here is what we are watching this hour. foil about to close out 2015 below $40 a barrel. we will take a look at how low crude prices could go in the year ahead. then running out of time and money -- puerto rico about to default on payments due tomorrow. and we look at the winners and losers in technology and media. first, we want to get a check on are already inwe the final day of the trading year. julie: earlier, it looked like it was going to be sure that it

would be down a quarter of a percent for the year. scarlet: down to the wire. julie: very exciting. it's been sort of paring its declines as the day has gone on. like it has for so many days this year, particularly in the last quarter of the year. it is tracking oil prices. take a look at the bloomberg terminal. earlier, we had a it in oil. take a look here. here is the s&p 500 in white. here is oil, the trajectory going right along with stocks. that is quite common. we have been looking at this correlation between oil and the s&p 500. chart. about a 2.5-year that correlation is at about 0.4. not an exact correlation, but a relatively high one. and we see it anecdotally, that the two are moving and chan --

in tandem. scarlet: what about natural gas here? it tends to move on weather and the weather has gotten a little bit cooler. julie: natural gas has had another pop today. it fell sharply yesterday. it is a bigoted a, up by 7%. the gains -- it is up again today, up by 7%. you see all of the gains coming at the end of the month. the fact that natural gas is starting to gain has been putting pressure on utility stocks. in today's session, we see some of these companies lower because their cost for natural gas is going higher. that is one of the drags on the major averages today. checkingwe will be with the julie a little bit later for individual movers. first move.on the

ramy: rainy weather slows combat operations. russia has begun a major modernization of its navy. expand to thell country will expand deployment of its most sophisticated cruise missiles so it can be used for a caps on land as well as the seat. -- the sea. here in the u.s., more than eight and a half-million people sign up for individual health plans through the affordable shoppinggovernment-run market or had their policies renewed. nearly 10 million people will be plans by the end

of 2016. the state department is set to release a thousand pages of hillary clinton e-mails today. scarlet: thank you's and much. coming up in the next half hour, plunging oil prices. we will take a look at what is ahead for crude prices in 2016. defaultto rico about to on bond payments due tomorrow. we will look at what he could meet for the future of the island's economy and for its residents as well. and looking for the best and of 2015.forming assets commodities run across the board. but there were some that did manage to close up with gains.

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scarlet: welcome back. commodities blew up in the second half of 2015. take a look at the bloomberg commodity index. it else around but with little change through the end of june. after that, the bottom fell out. the index will finish out about 25%. barrelding below $50 a and then below $40.

it is now at $37. brent is trading at roughly the same price. both are at their lowest since the 2008 financial crisis. andrew, before we get to the outlook, brent and the bti trading at the same price. there is a symmetry to that. what are we to make of it and how long can it last? andrew: i think it has a lot to do with the recent lifting of the u.s. export fan. it doesn't change too much fundamentally. on the burnside, you do have some elevated output. still barrels coming out of the north sea from investments made prior to the downturn in 2014. still buoyant production in africa, too. that is pressuring from the print side. lifting of thehe export ban in the u.s., which brings the bti more in line with brent, too. wti more inbrings

line with brent, too. so it is pressure on both sides. scarlet: what are the expectations for 2016? if you look at the forecast, it runs the gamut. andrew: that's right. it was around 53 for average for -- it waste wti around $53 for the bti. there's a 40% rally for next year. expecting for balances to tighten in q3. we find that hard pressed to happen as the auto market enters 2016 and ins 2016 at the same tune of oversupply. the recovery may be pushed somewhat to 2017. scarlet: people are talking about more pain before we

stabilize in the second half. andrew: this year, we will grow demand around 1.6 billion -- 1.6 million barrels. next you, that shifts to about 1.2 million. if you draw corollaries to the mining sector, china pulled forth so much demand and, for us ,o rely on china going forward you also look at the fact with the demand has done this year. it is not all organic demand. it is stockpiling can so it is not true organic demand coming from china either. scarlet: that is a good point. what should investors be thinking about when they look at investing in the energy sector? -- it may be poised for recovering 2017. from the equity standpoint, should you be doing homework on drillers or emp company's? -- companies?

andrew: on the drilling and services side, they are looking at a 50% increase in the u.s. i think a lot of the pain that is to come next year may not be expected right now or discounted to a certain extent. just as you look at expectations come operating, performance does, estimates, p lyons that basis. on the emp side, if you get you really have to start looking at whether these companies will take down production forecasts. you know when companies take down production forecasts, the market doesn't like it. i think investors will be paying a lot of attention. scarlet: thank you so much. alexander padilla said that they

faulting tomorrow. joining us now with more from washington is daniel hansen, a geopolitical risk analyst. everyone knew that puerto rico would default. it was not clear when or how. 37 millionabout this dollar default. it is not massive but significant. alexander: even though most investors are going to get paid on january 1, most of what is happening here is that the funds that are being expended are either coming from revenue streams that are dedicated irrevocably to the bonds. or they are tapping debt service reserve fund which has been held interesting for situations like this. they are pay most of what it owes on generate first, but not out of resources from the commonwealth.

it is paying out of money held in reserve in case the commonwealth is not able to make payments. use the can puerto rico same playbook in may and june when a bigger payment is due? daniel: for a third a puerto rico's debt that comes due on july 1, those debt service reserve funds will be there for the payment the comes through. the puerto rico will still have to come up with $1 billion in debt service that is constitutionally backed that comes due in july 1. a hundred million dollars in may that is also can't just do shall he backed. those payments have to be made there the puerto rican -- is a hundred million dollars in may that is also constitutionally backed. those payments have to be made economy.e puerto rican

experiencing pressure from his party to lead puerto rico in good shape. thes unlikely you will see governor burn the country in -- i think sufficient leverage to rein in the governor, even though he is what you call a lame-duck. scarlet: what action is needed from washington and likely to be taken? daniel: congressional republicans have place to come up with some kind of plan for puerto rico by the end of the first quarter. it is unclear what that will look like. there's not much agreement in congress, in the senate or in the house among republicans or democrats or even intraparty about what should be done. what will most certainly happen is congressional republicans will decide that a control border some kind of advisory council is a good idea for puerto rico.

board or somerol kind of advisory council is a good idea for puerto rico. whether or not republicans can get together on these issues into together a package that helps puerto rico remains to be seen. scarlet: thank you so much, daniel hansen, for laying out the path for us for puerto rico and the u.s. government. we've got much more coming up on bloomberg markets, including the best and worst performing assets in 2015. . ♪

scarlet: it is time for the bloomberg business flash. -- mortgage rates rising for the first time last month. the fed decisions to raise interest rates pushing up home loan costs just before the start of the peak selling season. consumer confidence increased last week to the highest in two months.

americans shopping for the holidays were the most upbeat about the buying climate since april. they were also more positive about the national economy as well as her personal finances. and the price of hamburger likely to get cheaper. as -- the up mate at -- up mee americans are eating less burgers to begin with. that is your business flash update. julie hyman has a check on one mover, apple. julie: imx a having a burger for lunch today. it wasn't 10% cheaper though. apple is down one and a quarter percent. there have been a lot of demand in thet short term for the iphone and then what the next piece of growth is going to be for the company.

where is it going to come from post iphone? here is the one-day performance. the one-month is also notable. it is the worst month for apple since january 12 14. back.t and looked december isn't a strong month for apple. finally, the year to date for apple also negative. not a used a klein, down about 4%. nonetheless, -- not a huge decline, down about 4%. definitely a week year for apple. weaksts -- definitely a year for apple. this is a two-year chart. green are the buy .ecommendations going up

here is the average target price. we haven't seen that many analysts cut their target prices for the stock. so that gap has been whitening. scarlet: thank you so much. we want to stick with this in that, what apple does obviously has great interest for the telecom companies. it should be an interesting one for this sector. are seeingg carriers stagnating subscriber numbers. they will have to find new ways to brother bottom line. john butler is a senior analyst for the sector at bloomberg intelligence. we have seen the numbers from apple that there is a maturing market in the u.s. and that goes for the telecom sector as a whole. john: it is amazing for me how quickly the wireless market saturated. it is one of those things where

wireless resonated with people, having portability of your phone and ultimately the internet was a hit. the price you pay as a carrier is where we are right now, which is over 100% of the population has a wireless device, one or more. so the trick is how do you grow? how do you go from there? and the answer for telecom ultimately will lie in content. the right now, we are at that inflection point where that business is still quite young. at&t bought directv. what they were really after is content rights. verizon came out with a great new streaming app called the go 90, but it is still early days for the telecom guys. scarlet: in the meantime, telecom operators will have to rely on pricing to hold on to their market share. so the price were remains intact. do we look at t-mobile as a

leader here? john: they are. they instigated it back in 2013. a lot of people who watch of the eger, he is an l bit of an industry bully in the eyes of some. of he has done a good job making t-mobile this hip, cool brand on the consumer side. in thathe consumer side they offer more attractive pricing than at&t and verizon. the reason is they can't really compete on the network. they don't quite have that high-quality nationwide network that the two big guys do. scarlet: let's talk about spectrum. it is one of the most valuable resources out there. we have a big auction coming out in march. he will pick up some share? john: that is the big question. who is really going to play in a big way? you willnumber one, see at&t in there in a big way.

they said they will be there and they will. t-mobile, same thing. they need to build out that nationwide network. and they know it. little is going to be a more selective, which is interesting to me because, if you look at the four big carriers, at&t, verizon, sprint and t-mobile, verizon has the least amount of spectrum per subscriber of all four. interesting to me they will cherry pick the markets. but i think they will engineer around some of those capacity issues as opposed to buying spectrum out. scarlet: thank you so much for perspective we need in 2016. and gobroaden our focus from sectors to asset classes. from the rot in commodities to the plunge and high-yield credit. and a u.s. market that didn't do much of anything. where exactly were the bright spots?

certainly, it is not in commodities. if you look at how the commodity page translates for the end of the year. lots of red across the screen. julie: right. you break it up it in energy, agriculture and our virtual sure was the only plate -- and agriculture is the only place where you sigh little bit of gain. and agriculture is the only place where you did see a little bit of gain. so not a good year for the commodities space was again. you can see at the very end here at the bottom is the .ugar and cotton fiber when it comes to cotton and sugar, is it weather-related, demand related? littlei think it is a bit of both. you look at countries in latin america -- one of the things happening down there is what

will fit into what sugar and con prices will do. otherwise you have the energy space and whatnot -- russia, east.e middle you do have the demand started to feed into it a little bit as well. scarlet: the demand hasn't helped, right? julie: parade. scarlet: and 20 -- julie: right. scarlet: in 2015, there was a recovery. was a the restructuring little bit more good than what people expected. but their stocks didn't do well. you still have geopolitical woes over there. the commodity space isn't helping them at all. ukraine bonds did well despite all of that news. scarlet: and brazilian bonds really tanked. where --like a train unlike in ukraine, their bonds

did not do well and there are stocks did not dwell. -- did not do well. smalla is a rather market, but i did more research on it and i guess a bunch of companies over there have profits rising a lot, like in the united states where you see a little bit of a profit recession the people are worried about. not the case in jamaica. scarlet: so they have some organic growth over there. we've got much more coming up on bloomberg markets. keep it right here. they have the s&p 500, dow and nasdaq in the red at the moment. gain ofhanging onto a 1.25%. ♪

2015 was a year full of headlines. we saw the u.s. unemployment

rate the client, global oil prices tanking not seen since 2004, and the federal reserve raising interest rate for the verse time since 2006, almost a decade -- for the first time since 2006, almost a decade. some of our guests what they think the biggest risks are heading into the new year. the 20 heu look at 16, what is the single biggest risk? -- 2016, what is the single biggest risk that you see? risk in thest economy is further deflation in much of the world economy. >> we have this thing called the virgins. .e are converging policy and that, in my opinion, is the biggest risk. >> the convergence between geopolitical risk and the economic risks that i am worried about because that would be to dealt for leaders

with. >> a significant upturn in u.s. inflation. numbere is a very large of companies that have used a interest rates in the united states to fund themselves and some of that funding has not gone to the right places. >> the big game changer for us in 2016 is rates. do get my point, like i was saying, investors pay a little bit more incentive on the balance sheet. >> the biggest risk comes from the united states. we have a dollar overshoot. that will bring up the chinese r&b simultaneously. renminbie simultaneously. >> we don't have the political will to either have fiscal stimulus or to go back to qe. >> i think the biggest risk falls under the category of lack of cooperation. >> iraq is probably the biggest

risk once more. if you look at the infighting in the government there, it is huge. it is being underappreciated by the market. >> you look at what china has from quasi-pegged exchange at around 6.4. a lot of noise in between in august and september. that is not a natural equilibrium. no growth, slowdown in growth where it is happening and no growth where it is not. is important that we, as an international community, cooperate. >> if the engine turns over, we get caught. and if it doesn't come i don't take we are prepared for the downside. >> and investors over the last six years have enjoyed tight lifting. now pick your stuff carefully. let's go now to first

word news. ramy: first, we look to the suspect inthe first the paris terror attacks has been arrested. he was arrested in brussels yesterday. authorities say about tell sewn -- 10 self those worse -- 10 cell phones were seized and are now being investigated. the german chancellor said that coping with the refugee crisis will take time, effort, and money. merkel signaled she will use germany's economic power to turn the crisis to the nation's advantage. scarlet: still ahead on bloomberg markets, what is going to blow away social media?

the answer will surprise you. and as we had to break, take a look at pictures of celebrations around the world as the globe welcomes in 2016. you have auckland, sydney with fireworks. kong, fireworks across victoria harbour. shanghai also sold rating its new year. that is the taipei 101 building in downtown.

carol: there has been so much interesting going on in terms of the world and technology in 2015. let's bring in michael wolff. his a former yahoo! board member. corey and i have an excited about having you join us today so welcome.

we love all of our guests. michael: it is so great a bigger because there is so much exciting things happening next year in media. carol: what is it about the environment right now that makes you say that? michael: there are so many things that we know are on the verge of happening. you have over 100% of americans have cell phones today. that means that people have more than one. we have this entire revolution happening with television. and messaging, which i can talk and little bit more about. we are about to see some things -- we are just at the precipice of seeing a lot of them develop not only in terms of how people are going to use them but in terms of how they become bigger businesses. johnson: you did some work looking at the conception of how people use media and what they do all day. one of the things are really jumped out at me was that explains why i feel there is not enough time in the day.

when he four hours doesn't cut it. because? michael: the average american is 31-houraving a day. carol: are you saying we are being more efficient? [laughter] michael: we are doing a lot more. the average american -- these numbers are interesting. the average american is sleeping about seven hours a day. another working about seven hours a day -- i'm sorry, doing all sorts of other things. working only about six hours a day. when you look at all the other activities that they may be doing at the same time, that is about 11 hours a day, including everything from listening to music, listening to the radio, watching video. so our multitask lives means that people are doing so much more and they are experiencing

so much more. and they are losing out on sleep. carol: i can attest to that. cori bang and i laugh about that but there is so much multitasking going on. we are doing our broadcast but we are researching something at the same time. it is amazing. michael: and people have gotten used to that. 16-year-old or consulate -- they can be in the middle of a conversation and see nothing wrong with being on to other chats on snapchat with friends. when you get to adults, what you see is that it is an accepted behavior to be watching television, to be on the internet. and by the way, while you may be on a speakerphone in a meeting. the way the people watch tv. we have seen that, how twitter is used with tv as well. but your suggestion is that this is just the beginning. that our kids are much more comfortable with this than we were.

of course, we are more comfortable than our grandparent's work. michael: kids are more affable partially because of, from a social perspective, they think there is nothing wrong with being able to sit at a dinner table or sit in a conversation and have a third person involved or more than one or two extra people involved in that conversation who are not there. there are so many opportunities when people have the opportunity to experience technology and media. messaging today already, there are more people in the world who are using messaging apps than are using social media. and it is likely to become much bigger. today, if you really look at the day, we have roughly $3.2 billion -- 3.2 billion internet users. you have 2 billion people on social media. you have 2.5 billion that are already using messaging. we believe, within three years, it is going to be about 2.4 billion social media users and

roughly 3.6 billion messaging users. the entirernet, internet is going to be about messaging. y: and yet it is not clear there is a business model there. --le we look at users and when we look at users and revenues. chat online and some of the others that are in asia, they have already created app stores within their messaging app. these people have created everything from taxi services to music services to video. made we bank.as that is where they are making money. so facebook is probably making of whatsapp and facebook messenger.

there is money there but it has not been explored yet. carol: the presentation you did on the future of tech and media, 136 slides -- it was a lot of slides. we were going through it this morning. but there is one that says that beillion dollar business can built out of less than a minute of a daily users average attention. michael: you look at vice, which is now a business that is the last round of capital of multiple billions, the average person uses it for 16 seconds. buzz feed, average person uses it for 32nd -- 36 seconds. of course, that is averaged out. there are one or two people who are using it more. but it gives you a sense of how much potential there is in capturing but a small percentage of people's time. by the way, the whole slide deck is on her website, which is activate.com. carol: great. cory: talk to me about what you

use activate four. michael: it was part of the wall street journal tech demonstration. that it is something that we put together for our clients and our friends so they can have a perspective on some of the major things that are going to happen over the next year. is a cable killer coming up. but it will not look like what you expect. we have been so fascinated by what happened in the media sector this year. can you give us an idea what this cable killer might be? michael: everybody thought, when -- it is morethat likely to be that services that go to the high-end, people who are willing to spend hundreds of dollars a month on television whereas those at the lower end artist spending $50 month on television. carol: would be different in the

next couple of years or in the media tech space or more of what we are seeing now and more so? ithael: it will be denver -- will be very different. we will be using messaging apps, apps within messaging. carol: we will continue this conversation with michael wolf on bloomberg radio. you are listening to the bloomberg advantage. i am carol massar and cory johnson.

scarlet: you are watching bloomberg. this is a global business report. here's what we're watching. what policy shifts can we expect from the u.s. federal reserve? and has liberty global's john malone set his sights on vodafone? years of losses, sugar prices on tractor post again for the year. how are producers around the world faring? commentst's start with from alan blinder. howave us comments on monetary policy is changing. : the u.s. is on a march towards normality. how long is taking? asy don't see that all

important. the entry of china and more and more ways into the world economy is going to matter. but there is a much longer term focus at these meetings and with economists in general than you see in the markets. scarlet: there is a report that vodafone is in merger discussions with liberty global. according to the paper, investors have been encouraging the companies to pursue a deal. ince the financial crisis 2008, banks have eliminated 200-6000 positions. oftsche bank will get rid 26,000 jobs by the end of 2018. sugar prices will post in a no advance for the first time in five years. it is up 4% for the first time this year. and 2016 to be better. and producers can thank el niño for that.

it has hurt crops in india and thailand. it is time now for a bloomberg quick take. is iron ore boom and bust. iron ore stands out. the 225 billion dollar market relies on china and makes for some challenging prospects. hasprice of iron ore tumbled 30% since the start of 2015 in part because producers pushed ahead with expansions planned years ago. that has put smaller producers in jeopardy and they blame the big names. so what drove the boom cycle? china. it imports more than two thirds of the world exports to produce the steel it needs to build

factories and skyscrapers. initially, that demand prompted a huge increase in iron or production. but china's economy is slowing and steel producers have too much product on their hands. they have expanded exports, which has led to accusations that they are illegally dumping their steel on world markets below cost. brazil and australia are struggling as well. as decades, japan served australia's biggest customer for iron ore. prices were set largely through annual contracts. but that system soon gave way to shorter-term contracts. some people argue that iron ore is now just returning to historical prices and that the price collapse will help the auto as well as construction industries. others disagree. they say iron ore output should be tailored to match demand in an oversupplied market. and one solution that has been proposed comes from andrew forrest. as the founder of fort eskew metals, he has called for them to cap their

products. that is your global business report. for more stories, visit bloomberg.com. abigail is live from the nasdaq. the lasthere we are in rating day of the year and a big story for 2015 is certainly the outperformance of a composite index and the nasdaq 100 relative to the other major u.s. equity indexes. as of the close yesterday, the nasdaq composite x index was up 7%-- composite index was up on the year. behind this outperformance when we go into our bloomberg is the bearing trade. they have outperformed the broader indexes handily.

-- now let's take a look at the upper former. netflix is the top spot on the nasdaq this year. by strongen subscriber growth, especially on the international front. but paul that will add barclays thinkss been vocal it will stay on the sidelines in 2016. there are many analysts who think micron stock has bottomed out. there's more than 50% upside. scarlet: thank you very much. abigail gave us a taste of what 2016 looks like as we wrap up

twice 15. let's look at with the money went in etf's. from trends and international in etf's to the dividend etf's that lost money for the first time, we will break down some of these themes. yearere super popular this and they have tied this huge record. guest: the analogy i use is that it is like the cavaliers winning a championship without lebron. it is really something. it speaks to the fact that etf's are branching off into ways that investors like and they are evolving and taking in money despite some of their biggest stars losing money this year. one way is just cheap. we have seen costs go down. on one evolutionary line, you see cost coming down so cheap that people are just getting free exposure. on the other line is what i call gadgets, smart data, currency hedged. aey are -- they took in about

hundred billion. ,ith the currency hedge etf these other products that are replacing active management and they did very well. etf's can still time -- they might tie their record. that says about how they are siphoning money away from mutual funds and derivatives and single securities. scarlet: and hedge funds, too. eric: hedge funds for sure. hedge funds have not been a huge success, but certainly in other areas. now you can buy a senior loan etf instead of going to a hedge manager to get that exposure. scarlet: you know the people have been piling money into

europe and japan where qe is boosting those stock prices. as long as i can protect their downside. air: that's right. -- eric: that's right. people like it both ways. if you look at performance, it has not been as white as years passed. flat thised is about year. but the hedged is up 4%. it has not been as huge of a gap as we normally have seen. scarlet: let's talk about dividend etf's. the federal reserve is raising interest rates so people are looking at different products now. eric: i have never seen dividend etf's not taking inflows. this year, they have seen 5 billion coming out of etf's. the vanguard depreciation, this

is like a over vacuum cleaner. well for not bode other types of yielding products that people have gone to. insided see a huge shift etf-land if we see this gradual rate increase. scarlet: thank you so much. we've got much more coming up in the next 40 minutes. but we want to show you some live pictures of the biggest cargo ship ever to visit the u.s.. passing right by our san francisco bureau, headed to oakland, one of the united states's a guess ports -- biggest ports. ♪

scarlet: welcome to bloomberg markets.

good afternoon. thisis what where watching hour. the s&p 500 index may be poised to in the year flat but michael holland says, when you look at the bigger picture, this was a banner year for investors. betting big and mexico in recent years. now it looks like he is breaking up that relationship. and from the impact of climate change to new technology, the wine industry is undergoing massive changes. what you will expect in 2016. first, we want to head over to the markets a desk where julie hyman has been keeping track of .very pick julie: i still don't know. the major averages right now are still trending lower.

they are not down as much as they were earlier. that is why it is still an open question as to whether this you will be an up year or a down year. let's take a look at the year-to-date chart for the s&p 500. look at this. up 0.29 points at the moment. one of my producers had been tallying how many times the year had changed from positive to negative and back again. it is something like 28 r 29 times at this point. scarlet: this is what an aging bull market looks like? couple of pretty impressive strings of consecutive annual gains. julie: we have. can't answer the question if this is what an aging bull market looks like because this year to present day trailing off but it is unclear if it is a trend or not.

the past three years, we had gains, but they have not necessarily been diminishing ones. back in 2013, we had a gain of nearly 30%. last year was less than half that. it is difficult to ascertain at least just by looking at these numbers. in 2011, stocks were almost exactly unchanged. but it looks like this year ofld be, if it does see more a decline, the worst year since 2008. just to quickly mention some of the biggest laggards in this year, of course, they are energy stocks. stocks arese actually performing better today. that is not unusual and we see this kind of rotation as we get towards the end of the year and begin the next year. of thesen i on some underperformers, not just today, but in the early days of the new year. scarlet: thank you so much. the firstk in now on

were news. ramy: iraqi troops are still working to restore order to out most of drawing islamic state forces. soldiers did rescue residents who had been used by militants as human shields. now they are removing bonds and debris from the city center as rainy weather slows combat operations. islamic state still controls pockets of that city. this week, police arrested two people suspected of plotting attacks in brussels over the holidays. alsoelgian capital arrested four of the terrorists in the paris massacre last month. police officers will be deployed come about 800 more than usual in new york. it is estimated at about a million people will be there this evening. and a shakeup in the campaign

for ben carson. doug wattstt and have both resigned. other staffers are also leaving. those departures come amid two guns for carson -- those tension forome amid carson. we've got a lot more coming up in the next 30 minutes. the banking industry has been thinking since the financial crisis. it shows no signs of letting up. and it is time for watchmakers to do something about slowing sales. and getting ready to pop above bubbly. our one reporter will give us her top picks for celebrating the new year.

scarlet: welcome back. stocks today are struggling to stay in the green for the year on this last trading day of 2015. mike holland says a flat year isn't necessarily so bad. >> it was a banner year if you think of where we were a year ago.

the federal reserve said we are taking the training wheels off. we are giving you six years of low volatility gains in all asset classes. we said we would do that. and now we are going to stop doing that. when the fed moved away just a little bit, it didn't cause the world to come to an end. we had a flat year. that is not so bad given a lot of the things that happened in the year. >> u.s. stocks, bond yields are usually low. and property markets are also richly valued. there were no doorbusters available in world financial markets. where do you find the value? michael: the reality is that a lot of things have moved up in

the easiest bull market of our lives. that includes real estate. by the way, commodities, you didn't mention commodities. at the end of the day, each of these markets -- you talk about being richly valued, there are some properties in each of them that are probably mispriced. that is what you do when you're doing active management. erik: i have two charts. the question is whether it -- is whether 2016 will be like this. risk without reward is not really the foundation of capital markets, is it? something is gone to break down if more than one or more than two years wind up with flat returns on corporate and treasuries, no double returns on stocks, and that kind of return on yield. michael: i think you stopped on

looks like cash is not a bad thing to have. it's not so much that i am concerned that we will go into a huge bear market. and rather, it recently have another year like 2015, that is ieobably ok given what vonn just described. the thing which concerns me the most right now, december 31, 2015, is actually terrorism. that is something that is much bigger. we have seen the markets react just fine with what we have had so far. if i am the head of isis, i think i can do something about that. scarlet: that was michael holland this morning on bloomberg surveillance. the bloodletting at the world's biggest banks is said to continue in 2015 and beyond.

are justiank and cit -- and citi is just among those who have announced. job cuts at the big investment banker for from over. let's set the scene. give us perspective on how many jobs the industry has shed this year and in particular in the fourth quarter. clear, we are only looking at the biggest 10 to 15 banks, global, the ones we always talk about and no. and know. the numbers are harder to get. when the crisis hit the biggest banks more than anyone else,

they have right there in the biggest 10 to 15 global banks, we have lost more than 500,000 since 2008. and more have been announced, another roughly 50,000. that will bring it up to 600,000 in the next year or two. and perhaps there will be more coming next year because they just never stop. scarlet: they don't stop and these investment banks are going through some secular changes. we talk about deutsche bank being one of the banks announcing job cuts to come, but it also has retail operations. do we have any idea where these cuts are going to be? bank has beenhe a retailbout shedding bank they bought in germany after the crisis. so that brought their headcount down to a big extent. so some of it is probably going

to be that bank not being in there anymore. retail operations have been impacted give trading on wall street is not where it used to be before the crisis. i have traders messaging me saying they are always worried about to the future and whether their jobs will be there. and we have seen that another global banks that have cut trading operations, closed down or rescaled operations. and that will probably happen at deutsche as well. scarlet: there is a function go. called loss it lists all the company-announced job cuts. it is listed by sector. this is for the year 2015 so far. barclays announcing 30,000 job cuts so far.

tabulation, 163 thousand among the banks big and small that we have tracked so far. when you look at profitability for the banks, because that is what is underneath all of this, the banks trying to restore some profitability, there are different ways of looking at it. you don't get return on equity and so many of the bank executives do and investors group your but there is also return on assets. you read -- you have written recently about how assets are painting an interesting picture. yalman: yes. the equity picture has changed so much in the banking world. all the new regulations brought so many new capital requirements that banks that have more equity. that warps the picture. you cannot compare to before the crisis. and you have to hold more equity, the returns will be lower no matter what. that return on assets, it really looks at what you have on your balance sheet, all of your assets, your loans, your securities, everything you hold,

and how much money you are making on them. and that is nowhere near before the crisis level. before the crisis, they were above 1%. thethey are struggling in 0.5 percent range. so they can't make money. and that is why they need to cut shop. scarlet: thank you for joining us. we have some breaking news. a fire has broken out in dubai new the new year's fireworks display.

scarlet: now for a look at some of the biggest business stories. has acquired yet another newspaper as well as a printing facility. it includes the freelance start and print innovators, both located in fredericksburg, virginia. the terms of the deals were not disclosed. claims front of him

and benefits jumped to their highest since july last week. but they still remain near their historic lows. the labor department says the increase could reflect typical swings that take place during the holidays. it is the dawn of a new era for the beleaguered u.s. oil industry. a dutch oil trader is buying it. president obama signed a law lifting the export ban. we want to head now to julie hyman. julie: american airlines is when the, i i. it is not clear -- that caught my eye. busy travel,t of travel delays around the country, and the stock is down 1.6%.

you can get a glance this. idea, tells you the companies that are most tweeted about and what the stocks are doing today, the latest headlines on them. an bloomberg data did interesting exercise. they looked at bloomberg stocks this year. came out in the top spot. brazil, they have an unusually high level of engagement. .he two banks are in here perhaps it is a customer service issue as well as commentary on the stocks themselves. well.a and blackberry as how have these stocks done for the year to date?

is there any kind of correlation? let's look at their performance and what these stocks has done -- have done. petrobras is down. also an underperformer. bank of america as well. alphabet has done quite well. and then looking at the rest of those that are on that top list and what they have done, we have seen citigroup for the year to about three point 5%. so it is a mixed bag but it is a fun way to see what people are talking about. they can be especially useful known are is a little liquid stock that season use like today. sometimes that is german by special edition on twitter -- is driven by speculation on twitter. right.: julie hyman, thank you so much. speaking of technology, it is becoming an important part of

our lives in many different ways. in the coming year, we will more tech available right on our wrist. we will now go to bloomberg radio. carol: we welcome and invited -- we welcome everybody on bloomberg tv. we do have a lot of fun. sometimes you bring in these crazy watches, look great, costs lots of money. stephen: third 2015, it was the smart watch and the apple watch. almost exactly a year ago, we had the crisis with the swiss franc that caused some problems. i think we saw the between that and the apple watch, sales were

differently down this year, more than they have been for any year in the past decade. cory: he saw a handful of always happens, things that were not well regarded before hand suddenly pop in value. stephen: the vintage market this year was credit a big surprise. people didn't know were that was going to go. prices have been steadily rising for a few years now. this are, we saw some big records. we saw a watch auctioned a month million, the most expensive wristwatch eversole publicly. and people were -- ever sold publicly. and people would sure if the markets are going up or just the high-end. right now, it looks like the whole market is inflated. cory: it's a really nice birthday present. [laughter] counterintuitively, it is made of stainless steel. it is a watch that is usually made in gold.

it is one-of-a-kind made for charity. somebody got a nice low right off. carol: who's doing interesting things? i think you talked about mold blanc.- about mont montblanc has trickled some things out. it is creating watches that look and feel and do some of the things that more spencer watches do but at a slightly more portable budget. us were a watch you see lanc might domontbal it for $6,000. carol: so these are copper kitted watches. stephen: yeah, things with stopwatches are calendars that don't need to be corrected.

since this coming year is a leap year, some of these watches, at the end of february, they will automatically correct, give you the extra day and then move into march. worth three or four grand right there. what are you wearing? stephen: i am wearing a german , a small company in germany. they do everything themselves in this little hamlet. carol: hold up your arm. stephen: you can see it right here. carol: it is pretty nice. cory: you know what i am rocking. stephen: i'm going to say timex. watch the whole smart universe, we get mixed reviews of people who like it and those who don't. but they have made people look at a watch different again. a year or so ago, we had a story saying that nobody needs watches anymore. but that hasn't been the case completely. stephen: i don't think it has

been the case at all. talking to executives in the luxury watch a's, most of them have an optimistic view of the apple watch. a year ago, there may have been some handwringing. but they did come around and realized that watches is something that has been out of the public view. people use their iphones. and the more we get people thinking about and talking about what is on the wrist, the better it is for everybody's interest in watches, whether it is obvious or the industry itself. cory: do you think we will see a new one in march? stephen: i do. i think we will see the new apple watch in march, which is when is the largest watch trade show of the year. i think apple has smartly timed that. if we do see it, it will be two weeks before the entire watch industry converges on switzerland for a week. : resell on the apple watch, there was -- resale on the apple watch, do we see any trends?

steven: i haven't seen any resales of the higher-end models, the $10,000, $15,000. on the lower end, you're going to lose some money. but people like them. get cory outwe can of a time at sent when he 16. -- cory out of a timex in 2016. hy?y: w ♪ 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. scarlet: life from bloomberg headquarters in midtown manhattan, you are watching bloomberg television. i'm scarlet fu.

>> we are looking at something happening at a residential building in dubai. building nearthe the british khalifa burning. fire trucks raced to the scene. so far, no cash oldies have been reported. bowing to turn a record number of refugees to their advantage -- vowing. germany is facing an influx of one million or more. half of them fleeing the civil war in syria. take a listen. matter that we help them and we are open to people who seek refuge with us. tonight am i will repeat that

-- 2015 was that kind of year. she thinks germany for helping syrian refugees. she was named times person of the year for her handling of the crisis. the state department is scaling back the number of hillary clinton's e-mails coming out today and says another batch of e-mails will be released next week. final group of e-mails will be released by the end of january. day.l news 24 hours i back to you. scarlet: a love story three years in the making. it doesn't seem to be hitting the rocks now. bill gross has been betting big on mexico since back in his days at pimco. mexican assets are not even in the top 10 holdings of his bond fund. what is behind this broken romance?

bill gross has taken a sizable position in mexican bonds until fairly recently. what kind of bets was he making and what changed for him? >> even going back to his days at pimco, 2012, he famously called the peso a great currency. he has been very involved in mexican government's bond market. earlier this year, he talked about mexican inflation linked bonds. his janus fund come a we saw janus fund, we- saw he was taking a position -- he did pretty well. if you look at how those contracts performed into october, it was a pretty big fall in the price of ensuring mexican debt and he did pretty well. fast forward to the end of

november, and of this positions -- none oftop 10 those positions are in his top 10. it is an important shift for people who follow mexican debt. bill gross has been out front in terms of talking about what he likes mexico. behind him was a wave of foreign investment that really flooded the bond market here. scarlet: they took their cues from bill gross per he has been about mexican assets. has he been vocal about his change of heart? >> he really has not said much. it is important to remember, just before the big fed decision , it is possible that some things have changed since then. positions long primarily focused on the german bund. more secure positions. has been a favorite of his in terms of emerging

markets. for a lot of the reasons that he liked mexico, some of these big foreign funds have followed. black rock came out and decided mexico. he has been a fan for a a while now. scarlet: thank you so much. up, as we get ready to celebrate the new year, we look ahead to what is new in wine and champagne for 2016. ♪

>> you are listening to the bloomberg advantage on this to thursday, new year's eve. it is new year's eve, we thought it might be an to talk aboutme a bit of bubbly, champagne and get some ideas.

ellen mccoy is our bloomberg wine critic. great to have a here with corey and myself. let's talk about champagne. some people get confused when they go out to buy champagne. give us some thoughts on that, some interesting champagne people might want to consider. >> thank you for having me on. i love to talk about champagne. there is nothing better to drink on new year's eve. if you are going to splurge anytime during the year on champagne, this is the time to do it. confusedeople are because they don't totally understand the terminology. they don't know what brut means. it just means drive. ultradon't know what altr

brut means. it just means very dry. they don't know whether they should go with a vintage -- the it has to do with your budget. don't think you can go for a vintage champagne if you are looking to save money. in that case, go for nonvintage champagne. another way to save a bit of money is to look for grover champagne's -- grower champagnes. they cost quite a bit less than the market leaders like crystal domperidone --- don't carr perignon. >> there are different options

out there. >> there are different options. i'm drinking expensive champagne tonight, but not that expensive. >> what are you drinking tonight? -- it costspascal $85. but, it is from a tiny piece of land. vintage,tely great 2002. it is one of my favorite growers to go to. you can buy a much less expensive version of what i am drinking by looking for just a nonvintage version. of somethingxample

that you can get that is less expensive. likeo look for names chartogne taillet. that is really good. priced.uite cheaply you can find it for under $40. the other thing i would say is look for sales. this is the time when everybody is actually putting their $10 off, five dollars off, 10% off. shop around and don't just assume that you have to pay a huge amount of money. cory: this is the day to splurge. , some of myok at it

guests are not champagne or wine drinkers, they don't care, they would not notice a difference. they come to me because they think i will have some great champagne. there's other stuff i could open tonight that i could pour for people who would not care anyways. >> he will pick and choose. can you believe that? >> i don't know. ,hether people know it or not it is surprising how often when you pour something great, even people who know nothing about wine will say, wow, this is good. againstng said, i'm not roseco or spanish cava. i think people should treat

themselves and say, hey, the year wasn't so bad or maybe it was great for you. it is sort of like having great champagne for years eve is sort of like a toast to the future. next year will be really, really good for me. i'm starting out with the idea that i deserve the best. cory: i did that at thanksgiving. we broke out the cabernets. >> i'm glad to hear it. >> pink champagne or no pink champagne? >> i love pink champagne. there's only one problem with pink champagne. than more expensive non-pink champagne. if you are looking to save money, do not think that pink champagne is the way to go.

good onesmany, many one made bylly love rtes -- they make a rose for $60. that is on the cheap and. -- cheap end. bruno has a good rose champagne. i recommended their brut reserve in my 50 under 50 list just before christmas. rose is really good but it's over my $50 price. just didon us that we a great champagne segment and there are no glasses, no corks being popped. this is not the way to do it.

>> i totally agree. you should be sitting and testing. >> next time. >> or next week. >> or in an hour from now. we have to run. elin, thank you so much. go to bloomberg.com for more of her stories. she has stories on wine and different things we can watch out for in 2016. ♪

scarlet: welcome back to bloomberg markets. as we've been reporting come a huge fire has broken out in a building near dubai's massive new year's eve fireworks display. burning debris rained down from the building is fire trucks raced to the scene. so far, no casualties have been reported. managing editor of bloomberg news come on the phone with us from dubai. no cause has been reported so far. what have we learned in terms of the location of the fire and how people may be at risk given the busy area? >> this is in the middle of the downtown area of dubai. very close to the british khalifa, the world's tallest skyscraper. urj khalifa.

two miles away, i can see the flames up the sides of the building itself. it has been burning away for an hour and a half or so. an area that will be packed with people on new year's eve, waiting for the annual fireworks display. at midnight. at first sight when we saw this fire, it was unthinkable to think that the word casualties -- the word we are getting at the moment is that there are not any casualties, but clearly the whole area is a no go area. the flames are still very much in evidence and the smoke is hanging over this amazing skyline of dubai. time ford and worrying the city authority. scarlet: we are looking at the pictures right now. it is 10:49 p.m. there in dubai.

that gives us an hour and change before the clock strikes midnight. are the fireworks displays still going to go on as scheduled? >> we have not had any confirmation. it would be a surprise if they went ahead. from where i am standing, the burj khalifa, the focal point of the display every year is right smarto the hotel, a very hotel, one of the many very chic , spangly hotels of dubai. i would think the fireworks -- given what's going on right now. scarlet: you noted in the story that you wrote for bloomberg downtown hotel was developed by the same company that is behind the burj

khalifa. >> that's right. one of the big construction companies in this region. burjritish khalifa -- khalifa is like its big production. this is one of the smart hotels of dubai. it will be a blow for the company. there are many other projects the company has underway. very -- clearly a disaster for the city and the company itself. you can imagine that they will live to see another day. scarlet: there are some headlines crossing from arabia television that says the dubai fireworks show will continue. there has not been any confirmation that they will be canceled. another station reporting that it will continue. there is still another hour and 10 minutes before we get to midnight.

hopefully that fire will soon be under control. a massive fire engulfing a luxury hotel in dubai. thank you so much for joining us by phone with the update on the fire. let's go back to the markets. the s&p 500 moved closer to possibly ending the year in the red come in the green, still not clear. our next guest says 2015 will likely be the pause that refreshes. officer forvestment global equities -- i loved your comment in your note that investors have been scantily rewarded for their hard work in 2015. is this what an asian bull market looks like -- aging bull market looks like? >> no. it is very typical of a secular pro-market -- bull market. where theeriods market goes nowhere.

we are tracking the bull market as having started in 2012 when we finally broke through the double top from 1999. from that perspective, we are only a few years into the first advance in the markets in 15 years. we think it could go quite a ways higher. scarlet: you are looking for the s&p 500 to reach 2500 in 2016. equivalent to a 22% gain. talk about the trajectory of this advance. will we see pain first before we get to that point? >> we are still having a lot of arguments about a lot of things as we end of the year here. our view is that the market probably starts out next year pretty strong and advances in a ready steady fashion through most of the year. this is the opposite of what everyone is saying. most people will forecast whatever just happened. the market went nowhere, had

several advances, several pullbacks, massive sector rotation. if you come through the year, you have a u.s. economy that is resell it. that's pretty solid. interest rates that show that that is in motion but likely to stay low for a period of time. marks from question last year, oil, dollar, china, starting to stabilize. advance inould the s&p -- against where earnings should be by the following year, 135, the market is trading store nearly cheap right now. one of the big positives of the very narrow market that we had this year is that the broad market is cheap. scarlet: outside of technology? >> financials will do very well

with a bit of interest rate underneath them on the short end of the curve. jpmorgan trading a nine times earnings. health care got whacked with politics. a stock like iliad trading around 10 times multiples. the industrial space which was hit hard on the idea that china was going to close into a global vortex, global industrials trading 15 times earnings. there's a lot of companies broadly in the market that are very reasonably priced. frettingle stop about these uncertainties that are behind us, we think the market begins a nice, steady advance in a surprising way. scarlet: you say corporate earnings should expand dramatically. there has been a search for revenue growth this year and we have not seen it, which is why comedies have resorted to buybacks. and cost cuts.

what will change to make sure that the organic revenue growth is there? >> number one, you will not have the oil companies which make up a substantial part of the s&p losing money. they will probably stabilize next year. the negative earnings affect from the energy sector pulled down earnings on the s&p. if energy goes nowhere, earnings on the s&p are likely to advance. we are not calling for a dramatic organic rise in earnings next year. we think somewhere around 7%. you have a pretty healthy consumer economy. your own consumer in next this morning came out one of the strongest in the last several months. -- index. you will get some topline, some more buybacks. a bit of manufactured earnings growth, per se. margins will start doing better. you are starting to lag now by ,2 months, lower energy prices

the effects of stronger dollar on cheaper import prices. you have china running by three get one free sale. cluster a lot of drivers declining that should help the margin. we think the s&p earnings will be solid next year. scarlet: will credit lead stocks? high-yield credit has been a blowup seen. >> high-yield credit come if you take out the energy patch and the distressed debt sector, it is not that bad. this is a narrow problem in high-yield. scarlet: thank you so much. ♪

>> it's 2 p.m. in new york, 7:00 london, and 1:00 a.m. in hong kong.

from bloomberg's world headquarters in new york city, , a wildatching 2015 ride to nowhere. the s&p ends the year right where it started. this was a quiet year for tech ipos. with dozens of unicorns, will we see new offerings? ready to default on that tomorrow. blame for the predicament. take a look at the major averages. >> major declines across the board. closing out what has not