from bloomberg's world headquarters in new york, good afternoon. here is what we are watching this hour -- a shaky start to the new year. worries about the chinese dow in danger of having its worst start to the new year since herbert hoover was president. general motors makes a major investment in the right hailing company, lyft. the two plan to develop a network of driverless cars. and volume is up because of rising tension in the middle east. let's head to the market desk. since 1932, we have not said the dow fall this far. julie: it has come up a little bit, so we will see if it does come up a little bit. 2.1%.now, we are at

definitely the sharpest selloff since the market correction in august of last year. a lot of it has to do with the steep selloff in china over night and we had tensions ratcheting up in saudi arabia. we have had a little bit of a recovery. off the lows of the session. a look at my bloomberg terminal. we have volume increasing over the past several months. financial volume up considerably. volume up about 58% and not necessarily a good sign if you see a lot of volume on a down day.

big cap tech following today. google and facebook were falling last year. amazon and netflix were the two top performers. in addition to what we sometimes see out of rotation, we had a couple of downgrades for these stocks putting extra pressure on them today. that when youuck look at this thematically, we are kind of in the same laces. one of the biggest games was oil prices and analysts and strategists tend to call a bottom and oil, but without much success. it's still one of the biggest oil-producing regions in the world and then we had a sharp leg down in oil prices. it has to do with risk off

sentiment we are seeing today. the other one has to do with chipotle, down after falling in the latter part of last year after concerns over any collide outbreak. here is the chart on my bloomberg terminal. these are little blue flags that are different news events. most of them had to do with the progress of the outbreak around the country. we saw that since the outbreak was made public a 30% decline for those shares. a lot of analysts coming out with their commentary saying they are not looking for much of a recovery in 2016. david: thank you very much. some breaking news -- mary barra named chairman of the board at general motors.

that's effective immediately. mark crumpton has more now from the news desk. mark: president obama starting the new year with an effort to tighten the nation's gun laws. he is meeting with attorney general loretta lynch to discuss executive moves he can take. the president could act as soon as tomorrow, but the white house has a friend guideline. >> the president will have an announcement quite soon where he will discuss them steps his administration has concluded and he has concluded are within his executive authority that would keep guns out of the hands of people who should not have them. mark: the president will hold a televised town hall meeting on guns. new leadership today in philadelphia.

can he served on a city council for more than two decades before he was elected in november. donald trump says he will keep talking tough about muslims even though his comments are being used in a recruiting video for islamic extremist. he said he has to say what he has to say. handrump has called for a on muslims entering the united states. the somali group with ties to islamic state used a clip of trump in its recruiting video. the national football league is headed to the super bowl. , in the regular season, peyton manning came off the desk -- off the bench. panthers topped the nfc see. news 24 hours a day powered by our 2400 journalists

in more than 150 news bureaus around the world. coming up in the next hour, china sparking of turmoil in the global markets. there are concerns slowing growth would spread. it's the worst diplomatic crisis since the 1980's. more on the escalation between the two powers and what it means for syria. and shire in talks to buy baxalta. what might be different this time around? ♪

david: welcome back to bloomberg markets. it's time for the bloomberg is this flash. startok's oculus will taking preorders for its oculus rift virtual reality headset on wednesday. no word on price or an actual ship date. facebook acquired oculus for $2 billion in 2014. mark adams is planning to resign from micron for health reasons. he will stay with the company until february 1. no word yet on who will replace him. chick-fil-a says it is delaying the opening of its first standalone new york city location because of citations were a number of health violations, including the presence of fruit flies. was inspected on

christmas eve. other violations included failure to properly refrigerate food. let's get back to the markets desk for the latest on some silver linings here. julie: even on a steep selloff every singler have stock going down. a lot of investors buying gold as they look -- look off the risk scenario. we are also seeing some of the worst performers from last year -- two stocks caught my eye, each of which was down more than 70%. 3-d printing systems and gopro boasted poorly last year and we see something of a bounceback today. gunmakers also trading higher in anticipation of president obama signing some sort of executive

order. give aso scheduled to live town hall. we tend to see gun buying ahead of moves like these. finally, lululemon being named as one of the top turnaround stories among retail. it was upgraded to buy from hold from jeffries. the analyst says consensus expectations have been set. significanthas a opportunity. those shares of 6%. david: new year and another shock to the market.

plunging nearly 7% after manufacturing contracted for a sixth straight month. the selloff could put pressure on policymakers who went to unprecedented links to prop up stock prices last year. emergency now is an -- and emerging markets portfolio manager. was it the manufacturing data that sparked this? guest: i think it could have been a catalyst, but it is a bad macro story. the deeper problems lie with the balance sheet and what we are calling the dollar squeeze where we see capital outflows putting pressure on to mastic liquidity. couple of is a factors but the pmi was maybe only a trigger.

looking to august, it seems like there are some parallels. what do you make of how that functions in trading? clearlyhere were technical reasons for her the selloff. bane is also the end of the and we should dismiss those if anything. there's something much more fundamental -- there's the state and i don't think it is as dire. if there is anything that can explain the weakness overnight, it is the weakness in the yuan and the basket they want to keep it stable against. into: give us some insight

the consciousness of the chinese investor. is that the key take away? if i were to use one word, i would say manic. we see these wild swings -- it -- really itore on is losing confidence in the macro story despite a relatively strong government. pick suree week macro is a good enough reason to head for the exits. we hear the story of the government telling the story it needs to be doing. what should it do to reassure people in china? guest: first is to use the level

of fiscal policy, that's where they have the most breathing space. ony can spend money supporting the consumer and, to their credit, they are doing that. the second is monetary easing. the fear that we have is too much injection of liquidity would only trigger capital outflows which brings me to the third thing which is exchange rate policy. this continues the depreciation of the you want against the basket worries me. if that is the case, we have every reason to be worried. david: what does what we have seen today suggest about the interconnectedness of these markets? william: i think the china

factors will be much more of an issue this year. the old issues will be out the door. china is going to be more of an impact on advanced markets. ahead, we are going to have to rethink what the shocks and china are going to be about the rest of the markets. david: thank you very much. general motors is giving a major .sed to lyft a keys they will become ally in their competition against uber. the two companies have big plans for the future. joining me now is the anchor of "bloomberg west" with two of the people behind the deal. emily: i'm here with the general motors president and the ceo of lyft.

on are going to be going in a rental network together as well as a self driving car. and notinvest in lyft uber? guest: we have been thinking therea lot of things and will be more changing in the mobility environment in the next years than in the last 50. is growing faster than any other rideshare company. emily: they are growing faster than uber? guest: they are growing faster than any other rideshare company. we are super excited. emily: how much faster? guest: not talking about specifics in growth rate. year-over-year, we were three x in the united states. market been gaining

share and are excited about the business and the partnership. emily: does this rule out working with who were? this is a deep relationship and the level of integration that needs to happen to bring together what we want to bring together will recall -- will require our companies to work together closely. that is going to be a special partnership that we will be into it. we will be working very closely with lyft. emily: do you see self driving cars taking over the fleet? i think this will evolve over several years and will eventually be the main way people are getting around. as a company that has valued and takes care of drivers along the we will be doing it in the

most responsible way, making sure drivers are taking care of that in those years down the road. the first time we have seen a rideshare company partner with an automaker. i want to get to the timeline because you expect to see the self driving car on the road from lyft in the next 10 years or sooner. timelineu see the playing out? i have talked to dan gurley who is on the board of uber who says it's going to be more like 20 years. we think this is a journey we are going on to get to this autonomous on-demand network. we have announced we intend to deploy autonomous chevrolet volts on our campus in michigan and that will become a development to do rapid development which fits with the autonomous on-demand network we have announced. it is going to be a journey over

time and something we will put a lot of resources behind. emily: is sooner than 10 years realistic? how do you see it playing out? timeyou arrive at that frame? guest: at that moment? i think the experiences interesting. let's say several years out, you open the lift -- open the lyft app. traveling with a group of friends, you will get one kind of experience. from you are coming home work and watching a sports game with other friends. we will be able to create transportation experiences. emily: i would love to see lyft in taco.

we believe apple is working on self driving cars and tesla has been working with carnegie mellon. what makes you think you can compete with highly funded silicon valley companies? guest: we are a highly funded detroit company and are in strong shape from a funding point of view. what is important is we are bringing together for the first time a car company with all the capability we have around autonomous and connectivity around the resources we have from a technical and financial point of view, bringing it together with the fastest-growing rideshare platform. that is a unique combination and gives us an opportunity to be at the forefront of this change. emily: transportation is becoming more of a service. how does that change or transportation model? writing in asnot many cars and they don't need necessarily the best car, if they are just a backseat

passenger, how does your business model change? that change coming and we want to be at the forefront of it. by bringing together the resources of these companies, that puts us in a unique position. having said that, the real strength in our this this is more outside the urban centers. as muchhe opportunities more of an opportunity that any kind of threat. emily: the rental network? how big are they going to be? some of the details we cannot release today, but we are working on this immediately. driver applicants apply but because of the year over -- the year of their car or size of their car cannot apply. there are others who would like an easy way to earn income and

renting a car by the week or month is them that flexibility without the long term commitment of police. taking care of drivers who want to get the income opportunity with general motors and the access to general motors financing power and their fleet of different types of vehicles, we will be rolling this out in several cities and you will see this start in q1 of this year. that will add a lot of value and save a lot of money. emily: do you see financing becoming a bigger part of your business model less transportation becomes a service? guest: we see this opportunity as an interesting one that could scale up quickly and we will work to get at the plate as quickly as we can. we can finance them much more quickly to bring the total cost allow morep down and

drivers to come onto the platform. has a valuation bigger than gm's market cap. how does that strike you? guest: people have ascribed that evaluation. what we are focused on is the work we are doing together with lyft and we think it will create a huge amount of value for our customers and that will create value for our stockholders. named mary barra was just chairman of the board. what do you make of that? guest: that is great news obviously and a statement about where the company is and a statement about her strong leadership over the last couple of years. emily: what specifically would you point to? guest: i think that we are here making the announcement and the fact that we are looking forward to the future of mobility and how that is changing and we want to be at the forefront of that

instead of letting that happen away from us. we see more change in the next five years than the last 15. as you model out your 2016, what are your top priorities? what cities, what strategies are we going to see in 2016? we think about the business is we want to attract new users, drivers and passengers but expand the cases for existing users. the first time you use the service, maybe you are going out and having a drink. then you try it for your commute and care how affordable it is. now we have people using it between 80 and 100 times a month. we will be attracting new users and building products to increase user ship from the first use to the 100 user per

month. how is the car industry going to be different in 50 years? driver model is you is the car we need to and park it when you don't. we are seeing the whole model changing. 45% ofrage car is used the time and the rest of the time it since their depreciating. , congestion,ions all of those things it will drive the change. emily: thank you both for joining us. david: emily chang, anchor of "bloomberg west." more bloomberg markets up next. ♪

hii'm here to tell homeowners that are sixty-two and older about a great way to live a better retirement... it's called a reverse mortgage. call right now to receive your free dvd and booklet with no obligation. it answers questions like... how a reverse mortgage works,

how much you qualify for, the ways to receive your money... and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home and here's the best part... you still own your home. take control of your retirement today! from bloomberg world

quarters in new york, this is bloomberg markets. we want to get a check of our headlines. the house of representatives returns to work today, and repealing obamacare once again topped the agenda. unlike dozens of previous bills, this one could actually reach the president path to -- president's desk. united nations envoy for syria iran.ded to of monsieurorter al-assad, andshir they have participated in international talks. workers in northeast china sent down provisions to four traps in ped miners.

rescuers are drilling a new tunnel in an effort to save them. the federal government is suing volkswagen over conditions cheating software found on 6000 vehicles sold in the united states. alleges themplaint german automaker a legally installed the software to make its diesel engines pass federal emissions standards when undergoing lab testing. vw could still face separate criminal charges. it is negotiating a massive recall with u.s. regulators. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: oil is slumping this afternoon. futures rochus much as percent this morning after saudi arabia cut ties with iran.

to get some perspective on this, we have our reporter from bloomberg intelligence. ,alking through this news today we saw this spike around 11:00 a.m. eastern time. we saw it go the other way then. an area ofics is focus for us. we discussed this extensively. what we think is you have an investor community who is more accepting of a more volatile, more hostile world. therefore, these types of events are less influential, less provocative when you return to the fundamentals of a very imbalanced market demand versus supply. you have this cross currents of resilient supply colliding against this rather tepid, sluggish global demand growth. when you revert to the fundamentals, these types of

issues, which are the known and are somewhat depleted in the investors eye. david: the biggest two-year record loss coming into the new year. lack of sustainable demand. we have had times where demand has been pulled forward, but it has not been sustained. that has been the issue. supply is one of the factors in the u.s.. we had this resilient time of supply growth. even with this cut in over the over the -- cpap x past year, that will remain the narrative into 2016. resilient supply going up against sustainable demand growth in a developing world. david: we will talk about factors developing what happened over the weekend.

arabia ishat saudi playing, and the prospect of iran getting back into this market in force how doe. it has the potential to change the market a little bit. >> we think saudi arabia coming into the market and wanting to capture share is also a function of attempting to thwart the iranian resurgence. it is more secretary, rather than purely based on the economics of demand and supply. it is sunni versus shia, it is saudi versus iranian. dominancethe within the region. before i let you go, i want to ask about natural gas prices. we have seen a spike. is that sustainable? >> similar dynamics.

we are in the heating season. the traditional heating season begins november 1 and lasts through march. which are taken to deplete inventory store, as this winter has been mild, they are quite high at the moment. david: thank you. let's give more insight on the tensions between saudi arabia and iran. is our reporter. let's ask first about what we saw over the weekend. something we have not seen in three decades, souring tensions between saudi arabia and iran. what threat does this pose? >> we see a major escalation between the countries. that dynamic was triggered when in iran was

overthrown and the islamic republic was established. theidn't go too far, given war in the 1980's. right after the fall of the saddam hussein government, iran got the ever had, and that has exacerbated tensions. those were pushed up several notches after the arabs writing and the war in syria. now that iran is returning to the international fold, the saudi arabians are petrified as at, as they were are looking they know that iran can go throughout the region even under sanctions. david: this has to be a colossal headache for the obama administration on two fronts. john kerry is trying to bring all parties to the table for an active solution. we had not seen this

escalation between saudi arabia and iran, the chances of reaching a settlement on syria were very slim. and therests polarization between the two sides are such that it is very unlikely that we will a cessation of hostilities, much less a negotiated settlement in syria soon. i am talking several years here. seeing thesee been wars fought by proxy for many months in a de facto these fire in yemen, called off by saudi arabia over the weekend. does this show the end of the ability for this war to be fought by proxy? something weat is will have to wait and see. i don't personally that anytime soon, given the imperatives of both sides, that they will come to direct blows with one another. in terms of the saudi arabian that likely. i do not see

note that the execution of a shiite dissident clerk came within days of an airstrike, which according to the report, was jointly conducted by syrian government and russian aircraft. that took out the most pro-saudi over the army of islam. i think that the saudi arabians saw that as a blow, and that would explain the timing of the clerk who was in saudi custody for almost what true years. david: what does this mean for the balance of power in the region? much more to be a isolated country, even more so in light of this. terms of the balance of power, that is what the united states is trying to achieve. there are four powers in this .egion

turkey, iran, saudi arabia, and israel. saudi arabia is the weakest, and they are shouldering responsibility for the entire arab world when all of the autocratic meltdown is in regimesand many arab have fallen. many have weekend. ee themselves asthe shouldering the burden of the entire region, and are fighting on many fronts . then they have the problem with isis, which in my opinion is the biggest threat to saudi arabia, far more than the iranians or the shiites could ever pose. david: thank you very much. coming up in the next 20 minutes of bloomberg markets, bill clinton returns to the campaign trail in new hampshire. he is making his first solo

appearance on behalf of his wife, democratic front runner, hillary clinton. baxaltaw talks for pixe takeover. ♪

♪ welcome back to bloomberg markets. after spending much of 2015 in

the background of his wife's campaign for president, bill clinton is back on the trail, and lighting to rallies in new hampshire. he talked about getting back in the game. the first in the nation primary is five weeks away. now.heilemann joins me john: happy new year. where are the champagne glasses? david: still dirty. [laughter] why did this take so long? john: president clinton was in the difficult situation where people would criticize him of doing too much or too little. in 2008, he stayed out, and people said you need to be out there more, and that he got out and he gone trouble. she is a very accomplished candidates, and a very accomplished public service. his attitude is that she needs to do this on her own, needs to be seen as an independent person. she is as good at this for better at -- or better than at am at this at this point.

but it was inevitable as the new year came around that he would hit the trail for her. david: their daughter will also be involved as well. john: she will be doing a little bit of that. father, who loves politics, and her mother who grudgingly accepts politics, chelsea clinton shuns politics. way,as a grandchild on the plus the one she already has. she will not be a surrogate for hillary clinton, she will be used sparingly. david: aside from remarking on the fact that he might be rusty added, did he have anything to say? juliejohn: he did not. the most interesting thing about this is that the clinton, trump war has been going on for over a week. attacking hillary clinton,

publicly, everywhere he goes. he is not holding back. he is introducing all the accusations from the past. the clintons have taken the posture of we will not back down. and yes bill clinton went out there and made no mention of donald trump. disciplinedarkably performance from bill clinton today. to 2008, where his worst moments were when he saw his wife get attacked, and he got a emotional response. this is his first stepping out, and he seemed very focused on trying to not make news. how long that will hold, we will save. -- see. [laughter] have the release of donald trump's first television ad. he is saying some of his things, how is it?

the is a perfect distillation of his campaign. he started his campaign o by talking about a wall with mexico. they had phased to around the time the paris attacks in san bernardino became much more focused on islamic terrorism. arethings that he says controversial, he is not backing down from them. they are still front and center. whether you think donald trump is horrible for america, horrible for the republican greatest thing since sliced bread, he knows what his campaign is about. his closing moment in these final days is going to be like his opening argument. he will not change in any significant way. beid: tonight you will talking to governor chris christie, who has put a lot of chips in new hampshire. --t we talked to him about what will you talk to him about?

john: there is a circular firing squad that has started, interestingly, along the second tier candidates. usually it is between the front runner and the guys down below. in this race, everyone has come to the conclusion that attacking donald trump is in no one's interest, that you just get worse for the fight. and maybe, they believe, he will just eventually fall. so now they are shooting each other, trying to establish who will be the alternative when, as they hope, the old order will restore its self. who will be the candidate? they are all firing away at each other. we will talk to chris christie about elements of his record, and the dynamics in his establishment. david: thank you very much. you can catch that interview

tonight when they talk to governor chris christie. bernie sanders is tomorrow night. now let's go to the markets desk. health care stocks, this is one of the performers of last year. hoping to leave some of the declines today, the virus and which we were pointing out last week, it does well on the year made a big dip that it had here. it rose 12%, closed down 4% today. some individual movers that caught our eye, not any specific catalyst, but just the story of general volatility. we have seen biotech. down.gen investorsd some

cutting their stakes, but nothing today specifically. more, general malaise. cuttinghad analysts their earnings estimates for the first quarter, we have had investors cutting their stake. as the stocks have been of performers, many of them are relatively highly shorted. take a look at my bloomberg terminal and a short interest on specifically, the short interest ratio remain at a relatively high elevation. we also seek short interest as a t 18.5%.ge of flow an what is interesting there is that even a. versus come down with the stock ratio has remained elevated. all of that means that there is bearishness on the part of investors. david: thank you.

coming up, a drug deal on the horizon. what could they mean for the drug industry?

david: welcome back to bloomberg markets. it is time now for the bloomberg business flash. the biggest business stories in the news right now. fidelity is switching partners for its cash back credit card. bank of america

and visa. is on trackndows 10 to grow faster than any other previous version of the operating system. it is now running on more than 200 million devices. satya nadella trying to build a system of gadgets and cloud-based software that work together. and shares are already trading in milan. feel chrysler distributed to shareholders there remaining 80% stake in the automaker. convince tried to investors that the value will increase once it is no longer creator. mass the dow dow down 400 points. 2.4%.p 500 down 869.40 daq down

our health care reporter is here now and will have more on what this new deal proposed will mean the industry as a whole. >> it looks like it is about $2 billion more on the offer. and a little more time for everybody to get comfortable. when this happened over the summer, they had been an index independent company for about 30 days. all of a sudden shire came out and said we would like to buy you. they never even had a chance to figure out where their new office was. we are now six months away, they now have had time to talk to their investors, and as we enter the new year and looks like

there will be an attempt to get this done. was an all stock deal last time, and now this is a stock and cash. in versions getting these tax deal to work, what is this play? when we think about the cash component, whenever you add cash taking away risk from the target companies investors. instead of getting you stock of a company that will be acquiring all of your put bets on this deal, here is cash right now. mentioned the text component. that is a huge part of what is going on here. sultan, a u.s. company, subject to u.s. tax rates. most companies can pay less than that. located outside

the u.s.. only paying about 16% after the merger. you are taking weight percentage points away from the tax rate, billions of dollars of profit a year. that is a significant amount. if you are a foreign buyer, the tech centers you get a loan can alone are worth it. david: thank you. coming up in the next hour we will survey the global economic outlook with an exclusive interview with the former head of the international monetary fund.

betty: it is 3:00 p.m. in new :00 p.m. in london, and 3:00 a.m. in hong kong. welcome to bloomberg markets.

from bloomberg world headquarters in new york, good afternoon. i am betty liu. this is what we're watching at this hour. talks are plunging today for the start of the new year, but they are crawling back from their session lows in the dow .ecording his wors the dow record against worst start to the near since herbert hoover. economist imf chief tries to makeard sense of the global economy. he joins us for an exclusive interview. we are about an hour away from the close of trade. i want to bring in bloomberg julie hyman -- bloomberg's julie hyman at the markets desk