from bloomberg world headquarters in new york, good afternoon. i'm betty liu. breaking news here on stocks -- extending their losses in late trade. the dow is now down over 300 points following the lead of global markets. crude oil dropping below $34 barrel. the apparent hydrogen bomb test by north korea is just one of the geo political factors riling investors. the un security council vows significant action but how will it impact the world? and turning up the heat on yahoo! ceo marissa mayer -- starboard letter sending a letter to landing change saying management is destroying value. will it lead to a proxy fight? are mentioned, stocks extending their declines.

losses are accelerating now as we head toward the closing bell. julie hyman has the latest on the new lows we are heading. julie: after we got the fed minutes, looked like we were going to see continuation of the selling that had been going on. the read of markets and seem to becausement was dovish fed members were concerned about global growth and inflation not getting up to the 2% target pace. all three averages are making new lows. headlines coming out from the nasdaq saying there is an issue affecting the cancellation of orders. the new orders not affected by this issue. update you on that situation and see if it is continuing or how broad the issue is. if you take a look at the three

days we have had for the major averages, particularly the s&p 500, it looks like we are going to have one of the worst days since 2000. the decline for the s&p 500 is about 3.1%. in 2008, there was a 4% the klein. when we had -- 4% decline. , it ist it is persisting reflecting concerns about global growth and we are still talking about these concerns that are out there. groups in thee s&p 500 -- energy and materials leading the declines once again with ron based selling across the board. the weekly inventories report shows record levels in cushing, oklahoma. concerns about global growth would reflect concerns about demand for oil as well. usually the dollar and oil go in

opposite directions but that is not happening. the dollar moving lower after the fomc minutes. betty: the world bank coming out saying they are downgrading their forecast yet again to 2.9% globally from 3.3% in june. this is in line with some of the forecast from others. boost to someg a of the safe havens. julie: gold is catching a bit as we see more concern, people see a place to hide in gold today, up 1.4%. i want to touch on some of the worst performers -- apple lower on continuing concerns about what's going on with iphone demand. chevron, one of the big decliners on oil prices. a check on thet

headlines with bloomberg first word news with mark crumpton at the news desk. mark: skepticism and condemnation is how the international community is reacting to north korea's claims that it conducted its first hydrogen bomb test. bill --e house says says they must have a d nuclear eyes north korea. >> it is provocative and a flagrant violation of un security council resolutions, not just one but any number of them. following a closed-door emergency session, the united nations security council released a statement saying it would begin work on a new sanctions resolution. russia policy when ambassador says it would be going too far to say russia supports more sanctions against north korea. we will have more on north korea with former defense secretary william cohen coming up. the white house and -- the

investigation into benghazi is looking into david petraeus, the first of four former obama administration officials being interviewed in the next week. the committee will question former defense secretary leon panetta on friday. all four interviews are being conducted behind closed doors. military officials say two wounded american soldiers and the body of a third have been evacuated from a battlefield in southern afghanistan after fighting broke out with the taliban. evacuation was delayed when one helicopter took fire and was unable to land. and other was unable to take off. the standoff in oregon continues -- the leader of an indian tribe whose ancestral property is they are notd says welcome and need to leave. the armed men seized buildings at a remote national wildlife refuge on saturday.

dayal news 24 hours a powered by our 2400 journalists in more than 150 news bureaus around the world. markets are suffering and other selloff, the second and three trading days. we have lost almost 600 points on the dow in the last few days. where are stocks headed for the rest of the year? for more than 30 years, byron lee has given his views on a number of economic market and surprises for the coming year. among his productions were 2016 -- stock markets will fall and oil will stay in the 30's. the yield on the treasury will remain at 2.5%. i asked him why he is so bearish this time around. the u.s. economy is not as strong as i thought. the fed has stopped

accommodating, the geopolitical situation has worsened, right up to today with the north korea announcement. probably the thing that influenced me the most is the disappointing earnings. i think earnings will be disappointing this year. you protectedar, stocks would go up 8% and that did not come true. do you blame that on earnings? guest: i'm an optimist. you don't get to where i am at this age, still working without being an optimist. there are just a number of negative things that happened during the year. on december 31, the spillover that is what serves me. the consensus view, the market is going to go up 10%.

do we need to start abandoning that? it's alwaysuest: good to look at what the consensus view is. the three most crowded trade is that one, everybody thinks it's going to be strong and soon oil prices will start to go up. everyone takes the -- thinks the 10 year treasury will yield 3%. when you start with that and say is that right? most people think that in the of making mosty people look bad. betty: and you don't believe that. you see 10 year yields at 2.5% and oil stuck in the 30's. guest: and my view is that the dollar is going to be week. that, is it going to be hard to make money in any asset class this year?

guest: there's always a place to make money. in still positive on india terms of the global market. i'm not positive on emerging markets generally, but i think india will do well. of the u.s.e parts market that do well in some stocks will get so cheap that even know the market is down, there will be a turn. betty: china, you are a little less bearish than some of those people out there calling for a complete recession. you anant to play for interview with mark folder and this is his take. we had a hard landing in the stock market already and the hard landing in commodities and

we might have a hard landing in the economy. we have a colossal credit bubble in china. betty: could he be right? guest: he surely could be. i have great affection and respect for him and his views. i read his material every month. that ispoint he made serious is the credit situation. that in myto surprises and i am worried about that. system isnking integrated into the people's bank of china and they have plenty of reserves. i don't think it's going to be a problem in 2016. the difference between us is that i think they are going to slow down a lot but not have a hard line. how do you think they

have done so far managing the economy? i think they've done a terrible job managing the markets but a good job at managing the economy. on thee very savvy economy and remember, there's something very important happening in china. they are rebalancing the economy. sector is a very strong. the manufacturing sector is weak. themanufacturing sector is consumer of commodities. when you look at exports and the purchase of commodities in various countries around the world, that looks terrible. but if you look at the service sector, that is quite strong. that was his big surprises for last year and what came true and what it in. coming up, north korea says it has tested the first hydrogen bomb. what the fallout is,

particularly for its neighbor china. former defense secretary bill co hen joins us. is the next wave of innovation 3-d printing or something else? the head hp labs will join us from the consumer like chronic show. accelerating losses toward the close -- now bouncing around the lows of the session, but still down 300 points. ♪

betty: welcome back. markets are just coming off of their lows, but there has been some selling going on in the final hour of trade. this is the worst start since

2008 for the equity market. julie: with the s&p 500 down about 3% on the early days, as betty mentioned, all three averages are lower. just looking at some of the market details, the s&p 500 sees a gain of 18% in volume versus the 100 day average. not necessarily a good indicator if you are able here. 458 stocks are lower within that index. not only preponderant in the depth of the selloff but the breadth of the selloff. oil has been interbeing all day. oil is now down by 6%. we will be watching that and

updating that into the close. scenario, risk off people are looking for places to hide, and gold is one of those places. gold prices tending up by about 1.4%. treasuries are another place where we see money flow today. around 2.19 when those numbers came out. volatility kick up today, up by 10%. that's a notable marker and we saw volatility for all of last year. a lot of option traders say they expect that to continue this year. betty: the fear gauge. thank you so much. that korea's announcement it has successfully tested its first hydrogen bomb's review not -- reigniting tensions with china, the u.s. and the world. it has been met with widespread

condemnation and skepticism. the white house says an initial analysis is not consistent with an h-bomb test. joining us from washington is bloomberg world affairs contributor, bill cohen, founder of the cohen group and former secretary of events. whether or not a have detonated an h-bomb is not the point. this is a troubling development in north korea, right? it's a troubling not a way for north korea and south korea, but for the world, if in fact this were an h-bomb or thermonuclear weapon. it would impose a more serious threat to japan, to china itself, as well as south korea, , hawaii and the western part of the united states. were a serious if it hydrogen bomb. it is doubtful, but we will have to wait and see. ignored and they

cannot be appeased. we have to call upon china and say what is it you divide the north koreans? food and fuel. perhaps you should reconsider how much you are going to supply under these circumstances. second, we ought to have a terminal high altitude defense capability which is a defense against ballistic missiles that should be used in japan and, i think south korea as well. to send the signal we are going to defend our interests, allies and ourselves against this kind of country. the third thing we should do is look at the possibility of mandating inspections for those ships coming out of north korea going to various countries around the world. trade in?ey weapons, nuclear technology, counterfeit currency. those countries receiving those

ships should open them up and see what is inside. in the event they failed to do so, they should face some kind of sanctions. we need to ratchet up the pressure to the north koreans saying this does not go without penalty. you cannot continue to destabilize markets or oppose a global threat without some kind of consequence. we have to have a comprehensive program and we don't have one right now. these are all very powerful suggestions, but the likelihood of any of that being implemented is probably quite small. bill: i don't think so. given what is going on in the world, if you look at isil and al qaeda and other groups trying to get their hands on nuclear materials, if you have a country like north korea which is known to have traded with other countries, to pakistan and iran, seeing the spread of nuclear capability is a threat to the

entire world. i'd don't think you can say , it'ss not much we can do a hermit kingdom -- we have to take some action and make them pay a penalty which they have not paid today. betty: you mentioned at the top, china. they are a key driver and they are reluctant to toe too hard a line on north korea. see millionsnt to of refugees flooding out. they have to worry about their own security. factor theys one have to take into account that they have to balance that against the fact that the leader of north korea is not printable. he could just as well turn a nuclear weapon against beijing. the notion you have someone who , someone whoble

was the real link and agent going between china and north tells you something about the unpredictability of kim jong-un. i would say china should be concerned and if this goes unchecked, we will see the united states, japan, south korea and others. china may find it to be adverse china wouldtance -- not like to see this system in japan, so they will be concerned about what we are doing in response to protect our country and allies against the potential of north korea launching any kind of attack. thank you very much. we will be right back with more on the market selloff. we are coming back from the lows of the session. ♪

julie: i'm julie hyman and it's time for today's options inside. joins me from the cboe and chicago. great to talk to you today on this day when we see this egg selloff that is accelerating here. you and i were talking in the break and we are seeing about a 10% increase in the next today. you tell me that you are surprised if not a bigger uptick in the vix. the lasthave seen that couple of days where we have seen relatively large market moves and muted reactions in the vix. that shows me a market that is prepared for this. a lot of people saw this coming and were hedge for this. think about getting punched in the stomach when you see it coming and being punched in the stomach when you don't. there's probably a higher floor to this market than a lot of

traders are looking for. we are probably approaching a near-term bottom unless there is another event. julie: just quickly because i want to get to your trade, does that mean you're not putting on additional protection as we see this selloff? mark: no, and really nobody is. it has been selling protection back out and that's a sign we think people are thinking this is a bottom. ofy were hedge the week christmas eve and the week prior to new year's eve and we are seeing some of that taking off people -- with people sitting on their hands. maybe we will see some by orders at the end of the day. julie: your trade is on facebook. so-calledoking at the fang trade -- facebook, apple, netflix and google.

facebook has done quite well but you are looking at a more cautious strategy? i like facebook a lot. if there is softness, let the market come to me. long-term, that will have a valuation north of google. instagram maybe in 2017 or 2018 will produce more revenue than the facebook flag site. the jan 22 for about a buck and a quarter. let the stock come to me, otherwise i keep the money in my pocket. julie: definitely a long-term bull. thank you very much. coming up, more bloomberg markets. ♪

from --- scarlet: live, betty: live, from bloomberg

headquarters, mark crumpton has more from our news desk. mark: the white house does not believe the north korean claim that they conducted a new nuclear test. >> the initial analysis that has been conducted from reports overnight is not consistent with of a korean claims hydrogen bomb test. changed in our assessment of their technical and military capabilities. market: they are pledging significant measures to condemn the tests, but the russian ambassador says that it would be going too far to say that they support more sanctions against pyongyang. thousands will vote today to repeal obama care. unlike dozens of previous attempts this bill will actually reached the president asked. at -- alreadyeady

passed the measure and made it filibuster proof. it would also defund planned parenthood. tosident obama has promised veto. the house has voted 61 times to repeal the law. the man who bought the guns used in the san bernardino massacre has pled not guilty to charges. he appeared in federal court in riverside to answer to a five count indictment alleging that he conspired to provide material support to terrorists. the jury trial was set for the 23rd. offaces 50 years behind bars convicted. it's welcome news for estate suffering from a severe drought. the first of a series of storms has begun hitting california. el niño was expected to bring heavy rains the state. officials say that even the wettest of winters will replenish water tables left drive-by a lack of rain for the past four years.

24 hours per day, powered by our 2400 journalists and 150 news bureaus around the world. back to you, that he. we are less than 50 minutes away from the close of trade. markets are bouncing back and get -- a bit. abigail doolittle is live at the nasdaq. give us an update on these technical glitches. abigail: technical glitches were ofecting the cancellations some orders, saying that small gateways are experiencing and we will be sure to update viewers. turning to one of the top tech stocks today, netflix was the top tech stock of not -- of last , first after jason hosting defended the stock in a note, overg that the weakness

the last month represented a buying opportunity for economic expansion into india, amongst other countries -- countries. they confirmed the possibility saying that they are now selling streaming services in india along with 100 other countries. reed hastings said -- you are witnessing the birth of a global tv network. turning to another tech titan in the news today, yahoo!, the stock has been traded all over the place to some degree as activist investors having courage the company to make changes to the board and management, saying that the recent decision to spin off their core web is this is not acceptable, following pressure from other activist investors last year, including kenyan capital and spring aloe, reflecting disappointment around the likely 40% drop in profits in 2015 from 2012 when the current ceo took the helm. betty? much,t: thank you so

abigail. staying with yahoo!, they are responding to those calls to make significant changes to the current -- to the company. rebecca newfield said -- we will share additional plans for a more focused yahoo! on or before our fourth-quarter earnings call. four months activist value has been agitating for this change. is there going to be any change ahead? let's ask the chief research officer at idc research and follows yahoo!, joining us from framingham, massachusetts. ok, so do they have a point here? clearly the stock is being battered based on this outlook. what they are suggesting, does it sound reasonable? >> the bottom line is the focus is where this company has to go. when you look at a complete like google, google can afford to not be focused cousin have this

massive cash cow tied to their search revenue. yahoo! has tried multiple different avenues for growth, with real jewels, like tumbler, for example, but it hasn't panned out. they have a couple of things beneath the water line -- like sports, for example. some of the other web businesses do ok, but they are not focused. they are spending too much, there are too many people, change probably needs to come to start restoring investor scarlet: what do they need to do, exactly? this was their point, they may need to renovate and fix the core business, which i tend to agree with. someieve that there are jewels there, but they probably

need different leadership. leadership where i agree with the point it's often said. youworld is changing and have got content companies and broadband companies, if you will , kind of coming together. you saw the aol verizon deal, for example. you are now seeing that yahoo! has a lot of traffic and potential. the problem is that they are neither fish nor fowl. they are not really excelling in the content is this and they are certainly not in that broadband network is this. i think that someone who ,nderstands that media business a strategy that leverages that media business and potentially executes overtime with someone who has experience in that networking business or that core content business, they could probably do more with the company. it's kind of not a greenfield any longer. scarlet: that's clearly the crux

of the letter. let me read you from part of that long letter that he read. he said that your solution will require another year for shareholders to wait while the existing leadership continues to destroy value and is not acceptable. is he being too hard on management? destroy value? so, he wants attention, right? destroying value is a very strong term. there's a lot of charged language in there that implies intent. it implies things that i as an outsider don't believe is the case. i think that the core point is that inaction is not a strategy. let 1000 flowers bloom is not a strategy. they need to basically decide what the core asset is going to and then -- how do they put more wood behind it? this inaction is eroding

investor and frankly customer confidence and that can be destructive overtime. scarlet: thank you, crawford del prete. ,p tried to jumpstart growth and a sure fire way to do that is to come up with groundbreaking innovations. what is on tap? cory johnson has been at the consumer electronics show in vegas and a standing by with the chief technology officer, the head of hp labs. corey? cory johnson: now we have two of them to worry about. i think the most interesting part is the old part, the printers, the pcs, the innovation there. you've got to agree, that's your job as the chief innovation officer. talk about what you are trying to do that's different here this year.

>> we are trying to get back to the roots from many years ago. innovation, driving technology. we are doing that two ways you're at the show. one is the core pc business and the second is in our future business, what are we doing and where are we driving long-term? scarlet: -- cory: how do you differentiate and still win on the price? >> i would call it a changing world out there. what that is that what's happening is changing out there, it's no longer consumer and commercial, but it's both of them together. people want to be able to buy one system that they can use at home and at work. this is what we introduced this year. the elite books portfolio. the world's lightest and thinnest notebook. four point four millimeters, 2.2

pounds, less than one kilogram. full open completely. complete audio integrated into it. you can do skype for business rather than having a dongle go to a phone, you push a button and it automatically connects you. we actually have some software optimization that we do. one of the unique things about that is that the optimization 10 hours can do over of battery life and a lot of that is software related. also, software and the bios are we then security from the forefront. mark: cory: -- where are you -- cory: where are you guys in terms of market share? >> we number one in commercial space. we are at about 23%.

be there?ok to >> we are ok, but more importantly we want to lead in that segment. cory: there have been times in the past of hp in which the company has gone after market share at the stake of profits. the sake of profits. >> we are going after profitable, healthy businesses. it is the focus for where we see those pockets of good opportunity and really, going to focus on the innovation that drives us. cory: not to get to carrot top with the props, but what is this with wearables? >> we started this one year ago and it really was a focus on

what we believed was the best way to do wearables. subtles time and is very notifications. motion is done by them, but we do all the engineering work behind it. senate, theic communication, the cloud, that's all us. we taken that and made it scalable. we can do that with large fashion brands to create unique watches. so that it could be like a phone call comes in, a text message from your wife, your social feed. particularly things on your phone. talk to us about printers. printers have been historically most of the profits and much of the revenue for hp. >> it continues to be a great

profit pool for us. a strength. changing overtime and moving into what we call graphics, large format printing to do digital printing presses. that's where the biggest growth is. beyond that it's moving into the future and the future is 3-d printing. the core technology that we have in our printing business leverages directly into that. we own that technology. it's called multi-jet fusion. we announced it last year and it will go after commercial implementation. .t's consumer markets 95% of the prophets in the business are actually in the commercial segment and that's the segment we are going after. our printing -- people printing more or less? >> it hasn't changed, what has changed is where they are printing it. if you look at the paper itself,

the volume hasn't shifted that much. really appreciate your time, thank you very much. scarlet: thank you very much, cory johnson. that was pretty cool. stocks making their way off the lows of the session. this is the worst start to stocks since 2008. you can see that the s&p is pretty far off. ♪

scarlet: good afternoon. welcome back to "bloomberg markets." the fed release the minutes on the historic rate rise decision back in december. stocks dropped some more after that but they are coming back a little bit.

joe weisenthal joins us now with some perspective on this. the minutes show that it was a close call, right? not surprising that some members definitely thought it was a close call. of --ow, there was a lot even among the general concern about whether they would hit their inflation targets or not, they are confident they will, they think they will, they would not have raise rates otherwise. you can tell that there is this anxiety. rightaw the dollar fall after the minutes were released and there was this interpretation that the minutes cast the decision to raise rates in a dovish light. people are saying, like byron ween, that at the most we will get one more rate hike this year. people are kind of stepping back their views this year. joe: there is definitely a big gap growing between what the fed indicated and its last dodge.

there is definitely a pretty big gap between what the fed has forecast and what the minutes are in terms of the long term. that number seems to be coming down from the market perspective. and the more they go down, the more it seems like the fed is not going to go ahead. >> there's definitely an interplay between the fed in the market. scarlet: thank you, joe. as we head towards the close of trade, here's a look at the averages. ♪

-- betty: we: -- are nowhere near making up the losses from today. julie hyman more.

julie: definitely not, even though we are not at the lows. interesting marks on options trader a little while ago who said that options traders at least are signaling that this could be a bottom. they are not putting on more hedges as we see the selloff against more declines. all three major averages were still pretty deeply into the red . as we have been talking about, it's a broad-based selloff. take a look, everything is red in your real sectors here. energy, as it has been all day, is the worst-performing group in the losses have been getting worse all day. material selling off among the worst-performing groups. among the energy stocks today, it's really notable the depth of the declines among the individual movers. southwestern last year, down another 13%. showing double-digit declines, a big selloff in oil.

after the fed minutes we saw a bit of a late lower at 5% down, looking like we would be at the , really aentially significant selloff. there's one point where oil is even lower, western canada. this caught our eye today. the tenure chart, 1997 is what they are looking at there. talking about oil that comes from canada, in many cases it's a more costly refining process. in addition, when the export that it comes to the u.s. in many cases in the u.s. is pretty full up, as we saw in those cushing, oklahoma stockpiles reached a which record. one thing potentially helping the canadian oil producers is that the looney's lower versus the dollar. their local costs are in loonies. interesting effect, but a quick

check on one of the best and worst performers today. apple, lower again after being downgraded by rosenblatt, check out netflix, the best performer last year, continuing gains today, up 9% after rolling out another 130 countries. really interesting there, not unexpected but the stock is getting quite a pop. betty: it is. have you love -- are you watch that latest doc you series? it reminds me of "breaking bad," everyone says you have to watch it. staying with the markets, i want froming in michael regan gadfly, our new commentary section. give me your theory on what's going on.

mike: energy companies are across-the-board down, many are in dutch -- double-digit declines. clearly the biggest losing groups are energy. the group has shrunk to such a small part of the market because of this, it's only 6% or 7% of the s&p by market cap, bigger drags came from technology, the heavyweights in the index. your cyclical groups, industrials are all down significantly. really, all eyes then turn to china overnight. i was reading him -- reading a note from michael pervez who said that the scary thing about it is that it makes it appear currency isng the their go-to move and it makes you worry about a full on currency war in the region. fromu look at these moves monday and today, 0.6% weakening on each of those days.

that's rivaling the devaluation of august in terms of china moving its currency. there are the very significant moves in the currency this week. if to hammer home the point, the world bank story came out this afternoon in which they pretty much cut their global gdp forecast to 2.9% from three point 3%. china going to 6.7 from seven. right, is all: consistent. what is going to get us out of this slump? mike: it looks like even excluding energy companies, a drop of 1% outside the energy industry, the tradition has been a pretty good beat, surprise on the upside, but i think that this quarter really needs to crush those estimate. fed decidedif the not to raise the rates again? mike: people would get excited

about that. betty: doesn't sound i could, but a shot on that anyway. mike, thank you. for more commentary type it g-8 df on the terminal. that is it for "bloomberg go we arebefore we just a few minutes from the closing bell, coming off again as we mentioned off the three-month lows that we are hitting in stocks. the s&p is down 1.4%. energy, as you heard mike say, the worst performer right now. not unexpected given where we saw oil prices today. we will be right back. ♪

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

♪ [closing bell] betty: u.s. stocks closing lower today, seeing their worst start to the year since 2008. joe: the question is, "what'd you miss?" betty: one guess says that the hard landing school of thought is wrong. joe: we look at the latest move in the ruble and what it means for russia. greece in 2016, what are we missing about the indebted nation? we begin of course with the markets. another day, another selloff. we have resumed the weakness that we saw at the end of last year. we all know what happened in 2008. joe: it's another grim day on the market, it really sort of started last night.