think we will still see people doing deals. it is a tool for strategy, not a strategy itself.

it something that will create value for shareholders? while we have reasonably high cash reserves on this side, and reasonably cheap money from a lending perspective, you will see a lot of companies looking to use that tool to advance their strategic agenda. carol: it has been a busy year. the momentum cannot continue at this pace. guest: it is hard to imagine it will continue at this pace. there will be less growth and we saw this year. we still have not seen some industries participate. in oil and gas, we are not seeing the oils we thought was going to happen. still some industries where there's not consolidation and we have not seen private equity

firms do a whole lot. carol: you wonder if any distressed area becomes interesting because we have not talked about some of the credit problems that are out there. the m&a activity announced this year, it has been a very dizzy here. we will continue talking about the m&a world. ♪

betty: good morning and welcome back to bloomberg markets. it's time for the bloomberg business flash, a look at some of the biggest stories in business right now. mark zuckerberg making a personal appeal to india to allow a free internet service. the plan would allow customers to access facebook and other services like job listings from their phone without a data plan. critics say that could change

pricing to access for different websites and services. it has been a record-setting holiday for amazon. more than 3 million people signed up for the amazon prime service during the third week of december. amazon says a record number of packages was shipped with prime. and another milestone for the new "star wars" movie. it grossed more than a billion dollars worldwide. box office receipts surprised executives who bought the franchise from george lucas in 2012. george lucas will be on charlie rose tonight for the hour at 7:00 p.m. eastern time. hear what he has to say about this new movie. foras been a rough year -- the pharmaceutical company's ceo just announced

this morning that he will be taking medical leave effect is immediately following a hospital stay for severe pneumonia. it's now down over 10%. earlier this year, their relationship in a pharmacy was called into question. ties.mpany has since cut .t has been a lot of drama what is the situation? this is a troubling development not only for him and his health but there's a lot we don't know quite yet. in the that he is hospital and has severe pneumonia. eighte not gotten in of on his condition at all and that is not unusual. there's a lot we just don't know because he'snly

the company in so many ways and ,epresents leadership committee but it is unclear how soon he could be back. who is in place right now? guest: they have appointed three executives into the role. the cfo, executive vice president and general counsel. there is a committee of three different board members overseeing that role and that speaks to the vacuum left behind. he really is the leader in the face of this company. they have also lost a lot of senior executives. guest: it is a well-known thing in athey operate decentralized way and mike pearson is the face of the company in a way that other pharmaceutical companies are not run in that manner. i think it will have to come

clear depending on how long he is out, whether or not -- you cannot obviously have three ceos. would this be a moment for the company and board to say we will transition to a new board given the controversy? since the pharmacy issue arose, there have been calls from various points, certain down,ts, for him to step for them to find a new leader. but they really see this as he held this company and he has been supportive. guy needs tod this stay on it has the vision to lead this company in to the next chapter. there is faith in him from a lot

of investors. everyone there was very much in favor of what the company was doing. there's a whole community of people who see him as the one able to take the company through this. there is not an obvious successor at this point. that: what did he say assured investors? guest: he was just getting into the details of the different products. many different quarters have different top products, so it was a chance to say this is where this product is going and they acknowledged some of the things they have to do. but what everyone is excited about is the distribution agreement a established with walgreens. here they have a legitimate model through a legitimate retailer and we can see how the

prescribing trends are going. i think there's a lot of confidence based on that. betty: thank you very much. that troubling development about -- it has been a troubling year for investors in high-yield debt. the bloomberg high-yield index is lagging the corporate bond index on a year-to-date basis. today, we have a closer look at the corporate debt market with our director of high-yield research. tell us some of the factors here. we did see some of the spread widened. in is that going to look 2016? guest: i guess it depends on the default cycle. what we are seeing in 2015 as we did not get a lot of actual defaults.

2016, even though we don't face a big maturity colder, you could see a lot of cash flow issues getting more accelerated in the cycle. side, investment grade your run-of-the-mill folks, your financials are a big part of your maturity schedule. as much not see incremental financing. year.n't see it next we have basically termed out most of the structures anywhere from aa all the way down to double be. betty: what about on the high-yield side? i think you can get worse

because you will see some bleeding into other sectors. energy was down, but we did not really see that a lot of other sectors. see a little bit of that start to get wet out next year, so you can continue to see the spread widening in the year ahead as the distress creeps out and the bid for the market has become nonexistent. betty: why is it going to bleed out? it has been contained and maybe that's why the high-yield implosion in some areas is not effecting. guest: the energy and materials

dynamic hurt overall performance. you will get negative flows. when you get negative flows, people sell what they can. you get a little contagion that way. betty: thank you so much. as we had toinder break -- you can get your business news 24/7 on bloomberg in newon serious xm, york, boston and san francisco on bloomberg radio on the rap or bloomberg radio.com. ♪ the only way to get better is to challenge yourself,

and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. >> welcome back to bloomberg markets. julie hyman has a check on

movers in the commodity section. >> steel prices have been taking a hit. we got chinese industrial production, we got some japanese data as well, all of this still stood -- still spell some pain. all of them lower. even those that make more of it refined products are taking a hit. it is down another 7% today, even after a couple of analysts came out past week and said the company's latest update was reassuring in terms of liquidity position. in addition we are seeing short interest. aoomberg terminal hitting record level on an absolute

basis. it shows you how high the short nearly 40% of this company shares sold short. incredibly high numbers, one you don't see very often. batting investors are this stock will continue to go down. sellss a company that apparel brands and candies. his accounting treatment for some joint ventures. now received a formal order of investigation. it did some restatements back in november and on that day fell by 57%. the company's problems are not over.

>> thank you julie. let's check in with our bloomberg news. pull that some of the people trying to travel and having problems getting there. 900 flights have been canceled across the u.s.. it is all because of a large storm system moving across the middle part of the country. one third of the cancellations is at chicago's two main airports. another police shooting has raised questions about the city's youth of lethal death of lethal force. federal authorities launched a civil rights investigation of chicago police after video showed an officer shooting a black teenager. the childhood home of former president bill clinton in arkansas has been closed. authorities are investigating a suspected arson case.

the home is closed until further notice. noticed amotorist fire around 3:15 a.m. on friday. the estimated damage took $20,000. after going up for decades, children have leveled off -- that is the current collusion -- the conclusion of a study from pediatrics. one of the greatest showman in basketball has died. meadowlark lemon of the harlem globetrotters meets fans worldwide. treasury auctions fell this year to the lowest level since 2009. wall street dealers and central banks pulled back from buying government debt. that shows the fallout from the recession may be fading. the same times it makes the treasury more dependent on private buyers.

news. >> much more ahead on the next half-hour of bloomberg television. job cuts and trading bonuses. there is one area of banking where jobs are still hot. some real talk from retail veterans, former men's wearhouse ceo joining us for his take on the retail 2015.

welcome everyone to bloomberg tv and radio. let's talk about a story on the bloomberg terminal. talks about how goldman and lose.an stand to he talks about what is going on here.

we talk about disruption as an overuse term. the financial community is being resulted -- being disrupted as a result of technology. company,ink of a small a new entrance, somebody more aggressive and taking over space. you see that in other industries, retail and media. they essentially believe that the most entrenched wall street firms will actually be the biggest tech disruption winners. they reached out to about 150 execs and investors. what it comes down to is this idea.

they believe there will be weugh time in the years as adjust to this coming wave of technology. we are talking about advising on the retail investment side. they will either buy, partner, or build applications on this. they are going to be largely winners from this and other will -- and other losers in the world of finance. most aggressive tech companies will actually win. >> we are talking about trading platforms or stuff weirder them that? .> it is all of the above the technologies people are talking about us the most onceble in the near term,

you get a certain level of automation you don't know what the next level uses going to be. obviously equities has done that for fixed income. we are talking about the use of our rhythms to do a lot more than is currently used. in terms of client satisfaction. on the retail side you are talking about increased electronic in terms of automation of investment advice. been --l like this has they have been hammered, lost a key partnership, this survey showed they will be one of the big losers. >> that is the impression. largely based on this is going to get wonky, but their interchange rate is the highest.

if you are the opposite of a cost leader in the industry, and they have a good reason to have a higher class of customer, if you are the most expensive player, pushing down across the board, then your business model is perhaps the most at risk. it seems that the investment advisory business is very much threatened by these robo , very low fee allocated funds. browse see the for road to charge high fees on asset management. is an example of why banks are going to be ok. each of them have 3 billion in assets under management. they are going at a very high a

rate. the biggest winners in the future five years from now could very well be morgan stanley. it could be one of the other big firms. this is a case were one of the little guys introduces this technology and does all that hard work. then the big firms actually co-opt this. because they have access to all the clients, they will probably end up benefiting. >> except that it threatens their golden goose. hard for them to say we have this thing that won't charge big fees at the ripoff banks. there is a problem with having that offering. >> ike see how it can be perceived as a problem. andou have millions millions of dollars you are not going to better men and say this thing that is mostly clear --

mostly geared towards millennials, i'm going to throw all my money there. you still want a human being if you want that vaunted network. >> there are different levels of service. folks don't want to talk to somebody, then there are those. it has to be difficult for these financial firms to embrace a variety of services area >> they to it as the gateway drug their fully fleshed out service. to start this, do automated investing. get tolucky enough to the point where i am actually looking for $1 million, that is when the human being steps up and says you have other issues.

we can look at the totality of all your needs and think of a better way to serve you when coming to merrill lynch. >> i wonder if these acquisitions are going to happen when the market takes a turn downwards. or if it is the glory days when these acquisitions pick up? he 16 is heard what going to be a big year just because all of the forces going on. this is potentially the part of the lifecycle where you see them fold. when you talk about marketplace lenders, like lending club and some others. maybe there are 200 kinds of these marketplace lenders. you are going to see a lot of consolidation. a lot of them are going out of business as they pull the plug.

there is a lot of desire to pick up that capability. >> you are going to start to see a lot of pilot programs rollout by a lot of different banks. howget an idea of technology is further changing and disrupting the financial community. thank you so much. bloomberg.com to read more stories and learn more about financial technology disruption. you are listening to bloomberg on radio and tv.

>> welcome back to bloomberg markets. a beautiful day here in new york city heading towards a final days of 2015. time for a look at the biggest business stories in the news right now. the executive chairman is stepping down. james moffat cofounded a mining company. the announcement follows recent elevations that carl icahn had taken a huge stake. will become nonexecutive chairman. and fedex being hammered on social media for missing some christmas liveries. thannies blaming less expected shipping volumes. residences are getting top priority. now let's get a check on stock moves here.

all the averages are lower at this point. we are holding steady here at the lows of the session. liveil doolittle has more from the nasdaq. abigail: apple wants again is the biggest point influence on the composite index. -- certainlyng acting as a drag. in playpressure is back here as the stock has its worst month in nearly two years around concerns of iphone demand. as those early to that call downgrading shares on those concerns last summer. the street is now to bearish on the march colder. been a very volatile six months. for apple, it will be interesting to watch. turning to the china base stocks, others are down.

perhaps some sympathy with the shanghai composite, having its worst day in more than a month as investors worry that nearing the end of a six-month dan of sharing by shareholders with 5% stakes could play a toll similar to last summer. it will be interesting to see if this is an early signal of selling pressure to come. >> thank you so much. volatile in the holiday season. explaining away lackluster results. holidayg to mastercard retail sales grew a solid 7.9% this season takes to this late search and shopping. joining us now to talk about the winners and losers this holiday season. why did it turn out better than expected?

>> going into november, things were looking very good. there was a big surge that really helped drive that. surprises,some women's apparel did really well. we talk about women's apparel struggling. there is no new innovation in fashion. there is a believe there was some pent-up demand and the weather did turn. it got a bit colder. men's apparel, not as good. still a decline there. women's apparel was a big surprise. furniture was another surprise. that is a durable good. it shows you are confident, you are -- you are going to have a job six months from now. >> why not luxury?

jewelry didn't do well. >> really high-end luxury watches didn't do well, jewelry didn't to well. we talk about tourists coming into the u.s.. sort of a postrecession consumer not wanting to have the most expensive handbag or most expensive watch, and instead putting their money elsewhere. people putting their money in experiences, dining and travel. >> was this a promotional season? >> it continues to be a promotional season. >> we are going to have to see some big discounts for spring and summer. >> on the retail world, let's

get more retail wisdom. you recognize him by his voice splitting with the company. detailers nationwide network of on-demand professionals. i know you are going to be working hard on new year's eve. officiating two wending -- officiating two weddings. >> two couples we have. >> are you glad you are out of the retailer or are you glad you are out of the store business? ricksm glad i am out of and mortar. online is surging. >> why's it so difficult? >> we are over stored in the united states. i think now that online apparel hasfinally caught on, it

become evident that the country is over stored. >> shannon was talking about all these promotions. how do you mean consumers off? why is it hard to wean people off promotions? >> there is really not much more you can do. they did try buy one get 73. but that became a parody on saturday night live. there is no integrity to that types of pricing. >> is it wrong to wean people off of emotion? we were a private company when we did that. difficult to have that as a public company. >> a long experience in this

industry. we heard a lot about the department stores and how they struggled. >> in the interest of full disclosure. company, we have a contract with macy's, bloomingdale's to do tailoring for their online divisions. i think a lot of the big department stores. movementg from the into online. >> which is why they might want a service like yours. >> absolutely. it is a way to take in an old paradigm business and make it a new paradigm business.

>> now that you are tackling online retail, what do you think of an online basis? i am now in contact on my new business. what i noticed about talking to amazon's they move lightspeed compared it to macy's. they can get a test from design to implementation in 30 days where macy's would take six months. are you taking from that? how are you going to apply that to your own online business? >> what it means is the world of online commerce means that everything has accelerated.

i used to love the idea of deferring decisions until the last possible moment. advantages ofthe making quick decisions. >> who's the retailer you most admire right now? >> without question it is apple. >> good to see you. we will see you on tv. much more ahead on bloomberg television. -- for whatwith will be the biggest macro risks.

>> welcome to bloomberg markets.

from bloomberg world headquarters in new york, here is what we are watching this hour. crude oil starting the final trading week of the year, giving back some of last week's advance. is it a sign of further selling in 2015? chop -- and and shopping. retailers seeing plenty of green this holiday season. and the best wall street jobs for the new year. we will tell you which jobs are poised to pay off. to head to the markets, that is where julie hyman has a check on the trading just -- on the trading after big game last week. >> last week it was up, this week it is down. so goes the markets.