from bloomberg world headquarters in new york, i'm betty liu. markets are swinging lower as they start the final trading week of the year. crude oil is dipping, giving up some of the christmas gains. the continued oil prices, taking a look at the trend that will dominate next year's trade. candy and drugmaker surge ahead. getting a check on where the markets are trading. >> still a negative on the session but the dow has been

doing the best throughout the day. in the wake of the big star wars weekend, we're seeing some declines driven by oil prices that are pushing down energy stocks. oil falling after having an up week. is now pulling back and stocks are at their highest of the session. we see them around the lows of the session, down by more than 3%. we see a very tight correlation for oil and stocks. years-this goes back to -- two years. off of stocks coming up the lows. it is something that has really been weighing on stocks. betty: tell us about some of the movers. there are interesting

movers to talk about. copper and gold have been one of the big under performers for the year. trading lower today but the company is announcing one of the departing the company from his position as chairman. they have been struggling. another we are watching, the former sallie mae lender. .he company falling sharply the liquidity position is still sound. after michael pearson went on medical leave according to the company, he came down with a severe case of pneumonia.

currentt disclosing his status or where he is at this point. a hospital said he was hospitalized. his leadership is bound up closely with it, he is seen as an important leader. ashas held the company they've had the strategy of buying companies and raising prices on some of the drugs. that is a strategy that has come under scrutiny. let's check in on the news this afternoon. we have more from the news desk. >> the grand jury will not indict a white police officer in the killing of 12-year-old tamir rice. he was carrying what turned out to be a pellet gun. the prosecutor said it was

indisputable the boy was drawing his weapon when he was shot and killed. a setback for the islamic state, they have recaptured a government complex that had been held by the islamic state since may. they were helped by u.s. and coalition aircraft. buses, transporting evacuees into lebanon. of the truce deal reached in september. the battleground areas will see the transfer of thousands of shiite and sunni civilians. of formerood home president bill clinton in arkansas has been closed after authorities investigate a suspected arson case. the estimated damages $20,000.

bush speaking today in palm beach, florida. when asked what he would say to will take you on one-on-one in a debate anytime, anyplace. you name it and i will be there. the next republican presidential debate on january 14. than 150 news viewers around the world. china rattled markets with a surprise valuation of its currency. at my next guest says to get ready for more in 2016. for more on not just the outlook on china but the rest of the world and the new year, president and founder of global strategies joining us from l.a.. we are asking everyone. what would you say are the

biggest risks? >> to significant risks. one is the day we have had with , zeroterest rates interest rate is no longer going to be the case in the united states. we have already had one hiked rate. they are talking about further increases. i have long believed that the major impulse has been the being able tof borrow it at very low interest it hass the reason why been so much of a market rally. we're going to face the consequences of the market discussion. it is on the domestic side.

it is something like 30% of global growth in recent years. we sought the shanghai index fell by almost 8%. industrial profits are dropping. compared with the same month last year. and the chinese are going to have a great temptation to weaken the currency again. betty: we will likely see more devaluations. even if you're worried about with going on domestically and what going on in equity prices, there is not a lot of places to put your money. 2015 of theat different asset classes, you

would have lost money in treasuries. and in commodities. the only place you could he got out again is in the s&p 500. >> you're correct saying that if you follow the fed and the zero .nterest rate it the tide is turning because the fed is no longer saying they would maintain that. yet to change the approach where you have had two. and despite the fed having hiked interest rates, it is a 10 year yield.

my expectation is that it will go below 2%. where do you make money? high-grade paper. u.s. treasuries. i'm trying to understand. yearould have thought this or last year, it would've been the years to go to treasuries. >> when the treasuries went as high as 235, 240. that.id twice after if you had ignore the consensus , that would3.5% have been a capital gain as the

year went down. and if you buy the 10 year orasury and it goes below 2% 1.5%, you will make money again. let's say the yield does fall. does that affect the fed? >> it is saying that the forecast of economic growth is picking up and the fed forecast those kinds of forecasts are not going to be met. , it says the bond market's giving two thumbs down on the fed's and its policy. -- on the fed and its policy. it's impossible for janet yellen to say that she expected to go to 2%. the fed has been saying that for several years even though the target has never been made.

betty: does it say that the economy is slowing down and with the 10 year yield, it is headed to a recession? >> i don't want to use the r word yet, but the economy is slowing down. they do not believe the 5% thanloyment rate rather looking at the falling participation rate. look at the young people forced to accept our time jobs because they can't find full-time jobs. those are some of the signals coming to you. thank you so much, the founder of sri-kumar strategies. including more on oil, coming up. ♪

betty: welcome back to bloomberg markets. it time for the bloomberg business flash and a look at some of the biggest stories in the news right now. executive chairman and cofounder of a mining company is stepping down. helped form the company in 1969. it follows the recent revelation that carl icahn had taken a huge stake in the company.

ford, becoming nonexecutive chairman. a surgeon shopping and demand for women's business clothing. retail sales up 7.9% between black friday and christmas eve. it excludes autos and gas. of reporting figures for all november and december up 4.6%, slightly better than estimated. formal investigation from the sec, they sell apparel brands such as candy, joe boxer, and massimo. mark zuckerberg is making a personal appeal to india to allow free internet service. it allows customers to access suchook and other services as job listings from their phone

without a data plan. it could change pricing for access to different websites. the markets very closely this afternoon. trading lower but off of the lows of the session. ♪

betty: welcome back to bloomberg markets. the plunging crude oil prices not too bright for oil. of had to make some big changes. head formorgan global oil producers in 2016.

>> rarely going to look to the bond markets to finance some of the shortfall. we have to keep things fairly stale -- stable. there's a larger geopolitical conflict. iran can really put pressure on them. >> i think there's definitely going to be further downward price pressure. countries, not just iran but also russia. is looking at bringing back in income tax for the first time in 35 years. in alaska where subsidies are paid directly to citizens, they can be a real shock.

what happens to asset prices when the gulf states no longer have all that money to invest. and allow them to buy not just fixed income, but starting to go heavily into private equity. that tapping the foreign reserves will result in safe haven asset purchases by these commodities. you will see that as demand and higher quality assets. it typically has correlated to u.s. treasury levels as well as the current account deficit. what we are projecting is a 30% decline in foreign interests. it is a pretty significant

decline. >> do they have real estate? large hotels? asis it instruments such treasuries? enough are sophisticated to recognize that if you did have a big drawdown, you have liquid securities and there are more strategic investments. i wouldn't expect to see that type of thing being liquidated soon. if you look at russia, there is erskine keep going for another year. >> the global head of fixed income. for a looklower but at the options, here is julie hyman. joining me is the

derivative strategist at in km holdings. ,he trade that he sent us today we have been talking a lot about retail today. you been talking about the mastercard numbers. arniture was kind of surprise. you're looking for the next catalyst. there is a conference coming up. talk about wyatt can be important for retail. >> 11th two the 13th. it is really the next and first catalyst that will get a very good look, potentially at holiday retail sales. she is saying that 55% of retailers have been more aggressive on sales around christmas. a slightly negative data point there. be on the cautious

side. ross stores, for example. you put it into that potential catalyst. or set up some shorts. julie: i was looking at the year to date concerns and retail has done well this year. partly because amazon and netflix are the two best performers in the retail index. so how do you work the trade when you are looking at that retail conference and timing at. >> the retail index up almost 15% year-to-date but at rt is the spider retail etf down about 8%. it is what technicians have focused on. the components all get the same weight.

look at amazon and others that are performed well and are highly weighted and driven that significantly higher. think it product, we is where broad weakness will show up. options are a little bit elevated but we are ok with that. conference, but a bit of earnings that will come into february. we are paying a little bit higher than we would like to. volatility, we like that exposure. and if you are wrong? >> if you are wrong, you risk about $.65. a very finite risk to position for that downside. julie: thank you so much for

joining us. very timely given what we have been discussing today and the holidays. we have more bloomberg markets coming up. stay with us.

♪ betty: live from bloomberg world headquarters, i'm betty liu. this afternoon, we have more from the news desk. >> first of the latest in the fight against islamic state. andrussian foreign minister secretary of state john kerry talked by phone today. not beid there should any preliminary conditions to set up the coalition to fight the islamic state and other terrorists. a talked about other plans to solve iran's nuclear program issues. anti-russian sanctions do not help build cooperation.

another police shooting has raised questions about the use of lethal force. officers shot and killed two people during a domestic disturbance. federal authorities launched a civil rights investigation of chicago police after a video showed an officer shooting a black teenager 16 times. the security administration is increasing random checks of airport and airline employees. it follows instances where staff used restrictive instances to smuggle guns and launder money. workers are permitted to skip security lines after undergoing a background check and attaining a special badge. thewhite house says canadian prime minister justin trudeau will attend a state dinner. he and president obama will focus talks on energy, climate change security, and the economy of that visit while president obama was vacationing in hawaii.

many new england lobster men are fishing well into december. fishermen and dealers say more votes than usual are on the water because the warmer weather conditions are still good for traveling. it's else for eight dollars to $10 a pound which is typical. global news powered betty: let's go to abigail doolittle live at the nasdaq with the latest. we've got just a few minutes left in the session. can we make it to the green? probably not. : two big sector stories have emerged at this point. biotech is selling off and we big strength in some of the

internet names. all the big names are participating, but the truly big story is chimeric's. to antiviral drug failed meet the goal in a late stage study and the shares are trading at a record low. plenty of downgrades out there. has maintained their over weight rate. topon and alphabet, both performers here today on the year. amazon is a more than 100%. betty: thank you. much more ahead on bloomberg markets. valley on pharmaceuticals being run by committee now that the ceo has gone on medical leave. can the team keep the drugmaker running? ♪

betty: back to bloomberg markets. it's time for the bloomberg business flash, a look at some of the biggest business stories in the news. it has been a record-setting holiday for amazon. more than 3 million people signed up for amazon prime services during the third week of december. amazon says a record number of packages was shipped with prime which allows unlimited shipping for free. u.s. regulators say passenger-side airbags must be fixed in honda crv's and the subaru legacy and outback's. that could affect more than 450,000 vehicles. at least nine deaths are explained -- are blamed on explosions caused by the faulty airbags. itsed airlines is changing policy on kids traveling alone. a $150 fee will be charged on children flying solo.

it was previously only charged up to age 12. the latest star wars movie broke the $1 billion mark for fans in china could even see it. the film opens in china on january 9. it took 12 days to earn a billion dollars worldwide, becoming the fastest movie to achieve such a feat. that is your bloomberg business flash. pharmaceuticals ceo is putting his health first, taking a leave of absence after being hospitalized with a severe case of pneumonia last week. that second shares today with the drugmaker being left in the hands of an executive team.

what do we know? what's the status update? we know that he is hospitalized. we don't know if his condition is good. i think we need to fix your microphone. there is a committee that has taken over. is it treading water? this company is in crisis mode. we have an executive committee and that a board committee helping to oversee that executive committee, so we have six people helping to stand in while he is hospitalized. this comes at a pivotal time for this company.

they are trying to recover from their scandals to the distribution network and a substantial drop in their stock price. you are trying to replace the guy who is the architect of the strategy and he is in the hospital, being filled in by some folks who have not been at the front of this company and who have not been the guy everyone is counting on to turn this country or read it -- turn this company around. is and he essentially the guy who got them into the struggle in the first place? way, because of their leadership style and there's questions over whether he had the type of oversight and really knew what is going on. natural successor in place were obviously next person to take over, so looks like there are no checks and

balances in the company. it has always been a question. governance has been questioned for quite a long time and this underscores that there wasn't anyone that could step up and take the reins just for a short time. this is also bad timing in that they were starting to get a little out of control? they announced a deal with walgreens that they were replacing their old network. month or two ago, we were looking at a stock price of $75. they will go down 10% today on this news about here some the uncertainty of when he's going to be back.

most: some of the prominent shareholders -- have we heard anything? guest: right now, i think everyone is respecting his privacy and hoping we will know more about his condition and how the company is going to be run. for the time being, most investors are waiting on the sidelines and most importantly waiting to see how he does is ugly. betty: what are the expectations for valeant? what is the big move expected out of him? guest: i think there are a couple of things. first, clean up the mess and reestablish distribution channels for their drugs. the next thing i think investors will be watching is ensure they can continue to grow on the next thathave without using

controversial channel and that they can do it without relying heavily on price increases. are they going to do another deal? at the same time, they are carrying a ton of debt. what you have to watch right now, assuming pearson comes back, do they continue this path of pivoting from scandal to a lot of m&a to a company that can grow on its own merit and turn into a mature come a still growing business. thank you very much. certainly a lot of drama on this company. we are headed for the close of trade in just about 20 minutes time. here's a look at stocks near their 52 week high this final week of the year. ♪

betty: welcome back to bloomberg markets. currencies have had a tough year with exchange rates in turkey, south africa and brazil, all falling at least 20% against the dollar. joe weisenthal joins me because you are going to be talking about this and why exchange rates still matter. joe: for the last several years, currencyard the term wars a lot. this idea that every country wants its currency to be weak and to stimulate exports.

all the countries have weakened their currencies. but it hasn't exactly resulted in any growth. itone is quite certain and data to suggest exchange rates still matter and if your currency is weaker, you will get an export advantage. we talk about this all the time -- this will make them more competitive next year, but does it actually work? is it more effective for some countries that others? joe: it's very complicated. one of the arguments people make is we know that if you buy something from vietnam, you're not just by a product from the amount. it might come from china or

somewhere else. global supply chains are so interconnected that -- another good example is canada and mexico. canada needed to weaken its currency to make it more competitive to export against he u.s. but parts come from so many different places and there are so many factors that it is hard to isolate what is the currency of fact. currency do know the evaluation is an element of the volatility we have seen in the markets. is that going to be more of a pressure going into 2016? joe: this gets into which way doesn't cut? you mentioned emerging-market currencies. their currencies have collapsed and that might be good for inort that volatility

general at that level of intensity is not good for anyone's confidence. if weaker currencies are going to help, you want something little more that does not induce a panic. betty: people are looking at the big one, which is china. net, what's going to be the impact? think as the current -- as the currency is tied to a basket of dollars, i .on't think that will help as china unshackled itself from the dollar, they will have more control over their monetary more economic liberalism, which people regard as a good thing. betty: thank you very much. joe weisenthal, cohost of

"what'd you miss?" guests today will all be talking about trade and currencies. we are about 18 minutes away from it close of trade. starting with the major averages -- we have been tracking the price of oil but we are coming off the lows of the session. points.is off by 33 it had been off by 100 points. we have been tracking oil, so let's look at where oil prices are. nymex down already by 3.5%. brent crude -- look at that spread. that is down 3.4%.

yieldasury markets, the on the 10 year has not budged. the yield is coming down again. carol: welcoming our television viewers to "taking stock" right now. china backed the united states for the last couple of years but keeping a big focus on china, there's so much going on. along but let's talk about this new counterterrorism law. guest: the chinese had just

passed a new counterterrorism law which someone it was of his early stages got a lot of criticism from foreign countries and the u.s. government. foreign technology companies operating in china, a lot of people are concerned it would force them to hand over proprietary information, including their codes to the chinese government. that might be handed over to chinese competitors. there is a tension on the one hand that the chinese state's role as regulator and the role of competitor may force a lot of technology companies he see china as a huge opportunity into some difficult choices. kathleen: act in march, president obama said china will install backdoors in u.s. company systems and that asian

nation would have to change provisions like you have to do business with the u.s. put the same kinds of bars on us? do they already exist? guest: i'm not the kind of technical expert to know exactly part of a it is broader story in china. if you want to do business in china and certain key sectors, you have to enter joint ventures or engage in what they call technology transfer and give up some of the information. over to chinese competitors, that has been a condition of doing business in china. it's not supposed to be a

condition but it has been and it has led to a lot of protests from companies that say it's a protectionist practice. it's not in conformity with existing rules and that's one of the reasons people say china is being excluded from the transpacific partnership. kathleen: you touched on this already -- so many countries want to -- so many companies want to get into china. the shanghai composite was the best-performing major global index this quarter after the government agreed to halt the equity route to stabilize the stock market. work? stimulus going to guest: i'm not on board. i've read some of these articles

saying the shanghai index is up all the roller coaster rides this year, maybe things are not so bad. i have my own personal benchmark which is a company that i won't name but invested in many years ago as a privately -- as a private equity investor. traditional steel casting company, nothing fancy about them. customersir biggest is caterpillar. they are trading at 150 times earnings. typical, people in that -- people may be in that market because the government is propping it up but not because of the underlying performance of the economy. let's turn to monetary policy.

the u.s. is ready to raise interest rates more this year if the strength of the economy supports it. the people's bank of china saying it wants a stable currency, though some people think they want it weaker to aid exports. how is that going to play out in what does it mean for investors? it depends whether the fed's pathway causes the dollar to strengthen. the dollar has not strengthen in response to the initial rate hike because a lot of it was priced in. the chinese have given a clear indication that they are not on board. engage in aant to sudden and large devaluation against other currencies but they do not want the chinese

currency to rise along with the dollar and that's why they decided a week or two ago that instead of taking to the dollar, they will take to a basket of currencies. as they depreciate against the dollar, we will depreciate against the dollar as well. kathleen: is brazil beaten up so badly that it is time to buy brazil? i went to brazil with that question in mind. you want to look for the contrary an opportunity of something that has been out for so long that now is the time to buy. i have to say i don't think it is -- i don't think the bad news has reached its logical conclusion. it's going to be difficult until they get a new president, regardless of whether that's through impeachment or waiting around until the next election.

it's not even whether you like her policies were not. she's become so politically wounded that the political system cannot respond in any kind of live way. kathleen: that is the president of brazil, definitely a beleaguered president. argentina? is it time to pop in there with your investments? guest: i may have to pop in and take a visit. , a do have a new president new group of leaders who will come out with new policies and if you look at emerging markets in recent years, not even emerging markets, it has been india on the prospect of reform, it has been japan on the prospect of real reform.

that comes true, you will get the anticipatory a goodnd now might be time to look at that as a rebound story. kathleen: if you look at broad asset classes come by u.s. stocks, the rally continues to -- is a commodities play there some class that you say is a sure bet? guest: unfortunately, nothing is a sure bet. almost every asset classes richly priced. our constructive about the u.s. economy long-term but not that optimistic as far as strong gains in the u.s. stock markets until we see earnings really come back. says not a logical shift to

then we will go into bonds because bonds are highly price as well. kathleen: thank you very much for joining us. thanks to our bloomberg television audience. this is "taking stock." ♪

scarlet: we are away from the closing bell. .oe: i'm joe weisenthal alix steel is off today.

[closing bell ringing] u.s. stocks closing lower and volume on the s&p, 42% below this moving average. joe: the question is "what'd you miss?" can you still do value your wage growth? -- whating world that the fiscal situation means for global economies going forward. scarlet: and the biggest risks in 2016. you'll hear what they feared the most as we bring in the new year. we begin with the markets. after closing out with big gains, we have given back some of that. there's not a lot of catalyst to go on as everyone on the street takes the week off. joe: we did have a bit of the selloff that not dramatic.