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 been

strong for many investors. we are looking at .02 of a decline. we will not know if it is a gain or a decline on the year. >> and where we've seen transportation, where is that? >> we track it. not just performing, but underperforming by quite a bit. some of the individual worst performers, it's a pretty mixed bag among different types of transportation companies.

these are down with oil prices and fuel prices down as well. typically, it would benefit transportation companies. it's one of the smaller railroads in the united states. david: let's stay on the market that went on a wild ride. i want to talk about the year. >> 11 of the days, it is 1% up

or down. [talking over each other] you just make a running talley of that. it happened in august and september when the market was very volatile. we had some selling. andhink about volatility the fear index. but what happened is you have to look at a different day because it really tells the story. we've gone through a lot this year. we had it big intraday ranges that we went through. it doesn't look like a lot happened, but a lot did. when you look at things

you can attribute this volatility to -- >> you have the low news environment, low volume at the end of the year. also to some extent, utilities. pervasive kind of impact rather than isolated. the high-yield bond space gives you an indicator for risk. david: you describe a real flatness overall. what can we divine from what is thisning yet go >> i think is the new regime that people of been talking about. smoothe has been a very one. it has been a pretty

consistently quiet trading environment. a lot of people are pointing to the new interest rate environment. how much of this is attributable to the fed and how much is attributable to stuff like energy? there is a lot of factors here. think we will continue to be in this environment where you will 1% swings and you have to be alert. just count on the santa isus rally because there more of this intraday volatility. talk tohen you strategists about the new year, are they excited about the possibilities in the u.s.? >> there always excited. they are generally always bullish.

they reduced his expectations at the end of the year and that is about the average estimate that which ist about 67% pretty small compared to where you usually expect. up thete as eager to put expectations. to 2016, we look ahead some of the most notable guest they think are the biggest risks in the new year. >> what is the single biggest risk? >> biggest single risk. >> the biggest risk in the is deflation and much of the world economy. we have this thing called divergence. we are diverging policy. my opinion, is the biggest risk. >> it is the geopolitical risk.

that will be difficult for leaders to deal with. there is a very large number. funding themselves. >> has the fed actually achieved liftoff? you get to a point where they pay a little more attention to balance sheet. we have an overshoot. it will bring out the chinese r&b simultaneously. >> what if the economy does weaken? >> we don't have the political will to have fiscal stimulus or to go back to qe.

>> a think it falls into the category of lack of cooperation. >> it is being underappreciated by the market. >> you look at what china has done and you move from a quiet exchange rate. a lot of noise in between. and that's not a natural equal every them. >> it is important that we in an international community cooperate. >> it is a challenging environment for investors.

david: a lot of risk and not a lot of unanimity. that's what you missed. my colleague has that from the news desk. >> fires raging near a luxury hotel. now saying the fire will be under control in the next 30 minutes. it's not clear what caused the fire which ran up at least 20 stories. it is near the world's tallest skyscraper. shelti have been reported so far. -- no casualties have been reported so far. the medications director doug watts has resigned. the former iowa from one or -- front runner has fallen in

recent polls. video of a to the white police officer fatally shooting a black teenager 16 times. media outlets have been pressing for the documents release. and more than 8.5 billion people have signed up for individual health plans for the affordable care act government run shopping market or had their coverage renewed according to the u.s. report that tallies enrollees. the u.s. is estimated nearly 10 million people will be enrolled by the end of 2016. dayal news 24 hours a powered by journalists. up, gold is on track for its third straight annual loss. why has gold lost its luster? and currencies, this is been the worst year for fun since 2011.

all thanks to the federal reserve. it was a lackluster year for tech ipos. the other unicorns we have heard so much about go public. ♪

to bloomberge back markets. we've been covering breaking news story of a massive hotel fire in the midst of a celebration in dubai. near the scene, we spoke couple minutes ago. it you were talking a bit about plans for the fireworks display going ahead as scheduled. any word on if that's going to continue?

>> somewhat unbelievably, the withrities will go ahead it. it seems a rather unusual decision to do it so soon after a disaster like this. it looks as though the entire hotel in downtown dubai is being burned. handing over the downtown area, it is an iconic skyscraper that looks over the entire downtown part of dubai. the latest information is that they will go ahead with the fire display but this building is still ablaze. nobody knows what kind of logistical operation leads to where they are being held.

the bloomberg news managing editor in dubai, it is close to the burj khalifa. it broke out about 9:30 p.m. local time. they say will be under control and 30 minutes. this is bloomberg markets. ♪

david: welcome back to bloomberg markets. the fed chair janet yellen sent gold prices on a roller coaster ride. the best forecasters are predicting there's only one way prices are headed next year. that is down. heading for the third annual loss, the longest run on the decision to raise rates. let's start with that decision.

>> it does seem like most of it. october started looking more and more likely. dayg on the phone every with analysts and traders was pretty much them saying that this is a done deal. it's pretty much the end of any hope we have for gold being higher next year. >> you're on the phone next you're talking about where gold might go. how do they navigate that uncertainty? >> it is up to each individual strategy, right? that tellsome people us, i don't actually believe it. i don't think we will see anymore rate increases. that is for the market to decide. it certainly does leave a little bit of uncertainty in the market. three straight years of decline

with six straight quarters. i guess i can understand why some people say i will try to pick a bottom at some point. david: you people talk about the end of gold as a safe haven? >> absolutely. this is what we hear about when we sit down with our stories. even when we asked analysts or traders, they say, come on. we have just not seen that safe haven buying that we used to see three to five years ago. even part of the conversation. david: gold is not a productive metal. compare it to palladium or platinum, these are widely used. >> platinum and palladium, catalytic converters. andave seen demand fall

slumped in china for different commodities as the country continues to hit a slower growth. had a huge affect on platinum and palladium. and on top of it being a ammodity, that is having compounded effect on it. david: it will not necessarily bring you money. it will sit there versus other assets. well, a lot of people try to talk about it. it is a hedge against inflation. comingee some inflation into the market next year. and i think that is really the big thing. the two things i have basically asked, what are you looking for. we see easing in central banks across the rest of the world and the pace of rate increases here. 2015 was also a tough

year for currency funds that suffered their worst decline. joining the is rachel evans. what is punctuated by so many momentous central-bank decisions. rachel: the fed was the half currency and the commodities. the fund manager was really this difference of what we actually got from the fed. they were 100% likely to raise rates. so we thought last year. when it got to march, april, that certainty started to waiver. whateople started to exit was predicated on that. fed surprising a lot

of traders going the opposite the way they thought. rachel: in 2015, people thought we were going to get a rate hike by june. they were expecting to see something along the lines of setting up for a june high or a september high. they emphasized it was very data dependent and downgraded the assessments of inflation. .t shocked a lot of people we saw a real selloff in the currency there. read, it could be the year. >> it could be the time to get back into carry. this has been a tough year for traders because the strategy relies on borrowing in a low interest rate environment. and the market route that we saw reallyar with exports kind of an did that trade. next year, we see some carry trade potential.

it could be a little bit less risky. emerging market people are not sure. where do people actually make money? rachel: through shorting those currencies. back ofades were on the a more fundamental valuation. if you managed to catch the beginning of one of the dollars, you could of done pretty well. was, there was a lot of volatility along the way. you might miss out on some of those upward moves. fx trading is not for the faint of heart. rachel evans with bloomberg news.

after a slow 2015, investors are not just chasing the next unicorn anymore. what are they looking for? ♪

live from bloomberg world headquarters in midtown manhattan, i'm david. let's check in on bloomberg news this afternoon. >> verse we go to the mideast were a huge fire is burning at a hotel in dubai across the street from where a new year's eve fireworks show supposed to take place very soon. not clear what caused that fire which ran up 20 stories. khalifa, the world's tallest skyscraper as

firetrucks raced to the scene. rejecting nationalists that have hate in their heart towards refugees. the german chancellor says that coping with the refugee crisis will take time, effort, and money. she will use germany's economic power to turn the crisis to the nation's advantage. you have been arrests in the paris terror attacks. arrested in the brussels neighborhood. authorities say about 10 cell phones were seized during a search and are now being examined. and an air canada flight from shanghai to toronto rain and a heavy turbulence and was forced to land in calgary. 21 passengers were injured. in 150 news bureaus around the world.

david: most of blaine this year, energy. the commodity self has been the story of the year. as you take a look at the bloomberg terminal, a list of global commodities. they are seeing some gains here, a little bit of a setback. this column i want to draw your attention to. the volume. the percentage change in volume. that is already. in the year to date percentage change is pretty steeply down for those energy commodities. been seeing some unusual gyrations early this morning. and now taking another leg lower. there are not many catalysts out there today.

we tend to see a little more volatility in the markets. year to date, we have seen the neighborhood pullback 30%. it actually saw more acceleration late last year than it has this year. gaining about .4%, rising with the underlying oil price. in there, of course, you see selling. sincees it the worst year 2008. david: coming up in the next market wethe public sat down with the german finance

minister. ♪

david: welcome back to bloomberg markets on and the new year's eve afternoon. internet companies piling up in the private market. 2016 be the year we see 150 unicorns make their trading debut? let's talk a bit about the slowness of the market throughout 2015. glacial.rly >> the one thing is how much money has been coming into the private markets. you can stay private and raise a lot of money. why should i go public at all? we have seen a very slow year. in times more money raised the private markets than through an ipo.

which is the biggest gap since 2000 which is the year that terrifies everyone in silicon valley. i know you talked to a lot of these seas and i wonder if there is pressure on that camp for them to go public. >> publicly, they want to go be supportive. and to invest in the company in hopefully, several years later, the company goes public. all the world wants to see these companies in the ipo pipeline open up. they want to see some ipos.

will money be the defining distinction here? >> is sort of outside of the silicon valley tech ecosystem. you are right. it is a profitable company and different from the mentality we have seen with startup unicorns right now. and i think it will be the company that ceos look to and say, i would like to look at how they value these companies. is a good model and profitable. the markets responded positively. >> an executive was on bloomberg last week talking about it will go public when it is ready. what is not ready about this

huge global company with this valuation? >> uber is still spending aggressively and still growing aggressively. in markets like india and china. we would be seriously investing in those markets. the markets that are competing in and what verticals will be competing in and what the markets would even judge. moreng as uber can raise than $10 million on the private markets, why would they go public? it allows them to compete aggressively and see where the chips land when they are ready to go to set those quarter by quarter expectations. that's eric joining me from san francisco.

the consumer electronics show kicks off next week in las vegas. there.hnson will be he joins us in san francisco. 170,000 people flock to this thing every year. what are you looking for? be plenty ofill buffets, free t-shirts and all kinds of garbage. it is an interesting technology that we will see reflected at ces. you see knock offs whatever is happening. we see tons of fitbit knockoffs, technologies. i think what is really is that they find themselves around the artificial intelligence. devices that can adjust what they are doing. be one of theht

more interesting things they will be looking for at ces. big trends in computing that could come down to those little places. david: looking at the agenda. millionsill be filling of square feet of space. you have major automakers. are much more than a means of conveyance. cory: a lot of big companies don't even go anymore because the show has become so unmanageable. there are people from apple wandering the halls, i'm sure. but they will try to posit themselves as the solution. many have several development systems.

they'll be showing this things off similar to conductivity. i will use a term that you load. the internet of things. i was starting to see a convergence where electronics are infiltrating all parts of our lives? : you could just call it sensors if you want to but the notion that you're gathering so much data. using the software to analyze that data and what kind of exercise activity. david: safe travels. it cory johnson in san francisco kicking things off on wednesday, january 6. coverage on bloomberg tv and bloomberg radio.

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david: welcome back to bloomberg markets. german chancellor angela merkel is vowing to use germany's economic power to turn an influx of refugees to the nation's advantage. now is our chief senior economic correspondent. some of it struck me, how she characterized the influx refugees as an opportunity. >> she used a really interesting phrase that was translated as we can do it. really means is, we will figure it out. we don't yet know exactly how it's going to work. month,d it over the last they will have to be integrated.

they will not sit there in camps. they will have to learn german. it's ok to say them in germany. and she has disavowed multiculturalism. comeaid if you're going to here, you'll have be part of this culture. germany has done this before and they did it very well. many bosnians ended up in germany and they were very well integrated. they became part of the fabric of german life. it is not the easiest thing to do. david: i wonder what this has done in her own party, the christian democrats. >> he went to the party gathering that she had in mid-december and she really pulled it together.

she even got a little teary-eyed and basically said, this is something that we have no choice but to do. those limitations on refugee numbers are as yet undefined. she will not accept an upper limit. this is what they referred to. david: you asked her finance minister of that. let's hear what he had to say. nonsense? this it is my job to make sure we do not live completely beyond their means. a finance minister have to say no more often than yes. >> is that something you have always known in your career? >> it is always like that. clinical leadership means always having to say yes or no within the confines of money. you have to say no more than yes. let me talk about the limits of your power within germany.

how much leeway do you and the chancellor have to make concessions to greece? when you think about going back to the bundestag with the new package, how willing are they to bring you room to negotiate? always managed a clear majority. that is not my problem and not my battle to fight. it simply has to be a proposal to the finance minister to leave this right. and you believe that she has enough room to make that decision? a questionthink it's of how much decision-making freedom that angela merkel has or the finance minister has but it needs to be exclusively addressed. >> it seems like the problem of the eurozone has been the difficulty of enforcing that criteria. had you make them enforceable?

problem is not understood in the united states. as long as we do not have economic and financial unions, shared political decisions -- >> finance union. >> than the currency is not truly stabilized. we need to make sure the difference in performance and the competitiveness does not become too large as that would be demanding too much of a shared monetary policy. is not fiscalrn discipline but competitiveness. times?ou remember those when we would talk about not free movement? that political pair is on par with kissinger and nixon in terms of power-sharing. they have done a remarkable job

of keeping the european union direct -- together. tune in live at the american association conference call sitdown with the cleveland fed president. and he will be talking to the chief economist. i am very happy to welcome our bloomberg television audience to bloomberg radio as well. asked, what happens now in the coming year? relief, it means something to handle a $70 billion debt burden. at cumberland advisors, they are based in sarasota. this default has been a long time coming. is this the one that really turns up the heat? i think this is another step in a saga that has been going on

for several years and has been building to it for perhaps a decade. we saw the first default by puerto rico on august 1 on a bond where the legislature did not appropriate to make the payment. that was the cell though -- salvo of an actual failure to make the payment. havee know that we litigation ahead. -- all of the intricacies of this island economy with 70 billion in debt and had an operational government structure that has run down the economy and the wherewithal of the government over longer than a decade. remind our listeners how an

island nation racks up $70 billion in debt. >> it wasn't easy. there was a time in which for the rico got very strong tax breaks and housed the pharmaceutical industry. then was theened tax law changed. and the benefits were subsidies and stopped in 2006. and since then, the government has run deficits, they have exhausted the pension funds. had all forms of indirect subsidies from the government. they essentially lost the entire economic base. it did not happen overnight. it took time. no political will existed in

the legislature or among the governors to do anything to change it. >> what does this mean for the municipal bond market in particular? is this the kind of event that can ripple or build? >> what do we know? there are state specific municipal bond funds that hold puerto rico back. their shareholders are at risk. there is potential litigation over whether or not a shareholder that bought a specific tax-free bond fund wakes up and finds it has a lot of puerto rico debt. in all 50 states but not true that it was issued by a new york issuer. there's a lot of potential turmoil. contagion usually comes from an unknown. you wake up one morning and you

get hit in the head with a club and don't see it coming. puerto rico has been festering for a while and building for a while. it is not a contagion risk but it is a serious risk. it will need to be restructured. of time and a lot lot of lawyers to get it all done. >> used your clear of bonds or does this create buying opportunities? >> we think there are opportunities in the tax-free municipal bond space that are screaming at you for purchases. when you can get nearly 4% tax-free on a very high grade municipal bond at the same time the taxable long-term treasury pays you 3%. that is upside down. system says it has not healed from the financial crisis

and the tax refund is the bargain. the tax-free bond. to raiseey set interest rates if the economy supports such a move? what does this mean for the bond market? likely to is more move. -- somethinguld be that would be developing consensus. how much that changes the longer end of the bond market remains to be seen. recoveryobust economic -- and we don't see it. we see gradual. longer-term interest rates are not likely to rise very much. -- europe hasgest

22 countries with negative interest rates. and that is a suppressing force on our treasury bond curve. we see flattening yield curve. the short and goes up. the long and much less a popular movement. >> you wrote recently that entering 2016, at least in the etf portfolio, your nearly fully invested. >> we believe it gives us a single-digit return. what that will be, i don't know. we have seen this cycle in energy values before over longer periods of time.

it's a very intriguing question. the energy sector is down to about 6% to 7%. typical high weight would be in the low to mid 20%. it was a long time ago. the historical context could be very cheap. >> i was just going to ask you, is it time to buy energy-related stocks? and prices really start rising again.

>> i do see some of the natural gas companies for sale, really cheap prices. we will start to export natural gas. sailing away, these are long-term supply contracts. it is a developing export business for our country. previously, we did not have this business. volumes in the natural gas sector are going to rise. if you have rising volume, you can make more money and distribute. we go over weight. >> chief investment officer from cumberland advisors joining us from sarasota, florida.

not ready to make a full meal of it. this is a big question and we're glad david can talk to us about that. we have a lot of coverage on that. things for joining us. ♪

betty: welcome to bloomberg markets.

from bloomberg world headquarters here in new york, i am betty liu. is the final trading hour of the final trading day of 2015. stocks are heading towards their worst year since 2011. and 2015 was the year investors lost their taste for one stock -chipotle. then we will be asking wilmer ross about his thoughts on puerto rico and where he sees opportunity in 2015. in the meantime, it is now 2016 in dubai. you are looking at live pictures. no fireworks yet.