producer really does go public, its refining empire maybe the real prize. bmw is in the driver seat. we go to one of the world's biggest auto shows for a preview of the new hot models. joining us, bmws ceo for north america. ♪ david: welcome to bloomberg . stephanie: back froa big football weekend. more of a rainy weekend. jonathan ferro's is here with us -- jonathan ferro's here with us. late too late to sell, too to buy, but maybe the season

will change. we have companies like apple starting to sell. will fundamental investors are member that they love those companies? jonathan: i don't want to divulge too much of what i did over the weekend. it looked rocky when you saw that move in the south african rand. a move of 10% on a currency pair, something is going on. stephanie: an emerging market currency that is so dependent on commodities. things are not heading in the right direction. he was the first word. vonnie: the u.s. wants to extradite the world's most wanted drug lord from mexico. el chapo was arrested following a shootout. last july, he had escaped from prison a second time. hours after the arrest, actor had penn revealed he secretly interviewed el chapo in new mexico. north korea's leader once his

scientists to build better bombs -- wants his scientists to build better bombs. he says it is his expectation that they will advance the research. fans are warning the debt -- mourning the death of david going. -- david bowie. ♪ a statement on his facebook page said he had been battling cancer for 18 months. he released his last album on friday. global news, 24 hours a day. markets now with julie hyman. >> that they you look at where futures are, we are seeing indications for a bounce back for the worst start ever the dow and the s&p 500 and the

first week sent -- and the worst week since 2003. there were a lot of global concerns pushing down u.s. stocks. of theake a snapshot selloff by looking at the world market cap. the top line here is the world market cap. that is as of friday, it represents an erasure of about four and a half trillion dollars. below $60e went trillion with the declines we saw in china. all of them extending last week's decline, not bouncing back. producer prices were down for the 46th straight month, interpreting to some of the decline. it seems the rest of the world is proving resilient with futures up and european stocks of.

crude oil continues to lower. it is something that has been putting pressure on the overall sentiment that has been surrounding it. the south african rand, a very commodity driven economy, 37% of its exports go to china. you see here, this is the dollar versus the rand. many -- many of you saw a flash crash in the rand. it had to do with margin calls from china -- japanese investors and that is something that caused it. to did recover by the end of the day, finishing 1.5% down. jonathan: a monster move in the south african economy. 15% year to date. stephanie: china's stock market

has lost $1.3 trillion this year. jonathan: big moves over the last week. we have hardly asserted the year and we are already seeing the light -- likes of june, july, all of them. there is no let up on the negative sentiment on china right now. we saw the ppi down -- data which underscore the stories are running the factory and manufacturing sector. that is not especially a new story. economist says there is some kind of civilization happening, look at demand for credit and house prices, look at the consumer holding up even if the stock market came off last year. we got some big numbers in industrial export. the numbers may show china's economy continuing to stabilize

and that might add to the narrative a little bit that there was a disconnect going on between the ongoing global economy and the stock market. to come back to the question about the remarks over the weekend, it seems to me that we want it both ways, we want there to be a robust economy which means a low yuan, but we ,o not wanted to fall too far so we are caught between a rock and a hard place. >> this is precisely the problem. advocates not want to bigger stimulus packages they are trying to talk down what the government can do. it does want to let the market push down a little bit. cannotsame time, i afford to let it go too far down because the capital out low. that is burning up the reserves as they try to cushion the yuan.

forceotentially will banks and interest rates to further offset with liquidity tightening. they also tohand, work against their own ambition because of the market versus. it is just an example of how the state remains in china's market and economist party cannot let go. stephanie: thank you for joining us. let's take you to chicago where we are doing -- joined by jim of the elco research. research.co u.s. stock market has declined. what is your outlook. isi think that what you find the first week of the year, it is historically one of the most volatile.

most institutional investors shut it down and in -- in december and in january they have a big catch up. this time, the big catch up was to sell. when you get this volatile, there will be sharps and snapback. some of the biggest rallies in market histories have occurred in bear markets. i would not be surprised if we had some sort of sharp jump back. the first one we were talking about was china. i think it is really about capital outflows. everybody wants their money out of the country, that is why the yuan is weakening. nobody wants to say it because everybody goes to jail when they say it over there and i'm not kidding about that. earnings are starting this week, they are not looking very good, even on a next energy basis, we expect a decline. the third one is the fed. the fed keeps talking about

raising rates four times this year. they keep saying it is gradual. four is aggressive according to the market. ubshanie: we sat down with ceo sergio armani and he said they are doubling down on their business there. we have to expect some kind of adjustments for 2016. these are also good times to plan for the future and that is why we are starting to implement our strategic plan in the next five years. we will double our count in this region and grow all of our businesses. stephanie: you make the argument that some of the best investments are made in bear markets. is that what this is? it might be, but he also said they will double their staff, adding 600 people over the next five years. that is 10 people among the next month the next

years. if you want to take his words directly, there'll will be an adjustment in 2016, that is code for it is not going to be a good year. us, we havey for another year or 18 months of trouble in china before we start to see them turn around. want to see your thoughts on a move from the fx market. i remember the bank of england -- international sentiment saying the abnormal becoming normal, it is one of those things, but people wake up monday morning and seem to shake it off. should we be concerned by big moves like that? >> we should be because there is a transition going on in all markets. fx is not immune to it. we are seeing a lot more flash crashes. by one metric that was 35

crashes for crude oil in 2015 and that will continue. as far as south africa goes and the rand goes, they have a lot of trading that they do with china, so every and is focused on china, right now in the first thing they did when they opened up was they fell out of bed because of worries about what is happening. >> speaking of currencies and china, let's look at the yuan because the pboc has talked about by having its currency versus a basket of currencies. that, theied to mimic blue line is the yuan versus the dollar. we have seen that the evaluation. it is not gone down as much versus the basket of currencies that the pboc is watching. it suggests that one is going to be value further, but it 1 -- you wonder if it's going to be an the expected fashion or in

these -- in these abrupt starts. how much of a shock is it going to continue to be? >> there is going to be more weakness in the yuan. the one to watch is what we call the offshore one which in many other countries is known as the black-market rate. a lot of people are trying to get their country -- the money out of the country. i think you will see continued weakness. they will try to make it as orderly as they can, but market forces will overwhelm them and force them to eventually push the currency lower. the only question is when, not if. david: the situation with the reserves in china. we always thought of them having so many reserves and now they have about three children -- three chilean dollars -- $3 trillion.

>> they have a whale to go because of the big number of reserves, but it does bring up an effect for the u.s. given all the weakness in the marketplace, most commentators would've expected that the 10 year yield in the u.s. would have been under 2%. it is still around 2.15%. when the chinese are selling their reserves, that is another way of set -- saying a are selling u.s. treasury's. we are being met by selling from the chinese because of their therves requirements and two are meeting in the middle and canceling each other out. thanks very much, jim bianco in chicago. still to come, my saudi orang go selling some of its assets. ♪

vonnie: here is your latest business flash. sachs say the u.s. stock markets are in the last innings of a bull market. they expect single-digit returns. activist investors pushing macy's to cash in on its best real estate holdings. a letter said that even selling a small stake in the property would send stock prices higher according to the wall street journal. ast week, macy's rejected

full. says oftors founder than two years, you will be will caret into a self driving that can take you from los angeles to new york. david: thank you. in today's global go, we focus on saudi aramco. the company is now considering selling shares of its refining assets. we are joined from london. go, whyis the way they will that be? upstream which is what everyone's -- caught everyone's attention -- it is the oil fields, it is what has power the entire country since its creation and i think it would be a big step, starting with the refineries, a slightly

more easy way to go. they can package assets outside saudi arabia, it is a big global company. it would not involve doing audit of what's left in the oil fields which may be that which they may be slightly reluctant to do -- which they might be slightly reluctant to do. when they first announced an ipo, -- it is a fairly big company, it stretches from louisiana to japan and south korea. they produce 3.1 million barrels of oil a day and they look to expand. it would be a play on growth in for -- growing demand it would be able to attract a lot of people, but not perhaps on the scale that we are thinking.

jonathan: the other side of the story is that downstream is doing ok. downstream business has been keeping pretty level. is that the other takeaway, that the downstream business is not the worst time of the world? >> you are quite right. the downstream side of the oil business has been doing quite well. aramco --ies like there may be a little effort to drive appetite for the sale, if and when it happens. we don't know exactly what their plans are, they said the tutoring all options -- considering all options. there are a lot of commentators in saudi arabia that say that this may prove to be the more likely option. we have saudi arabia

production in green, the oil saudi arabian currency in blue. obviously it is going down, production has been going up because saudi arabia has been trying to put pressure on u.s. shale. it is not looking too good based on this chart. jonathan: will kennedy, thanks for joining us. will -- will be infamous drug lord be pressured into the u.s. and how did his capture of last week make mexichem authorities look? s&pres on the dow and the will trend higher this morning. civilizations for the chinese currency, this morning. ♪

jonathan: good morning and welcome back to bloomberg . mexico reportedly preparing to extradite el chapo following his dramatic capture last week. mexican authorities say actor sean penn who secretly interviewed el chapo in the rolling stone led them to the convict. eric martin joins us from mexico city. and mexican authorities would like to call this a success. over the weekend, it looks pretty embarrassing. thate can't forget although mexican authorities did it was theapo, authorities and the weak rule of law and corruption that allowed him to escape from jail last july in the first place. some analysts feel like this is

the minimum that the mexican government could do in response to that kind of outcome just six months ago. stephanie: how bad does this look for the president of mexico seeing as it makes it clear that there is such a week government and corruption at a time when he is trying to show the strongest hand, possible? >> this definitely is something that investors are aware of about mexico. the week rule of law is something the economists are aware of. the country has seen thousands of people killed in the past decade of this drug war, as well as another 25,000 who have gone missing. analysts and the u.s. government that mexicog signs is willing to extradite el chapo. captured,hen he was the attorney general at the time said that he could be extradited but only after 300 or 400 years

of jail time in mexico. at that time, the government's position was not contemplating allowing him to face justice in the u.s. a lot of analysts are welcoming this about-face. why didthis -- david: this happen? and how likely is it to happen anytime soon? certainly shows cooperation between the mexican government and the u.s. wasnew attorney general shown to be much more willing to extradite criminals. we saw a number of extraditions in september after el chapo's escape. in terms of a timeline, analysts say this could take anywhere from six months to years. appeals tofile many extradition and this needs to go before and can judge and the

mexican legal system, which could take a very long time -- this needs to go before a mexican judge and the legal system, which could take a very long time. david: now there seems to be a rough time of having reforms. >> this was a big embarrassment, a humiliation for the president, six months ago when this happened. this helps to get things a bit more on course but as i said earlier, the government was the one that allowed el chapo to escape in the first place. u.s. analysts and politicians even -- stephanie: we have to leave it there. thank you and we will be back with more bloomberg . ♪ 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. stephanie: good morning, you are watching "bloomberg ," and you are watching beautiful but chilly midtown manhattan on this

monday morning. david: sunny but cold. stephanie: better than yesterday morning which was raining. sunny and warmis here in bloomberg headquarters and joining us is bill daley. thank you for joining us. >> i came in for the weekend for some wedding plans. stephanie: i hope you have a good monday morning here. let's give you some first work news. hears: a supreme court were today about news that could have an impact on the labor union. they could choose to not become members. a group of california teachers disagrees with- union positions. union say they can ask them to pay for collective bargaining.

people can't drink from the top right now. sheriff's deputies are just a reading water in flint. lead showed elevated levels in blood of some children. at oregon has entered the second week. the art protesters say they won't leave until they transfer federal lands to locals. the mother of those locals are calling for for locals to send supplies. that is your bloomberg news/. i am vonnie quinn. jonathan: let's cross over to the city of london. tom keene is setting up camp there. good morning. tom: everyone misses you. it is sick. it is how is john, how is he? i said, it is he kidding me?

he took two extra suitcases to new york to shop. let's look at the morning must-read. markets understood the gravity and the bestsis indicator of a country's future economic prospects is the its citizens make about keeping capital at home or exporting it abroad. i would argue that this is a litmus paper for what we do in the u.s.. it always indicates the mood at the trends of the market. david: chicago does lead the way on futures. also -- we can't also pay too much attention because the markets predict -- two possessions. onionhis is larry summers summers uncle.

withw that he'll gailey is you in new york. i'm curious, when you look at the markets in the depths of the chicago financial system, what do you see in terms of liquidity? stephanie: we have to update you , we have breaking dealnews. shire will be combining with backs all that. xalta.h ba shire has been inquisitive. it looks like $18 in cash per share. you see they're how the shares are doing in the premarket. shire is an irish company that trades in the united states as well. it looks like it is a done deal. we have reported that it might be closed but there was a lot of back and forth. david: the markets didn't

interfere. let's have tom re-ask the question. bill: i've got it. there's no question that the world has changed its volatility. i don't think it will be reflective over the next six weeks but it will be tough. it is based not just around markets but also around china and the difficulty with their economy and the debt situation, there is real reason for what is going on in the marketplace. tom: i would respectfully suggest that the daily family looks into giving confidence to an economic system. larry is very big on the need for confidence right now. judger policymakers to confidence. how confident is your america? i have very confident. you have to say that the united states is much more strong than

the rest of the world. at some point, policymakers have to come together. whether it is the tax reform or dealing with the long-term tax reform and debt in the united states. or thelook at the fed eu, they have done about as much as they can. and you now have the divergence and also them raising rates. so the policy makers and politicians have to do what they are interested by the people to do. that is to make policy and make you will seelly policies that will stimulate economic growth. stephanie: to you feel confident that after this election we will see those changes, given the absolute gridlock that we are in right now? generally in the first two years of the new president

to get an opportunity, whoever the president is, for real action. i really think paul ryan has said this strongly. he is the new face of their welcome party in washington and he is intent on doing something. and whoever the president is will have to face these problems. we can. if we do, we will have real difficulties with the american people. back on: quickly, to go the piece about using markets to predict the next recession, can we do that anymore? the moves in copper are ,creaming of a global recession like ways with high yields. we see it again and again but they don't predict recessions in the way they used to. that thetally agree markets are moving more rapidly and more sophisticated late -- and in a more sophisticated manner. that being said, what we have

seen in the last number of days, it has been extraordinary. i was flabbergasted at how weak leak -- at how weak we closed on friday. keene.that his tom thank you for joining us. i'm sure you want to go out and do shopping. we will turn it back to bill daley. it is a good thing to hope in the new administration that there will be reform but all of the candidates, i don't hear any talk about tax reform and things like that. i hear about penalizing wall street. but that is not about growth. taxing wall street won't give us growth. where is it going to come from? they don't have a mandate. all of them are rather sophisticated, and again, i look at paul ryan. he understands the needs and he understands the tax reform, not

just about lowering rates, but also real reform and change. andan stimulate the economy it will do it at some point but we have to think about the long-term debt situation in my country -- in our country. we talk about china but we don't have hours under control. toh some point we will have do that. i am an optimist. and i think in spite of the craziness of the primary season, when you get to the general election, at that point, people will have an actual plan. stephanie: what do candidates need? when they attack wall street and say, let's tax wall street, what does that mean? if you get thek opportunity to ask them, you should. what it means is, i'm standing with you as a populist. i am showing anger towards wall street. and that continues on both sides of the aisle. the only thing donald trump has

said about taxes is about the interest for hedge funds people. which everyone is for except the hedge fund business of course. plan thatt a real will stimulate the economy but it is a good speech to get people lifted up and hillary clinton does the same thing and bernie sanders is beer he strong on it and is almost basing his whole campaign which is gaining strength right now on attacking banks. toathan: it's one thing blame wall street and another to talk about china. we are so tight into china that when china goes back -- goes bad, we go bad. that is not to our advantage. we have to be smart. devalue the currency. what that is doing is stopping our companies from being able to compete with china and other isces, including japan which

doing big devaluations, that is not good for us. these countries devaluing currency it is a bad thing for us and china wants to do that again to get itself out of a problem. these comments from donald trump, we hear it again and again and again, we never interrogate the comments in the way that we should. it is a global economy, of course china will impact the united states. for a man who says he is pretty smart, he sounds stupid when he talks that way. it is silly but it is great politics. stephanie: he sounds pretty stupid, but it is great politics. isn't that jarring? isn't that of setting? david: it isn't surprising. you have had two important jobs

here. david, he is a father and a husband. four jobs. david: so you have done this job. what responsibility does a candidate have? not just a campaign to win but also to reassure markets? it seems like right now, the way to win the primary at the election is to say that we are in terrible shape. that we are falling apart and need to be saved. william: that is the dilemma right now in politics. the media plays with that. who is getting all of the attention? the person who is the loudest and seemingly stupid as voice out there. and they are saying things that are outrageous but they get in on his attention. they are serious establishment people, especially on the republican side.

when we get to the primaries, we see a different path. that depends on whether donald trump gets the nomination. does it matter? does it truly matter who wall street backs? william: not really. stephanie: these are new york voters, we know what will happen here. in terms of the election, does anyone care what we think? we being wall street? william: money is the big thing. and that is getting less relevant. street, it isll something to attack the banks but the financial service sector is rather broad. you are seeing a differentiation -- hillary clinton is going after the hedge fund firms. bernie sanders says he will go

after the banks. -- so as we know, the sector is difficult to pinpoint. it is a great political tool to be frank. have a new job now, thinking about investing. does all of this stuff in best -- all of this stuff affects your investment decision? really, it is a lot of noise. obviously what is going on in china and the middle east, it affects the market. but this political noise doesn't affect us. stephanie: we will take a quick break. bill daley, thank you so much for being with us. we are going to talk entertainment for one moment. maybe an oscar is finally in the cards for next boyfriend of mine -- i wish -- leonardo dicaprio.

he took home a golden globes last night for a golden globe -- for best actor. he is going to be in. gross, i'm not sure if he is going to come on tv with us. david: this is a big surprise. stephanie: not many people have seen his new movie but clearly they are going to now. the big win last night for leonardo dicaprio -- oh, i like that. matt miller is coming up from the international auto show in detroit, michigan. where you can actually drink the water today. david: flint is my hometown. stephanie: flint can't catch a break. ♪

vonnie: welcome back to "bloomberg ." there is a huge deal in the pharmaceutical industry. scheier has agreed to buy back baxalta.he -- buy based in illinois and could benefit from a lower tax rate because scheier is based in ireland. general electric aviation has signed a deal, it will provide super alloy titanium and aluminum for jet engines. fourth quarter in earnings will be reported today. aerican apparel ceo has made apparelbuy -- american

rejected a previous bid. and that is your bloomberg business flash. stephanie: you have to think about that. , he founded the company. he is a dramatic guy, known for his wild this analogy, but the scale of this company, $600 million and now they are a $500 million. -- have seen growth morgan growth margin go down. he is fighting his way back at a time when retail is sucking wind. heid: at one point, didn't have enough money to not hire his own lawyers? stephanie: it has been drama central. is an, dov charney extreme personalities so we can

predict his behavior. but there he is, he is upping the bid to 300 million. jonathan: matt miller is standing by for the auto show. over to you. match: yes, thank you so much. we are standing in front of the m2, a car that a lot of us have been waiting to see for a long time. .t harkens back do you want to do the honors? the global debut here. and there, absolutely cool. i love the shoulder lines. does it harkens back to the 2002, the 3.0, what are you trying to do with this? i would say it goes back to the 2002 turbo. but itgile, it is small

is 4.1 seconds zero to 60, less than eight minutes -- a good car. horsepower. is this a car you think you will sell a lot of here in the united states? there has been a move to suvs. i see you guys have a new and four explorer. you are going to come out with a new seven. do people still want the little sporty cars? ludwig: absolutely. this is what bmw stands for, the ultimate driving machine. we are very successful with sports utility vehicles but this is bmw. matt: what about the bigger ones? i know it is being built in spartanburg, it has become the biggest bmw manufacturing plant in the whole world? it has.

we are now producing more than 400,000 cars there. yes. it is the biggest plants that we have. roughly one third of the permit -- of the production goes to the united states. ago, it was 100,000 cars so it really has developed nicely. matt: i remember 30 years ago when you pioneered being production local. let me ask about more recent german issues. aur competitor has had serious scandal and they are still trying to recover. has that affected bmw sales? not really. the numbers have not gone down. they actually have gone a little bit up. we just want to give the customers choices.

let them decide. over the last couple of months, they have decided in favor of diesel. -- soso you will to can you will continue to produce diesel? ludwig: absolutely. matt: what about the chinese market? companies aret now designing cars more for the chinese market, the eager sedans ? we have had that for a while and you have a good foothold there, how is the chinese market working for you? ludwig: it is the biggest market for bmw. we have the biggest plant in the have been there for 40 years. it is an important market for us. a realhey have had market problems, do you see that affecting it the sales there? ludwig: no.

at a really growing high rate. it is good. matt: let me ask about what you are driving on the east coast. i know you are a big fan of the classics. -- i3.ve the eye three we are the third best-selling vehicle in the united states with that. i am currently driving the new seven series. matt: oh, ok. luxury. i had the pleasure of testing one. my wife sat in the back the whole time while i drove. stephanie: wow. that factoid is enough for one whole segment. david: i had a bmw 2002 which i

loved. was anybody sitting in the passenger seat? [laughter] david: we will have much more from the auto show coming up when we get back on "bloomberg ." ♪

stephanie: still to come, his firm is behind some of the biggest action in the media telecom industries. aryeh bourkoff is with us next. ♪ we live in a pick and choose world.

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so your sleep goes from good to great to wow! only at a sleep number store... find the lowest prices of the season, going on now. save $600 on the #1 rated i8 bed. know better sleep with sleep number. stephanie: reversal. futures indicate u.s. stocks will open higher after their worst week since 2011. corporation earnings give investors something to cheer

about. is aboutnext move whether it will be a big year for m&a. we will talk to be the dealmaker, aryeh bourkoff. oil at $20 a barrel? it will depend on the strength of the u.s. dollar. the glut is not going away at any rate soon. -- at any point soon. get ready for the big number two. you are watching "bloomberg ." with jonathan ferro. we are also joined by aryeh bourkoff and savita subramanian, thank you. we will begin with first word. vonnie: the u.s. wants to mostdite the world's

wanted drug lord from mexico. joaquin guzman was arrested after he escaped from prison a second time. hours after the arrest, sean penn revealed that he is secretly interviewed him in mexico. it is a supreme court case crucial for organized labor's. justices hear arguments today about whether unions can collect fees from workers who choose not to become members. mandatory fees violate the rights of workers who disagree with union positions. unions say they can require workers to pay for the cost of bargaining. and for more than four decades, he transcended the world. david bowie has died, he was 69-year-old. changes

ground control to major tom battlinge had been cancer for 18 months. he often performed in a jumpsuit with his alter ego. , i am news 24 hours a day a vonnie quinn. seeing a bounce back in futures this morning after the down week last week. a were start to the year ever for s&p 500. arefuture is tracking them opening higher. it is interesting that we are seeing resilience in the face of continued chinese selling. the shanghai composite is down as you can see. more than 5%. weakness there at continuing concerns about chinese regulators. but european stocks are trading

higher as well. they are not following chinese stocks lower, that is because they are gaining strength of this morning. in terms of currencies, the story of the day is the south african rand. flash jump here because you are looking at the dollar versus the rand. it is especially exposed to china and commodities. if finished down by 1.5%, a record low. japanese equities are closed however the yen is still trading and we are seeing it shows some weakness against the dollar, the biggest one-day drop. this is the biggest one-day move since august. we are seeing the yuan as well, that is falling as well. euro fell ashe well. let's get a check on oil prices

which are extending their decline, once again trading at the lowest and's 2004. over concerns.8% over global growth and the existing supply. jonathan: just under 90 minutes until the opening session. about 7.5tures are up points. atita subramanian, we look the futures and concerns, is there anything that can make us view that as a glass half-full? savita: this earnings season that we are heading into is not going to be enough to provide that positive catalyst for the market. hewth trends are looking and may, they are looking a little bit better but they are in negative territory. tracking minus -- even energy is positive 1%. it's not looking like a great season, but enough to get

investors interesting -- investors interested. sectorsre there some that might over perform? savita: the more defensive areas like health care. that is the best position heading into earnings. energy andreas are anything having to do with commodities. corporations are getting a little more positive on longer-term outlooks. one of the things we track is guidance. that is probably more important. companies are actually more positive heading into 2016 and they were heading into 2015, which is odd. burkenie: all right, eric , your favorite sectors -- bourkoff, yourh favorite sectors?

sectors seem to be healthy in the united states. in the u.s. but also overseas as well. the consumer in these industries are taking a lot of the power away from these illnesses in the past. we see digital video and brands coming to the consumer much more than being regulated through a gatekeeper. the consumer is strong. stephanie: the consumer that has more money to spend at that would be good for these companies? no? aryeh: it is a business model in transition. there are a lot of uncertainties around shareholders -- the consumer right now is helping for now, but we have a lot going on around the world which could change. that is a lot of pressure the consumer has to probably economy to fight back some of the macro trends that we are

looking at. savita: i would agree. the consumer, so far is so good. s&p hashe reasons the held up reasonably well is because the consumer side, amazon being the poster child for what works last year, it is that framework that starts to falter and we could take a real hit. manufacturing, we are already in a recession. consumer is the strength right now. jonathan: is the consumer really that strong? the story was cheap gas. alternatively, retail sales are set strong. with everything in the economy that we look at, there are a few factors that we .2. one is the inflation, it is very low. by a is leverage which large is very low except for certain cases.

there is a lot of cash in the system still on the sidelines. pension funds and mutual funds have more cash. there is a lot of cash on the thelines, not to mention balance sheets. there is a lot of dry powder still out there. .he consumer is the prime mover it is something to watch for, right now it looks healthy. stephanie: in terms of m&a, is the biggest risk to a company, inflation? if they have dry powder and their balance sheets are intact, is that the biggest risk that could hold them back? aryeh: no that is not the biggest risk. 2015 was a record year for candidate. that is because of elephant deals. the deals around $10 billion or more.

market will be a beneficiary of the ipo market, because if a private company can't get out of the equity market than the m&a market is a good option. but the primary factors are interest rates. financing costs. at the firsting time in several years, so far at a measured pace. but the strongest credit in media in particular, those markets are wide open. and media opens up the high-yield market all the time. so interest rates is the number one factor. jonathan: so corporate cash? the amount sitting there on the sidelines? japan has had that for a long time and it didn't move. is a lot more

shareholder activism than there is in japan. shareholders are advocating companies to return cash. buybacks, we saw buyback activity hit record levels. and what we will see going forward is growth. one interesting fact that might surprise you is that 50% of actively managed money resides in income oriented funds. so the world has shifted from toking from growth inventory. if i am in s&p company, and i don't pay a dividend, the first thing i do is pay a dividend. story morphedturn from i backs which haven't been producing a lot of of growth. big companies have more growth. that might be a big reason to own big cash companies. david: you brought up credit. mergersook forward to

and acquisitions, are you seeing people giving credit and being conservative? are they more resistant? aryeh: we are concerned about it, given the different factors that affect the market but we have not seen a pullback. the market is still strong. we are watching the cost of financing and whether it is doable. i think there is a shift from the cheap cost of capital and buybacks, companies are going to have to innovate and invest in their businesses for future growth. so there is nothing we can do that is more powerful than operate the future cash flows organically. huge multiplying effect. but it can happen. you have to user cash to be more expensive in an and him -- in an m&a way.

i think there is a lot more , companies will start using their cash for more innovative things as long as the financing market holds up. given what is happening ceose market, we're seeing move forward with the plan. stephanie: caution is what it is killing market technicals. no one wants to step in in a long way. is there a factor to change that and push investors to put a stake in the ground? savita: one of the reasons i think the s&p will do ok is because there are very few u.s. equities. they look better on a relative basis. from a flow perspective, if you to lose money from rising interest rates, you could see that money move into equities. and what better place to go man large defensive u.s. stocks?

big companies with lots of cash, it kinds of -- it kind of feels like if you can't own cash, you can own synthetic companies -- synthetic cash. it isn't that exciting a reason but it is a reason to hold the s&p 500 above other equity benchmarks. stephanie: we have savita bourkoff,n and aryeh we are just getting started with you. you are not going anywhere. when we come back, we are talking about a big media deal. we will take a look at that next. stick around, you are watching "bloomberg ." ♪

vonnie: welcome back to "bloomberg ." -- forgen ceo proposed the diesel engines when he meets with regulators later this week. he has a meeting with the epa on wednesday. he is trying to break an impasse over the recall of cars sold with software that allows them to cheat on emissions test. uber wants to speed up the price cuts. the service is offering discounts in more than 100 cities. it is the third straight year that they have cut prices in january. that is the bloomberg business flash. david: today, we are looking at shire buying baxalta. shares of both companies are up this morning. drew armstrong is joining us now. in the announcement, they say a lot of great things about this

deal. how much money they will save and make. why has it taken so long? baxalta hasn't been a company for more than a few months. it was spun off from the baxter health company and then shire and in after 30 days announce the offer. it took months and months to get this thing done. baxalta wanted more cash in the deal. they wanted money on the table and take the risk out of buying and they did. if you look at the cash now, it is substantial. $14 of that will be in cash. and so that is a good chunk of change that they are getting for what was previously and all stock offer. david: there were issues about the spinoff. drew: when you do a spinoff, and you take the company and use

been something off you can't have that come in and get it off by something else in the intermediate time. i don't have the answer to that. there will be a call later when we get more information. for this combined company is going to drop. there are tax energies in here which may have made it easier for shire to pay more in cash. it couldlating that offset the tax regulations. stephanie: relevant of the sector, tax seems to be the name of the game in the m&a scenarios. politicians and voters don't like it. how much of it is a concern in your business that you could see something be changed? can betax treatment changed for the positive as well. stephanie: spoken like a true banker. aryeh: we have some hurdles put

in our way, they have been good give value over time, particularly in media. that tax can be changed for the better in terms ,f the repatriation of cash markets that can't get back to the u.s.. that has been looked at for a long time, but it could be changed. we could have a selection where there are low taxes where we are. right now, taking a shot at one piece of the puzzle, ultimately we will resolve the shareholder value issues. inathan: what will get lost all of the tax issues is the fundamental reason to get together. in 2016, will we see more consolidation based on industrial reasons to do so? aryeh: i think so. we will see deal similar to this.

a lot of drug makers have taken a ton of heat for the price of their medicine. the rare disease phase is the exception to that. the argument has always been -- and government is on the same page about this -- you create a drug that helps treat people in a meaningful way where there is no other cure, people are willing to pay premium dollars to pay for that. in ways that aren't like cardiovascular medicine and things like that. these are unique drugs for small populations. as a result, that makes them very popular. jonathan: drew armstrong, thank you for joining us. will be with us for the rest of the hour. next, ande outlook futures are higher. ♪

stephanie: welcome back, you are watching "bloomberg ." about media deals and the guy who led quite a few of them last year, aryeh bourkoff, is here with us. yahoo!, what do you make of this? aryeh: yahoo! is one company that has perpetually been trying to find its way over the last few years. given the fact that it is hard to create value through operations, they have to use m&a. they are facing a lot of pressure for star board to do so. what is the right kind of thing for a company like that? all of these companies are looking for the next chapter. i think that at the end

has beeny, marissa brought in to create new products and technology to leverage the core business, not just use the alibaba asset. at the end of the day, it hasn't transpired in the way that shareholders would like so there is pressure to make a change. so they have to use strategic alternatives. david: we are seeing traditional media companies trying to get involved. toot of companies are trying get back in the game. what is the right strategic , for companies who say, i have to hitch my wagon to that star. console made a statement that digital media will be the number one way that people will spend their free time in the future. stephanie: of course he is going to say that, he is youtube.

but other technologies -- stephanie is wearing her job own -- digital video is the transition and a lot of new companies have come up over the years to create value. media traditional companies make that shift? that is going on and it is under way. it takes a long way to move the tanker. so there is a bit of a transition time which has created a lot of uncertainty in these companies. there is a lot of pressure right industry to make the changes more quickly. there is a hallmark and a tendency to be innovative and that hasn't happened as rapidly as people would have liked. stephanie: traditional media like time warner -- the new york post is saying that it is

rumored that there could be a takeover, aro -- takeover, carl icahn is rumored. it is too early to tell. to theit goes back frustration that the shareholders have around the industry. the move has not happened fast enough into new technology. time warner is the precious asset along with disney that doesn't have a controlling shareholder. jonathan: you are staying with us. up next, we go live from the international auto show. right here on "bloomberg ." ♪

when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them.

so your business can get back to business. sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. >> good morning. welcome back. we are about 60 minutes away from the open. dow futures up 80 points. s&p futures up 12 points.

wti up session -- off session lows this morning. toe it long and take it back 2003. we are low. wti down. david. david: matt miller is at the international auto show. a special interview for you. matt? matt: sitting here with bill. pleasure to have you on. thank you for joining us. down to another low. i know it did not make a huge difference at 45 dollars per at 35, but now that we are so low, it must be a boost to sales. >> i think you do hit diminishing returns at a certain point. customers have factored in

prices into their calculation. us is if itng for starts to's like again. volatility costs our customers heartburn. when you have extreme volatility, that is when people start to get paralyzed. the fuel efficiency of a new cars, i have an old ford miles per guess 13 gallon. the new ones are getting 28 miles or gallon. doesn't that lessen the blow if we have an increase? particularly in trucks, where it is often the cost of doing business, for passenger cars, it is a personal choice. they work truck is just another cost. anytime it comes down, it is a good thing. looking a little further ahead, the challenge will be with the

rising fuel economy standards we have ahead of us, and fuel run the risk, you of a disconnect between the customer's pocketbook interest and society's goals. matt: do you think after a record year in 2015 with record auto sales, we can continue this .ear >> one auto ceo's would predict the sales, everyone was so far off here we cannot predict next month. one thing i can say is the underlying economy looks fine. no reason why with low fuel prices, things cannot continue on. matt: the fed thinks it could get three or four hikes. >> you hear a lot of conflicting verbiage around that because many things not as quickly as we

thought, 4, 2 or three, we will see. as long as they are not dramatic hikes, i think it will be fine. from current business to future mobility. ford has taken the lead in these innovations. you have got so many different experiments going on as far as ridesharing and other things. what are you most excited about? >> we are really transforming the business from just being a manufacturer, to that mobility company, whatever form it takes. in 10 years, our business will look very different than today. we have disruptions in the powertrains itself, the ownership model. we are having disruption with economist driving.

a lot of different revenue streams around the world of mobility. they are trying to position us in terms of which makes sense for us. where do we have to put dissipate, where should we partner. we are going through all of that. matt: uber has a market cap sometimes larger than for. and yet uber only has an algorithm and you make the cars. business awayhat from them at some point? >> i don't know but the whole space, the transportation is huge. it is in the trillions. traditional -- none of the traditional participate in that space parity will see a different business model from ford in 10 years. it should be less asset intensive, with a lot of

different types of revenue streams coming in. it is the challenge for us that one that i love. matt: let me ask you about the share price. success storya coming through the financial crisis. have one market share, you're hitting record sales, and yet the share price is not seem to react. why? what is holding it back? bill: i am probably the worst person to ask about share price. i am probably too close to it. i think analysts are looking at it and saying what you said. record sales, how much better can things get? we are trying to smooth it out around the world and also get our margins up and then invest in the world to transform our company. people have not quite seem through all of that. incredible growth in

china. the numbers are huge double-digit every month. recent volatility in the chinese stock market, some people would use the word crash, does that really concern you? the underlying growth in china is still with the rest of the world would like to have a we are in it for the long haul. well positioned. we are growing. china isno question seeing some bumps in the roads and we are seeing that. at ford we are not feeling it. we are doing fine. the world is looking at china perhaps a little differently today than it did months ago primarily because of the stock market. matt: are you concerned about the economy? bit aboutre a little the dollar being so strong but economy is our

ticking along nicely and unless we have a shock, there is no reason why we cannot continue. matt: i will go upstairs and check out the white ford gt. and bill fordller in detroit. thank you. butse extending its slide it has come back close to even now. fallasting brent could more than $20 per barrel. vince joins us now. $20? vince: the balances we have been discussing will persist for longer. petroleum chain. take crude oil. inventory is 36% above the five-year average.

really have not had a winter or seen that demand. well above the five-year averages as well. take a look at gasoline. we had a strong demand in 2015 but that is likely to be challenged in 2016. these balancesd, will likely persist. keep in mind in the u.s. we are still producing somewhere around 9 billion barrels per day. >> $20 crude. why is $20 so important? vince: when you take a look at cash costs, it seems to be around that level. hi to mid 20's is where you would anticipate the cash costs to be. you take a look, it seems as

though the cost declines have reached the maximum threshold. it is challenging to see how they could improve upon it. >> lighter people get so concerned about oil prices getting so low? isn't it a good stimulus, like india, a high-growth emerging economy, that oil prices are helping some of that growth? vincent: they are hoping the average consumer but also keep had cuts inhave subsidies. also keep in mind that in the u.s., you have had significant job growth in the energy sector that has reversed. high paying job growth in the energy sector has reversed. we are now seeing job losses in this space. it could be a negative effect not only in the energy sector, but also those derivative industries that support the energy sector.

>> thank you for joining us this morning. steve cohen details next. ♪

welcome back. here is your latest. an activist investor pushing macy's to cash in on vast real estate holdings. eventer to macy's saying nice -- selling a small stake would send the stock is higher. goldman sachs says a report out

today, it expects returns for moderate risk well diversified portfolio. -- u.s. stock. and american apparel founder trying to get back into his old company. an investment group has made an offer. investors include hager capital and silver peak capital. american apparel rejected a previous bid in 2014. stephanie: steve cohen has finally put his battle behind him, reaching a settlement to many outside money for two years. let's bring in bloomberg businessweek editor sheila. cannot manage external money for another two years, a slap on the wrist. what is noteworthy to me, hundreds of employees have had

complete senior management turnover and the skies performance continues to crush other peoplewhen are failing. what does it say about mr. cohen? >> there is no way to look at this and see it as anything other than a huge victory for him. talking about banning him forever. bennie him for the rest of his career for managing outside money. in 2013, people thought he would go to jail. that was a possibility. people are worrying and debating that. everything has disintegrated and he has ended with a small penalty, no financial penalties, no admission of guilt, and this short time where he has had to billion, and he continues to do very well. he has always made the argument that he is a great investor. kind of proving it here.

>> i tnk investment is about psychology sometimes heard blocking out all the noise, a real factor in his life, and focusing on what he is good at and why he started the company to begin with, it is akin to the u.s. open tennis match when all the pressure is on. you have to focus on what you're good at and play your game. >> he can come back in. is there any reason to believe he wants to? a lot of people have gone the other way with their hedge funds. questioning is important to him. that has always been a big factor. he wants to win. firm settled criminal charges, he has been putting the steps in place to prepare for a comeback. he has not indicated whether he will actually start a new hedge fund. he brought in outside compliance and has tried to distance himself from these problems. it looks like he may be in a

position to do it if he wants to. was in research covering stocks, i was speaking on the phone, and i was giving him my view and i thought i was making a real impact and he would be buying stocks. i found out afterwards he had been selling during the entire conversation. he said everything you were saying was very well known. he does not get two and 20 or when he took out outside money. he was getting three and 50. when we talk about the model being broken, it is if you don't reform. think about reforming. >> the gulf between the true stars and everyone else has gotten wider and wider and i think he has gone out of his way to prove he is in that upper echelon. even people who, at the height

of his legal problems, believed he was doing something wrong and possibly illegal, they all of knowledge and he was still a great investor and if he was doing something he was not supposed to, he did not need to do that. he could have achieved a record breaking, historic level performance, even if everything had been completely above board. stephanie: given that his reputation has been decimated, the fact that others had done so poorly, will that get pushed aside? factor of, what have you done for me lately. we're talking about his performance and it will be permanent. it will obviously change at -- on a dime. has never had it that year, he is a great investor and has driven he can get through but at the end of the day, it is a choppy market and we will he what happens going our. >> something else he was good at was hiring the best arid there are people who believe he was

hiring overly aggressive traders pushing the envelope. track them for years, he would bring them in and he was very aggressive about incentivizing those people to go out and make money for him. that model is unique to him. millennium does it. a lot of people have imitated his model. but it has proven to work over a 20 year history. >> it sounds to me he will not have trouble funny money when it comes to investing. thank you very much for being with us. , more on to cover media dealmaking and activism ahead. ♪

veryanie: we have a special guest anchor with us. it has been two years to the day

since charter communications made a bid for time warner cable and this is one of the men who put the deal together. we have got to talk about how the landscape has changed their we were talking time warner earlier. activist inouple the stock not in a big way. be atccessful could they getting a selloff? >> it is easy to dismiss activism like we used to in the past. carl icahn made a run at time was notnd it successful. time warner ended up doing a lot of those things down the road but in their own time. these days, it is different. activism has had a real voice and people want a fresh voice at the table and activism has been successful forcing change or the ceo of time warner is a ceo that does want to do the right thing and does not have a controlling shareholder as an impediment as

a lot of media companies do. >> another ceo would want to keep the whole thing together. he has gotten rid of time warner , aol, he has done what has been proven to be true. it is unusual. >> correct. whether they are big enough -- they are small, but they have allowed voice and at the right situation, today, we are in need of some change. there is a lot of underlying frustration at content companies. the question is in what form. they are pushing for a spin off of a piece of it. thatnot want to get into or not but i think the shareholders will have to value the best as a whole or in parts and over what time. i think activists could be successful in forcing some change. david: is the thing that drives

the possibility of change the relative value, it's been on warner bros. on one hand and cable on the other? they are growing apart in valuation? >> yes. there are different assets. it has done more simplified. those are different assets, different growth trajectories and different consumer behavior and models, however, there is still a lot of value in a -- precious asset like time warner together. there is a sense there is a change and m&a will drive the industry. the content industry is behind on consolidation, which i think will catch up. >> what is big enough? >> you usually want to see an act is have over 5% or just around that as a stock to make a

real impact. time warner is a $60 billion company. speakeing said, you can for shareholders even as a smaller stakeholder and get meetings, talk about the different changes that are required. you will see more and more of this. it is the early part of the year. usually coming up sometime around may, typically. >> we will see more of them? >> this is the time when you start to nominate your own or representatives. this is when you start to see more of it. i think time warner, while they have a very strong set of assets, they are not necessarily biased by any sense. you -- i think he cares that during the right thing, hold or in pieces is the real debate.

i think he will give a voice to do the right thing. i look at the ownership here, it is true there is no major owner, but you get to 30% pretty weekly and they are blackrock, jpmorgan. who will the people have a large stake in the future of time warner? >> it is a good point. they are not activists but large shareholders. saying this is what needs to be done. a voice and a stimulant for change at the end of the day. that new voice at the table on the way. you mentioned it before, what was your biggest take away? >> drones, driverless cars, and werewolves. stephanie: how will that inset -- affect this year?

>> coming from the technology companies and not from the auto industry. you used to buy an at&t phone, now a verizon phone, now we are buying and android phone or an iphone. is what is starting to happen in the auto industry. it is a very a change. obviously tesla is starting to lead the charge in google as well. the insurance business will also have to react to it as well. we will stay on autos. thank you so much. when we come back, carlos of nissan. ♪ we live in a pick and choose world.

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in the last few hours, we are bringing him back all week long. and already on london time. he will clearly be napping. john: we are joined by the longest portfolio manager at oppenheimer funds, which has $6 billion under management. great to have you with us here. trucks filled with food rolled into a town in syria today were people were starving. peoplevoy contain 40,000 for a month. the village had gotten no aids in september because of the government ibaka. 28 people have starved to death since the first. door-to-door with water bottles were people can drink from the tap. deputies already passing out water went from old pipes contaminating the system months ago.

and the first in the nfl playoffs, all for visiting teams wondering wild-card weekend. temperaturesb zero , visiting seattle. resume action next weekend. global news 24 hours a day powered. stephanie: a bounce back in futures this morning from last week passes declines. they have been accelerating the bounceback we have been seeing with the e-cig the and futures value,according to fair .ndicating a gain futures extending the gains as we see oil bounce off the lows of the session. if you take a look at the chart, it comes back down. overall, oil has been extending its declines and trading near its lowest since 2004. the 10 year was on a hot streak

but that has ended today. it was up and we are seeing selling for treasuries as money is going back from the stocks in the yield is going back up. ..16% one of the stocks to watch this morning is apple. apple has been on a streak, a losing one. it did outback a little bit on friday, today down 1.7%. a lot of analyst commentary on iphone sales, what will demand you like. bernstein says the shares should be bought at levels -- the -- analystsssure, some are cutting price targets. you are looking at a map for the analyst ratings for the company going back two years. up,n by ratings are going even though sentiment teams to have turned out. the price target is the yellow line, that has been going down. the spread between the average price target for the stock in

where it is trading now has been growing. in other words, analysts have been cutting prices to some extent but still way above where the stock is now. are the three stories that matter to markets right here and right now. the second day of stabilization for the chinese, pretty much unchanged. the shanghai composite is down more than 5% again. trillion flood the chinese market busier year so far. positive territory so far this morning as our futures markets as well. you were surprised last week. people in the u.s. are using that as a trading queue for the u.s. session as well? last two and want to look at is actually chinese stocks, whether they are up and down. they are so disengaged from the economy, you cannot bet --

what was surprising was the way the chinese have let the currency go at a time where otherwise, economic data would not have suggested any pressure in at a time when we know there is a lot of seasonal weakness for the chinese in the first quarter. they probably wanted to lean into the weakness to get more move and they are probably shocked the reaction of the stock market. stephanie: also the outflows we have seen from china, even as we have seen the currency move as well. the white lines are estimated outflows. unlike united dates, we do not concrete numbers. this chart goes all the way back to about 2009. downe this straight line and we spoke earlier today and he said the dirty little secret people are not talking about is wealthy chinese are pulling their money out of the chinese

market. that has been exacerbating the declines we are seeing there. >> when the line goes down, that means more money going out of china. increased outflow. stephanie: slow growth in china is sending oil prices lower. it continues its slide today and the rapid appreciation of the u.s. dollar oil to $20 per barrel according to morgan stanley. to bring itsplans world leading exports to the market with an ipo. some people say it is the worst time ever to do that. the company is considering than thehares rather parent company. what do you make of this? much knowledgee discussion, but the reaction of the night, the

only asset not down to his oil. energy and commodities in general. you are seeing reaction in china. you're seeing stocks rebounding. the yen underperforming, it all makes sense. commodity, nothing. it shows there is not much speculation. that is what surprised me the most. david: isn't oil special in that people just keep pumping? it is a rational market reaction. implicationsg-term , they are perfectly priced in. what you typically see is overnight slows, some squeeze in the energy market, which are obvious, but it is not happening. that is where ice the the biggest disconnect, in the short-term reactions and

long-term speaking the fundamental view. it makes a lot of sense. david: the number three story, adding cash to the takeover bid, $30 billion. the acquisition boosts the position in the market. the combined company would generate more than $20 billion in sales by 2020. sales are up more than 2% in more than 5% in the premarket trading. it looks like the market likes the deal. >> we finally have a deal in farm we can talk about based on the fundamentals. well-placed, there is a tax aspect to this as well. we can discuss in terms of industrial fundamentals and not just taxes. is the type of deal that politicians who have gone after the industry so hard, this is a positive.

it is the kind of company going after rare diseases at a time when the nih has no funding. we are reminded be struck companies do good, that there are companies away from mike pearson that stand been an enormous amount of time and money in r&d. david: this company does real research. the question is, are there other opportunities in pharmaceuticals like this where there are real niche is that can be going -- gone after? john: you see a lot of patents expire. the only way to go and do it is to buy another company on the stock exchange instead of spending even more money at r&d. that is what a lot of companies have been forced to do. stephanie: less criticism around expensive drugs. people actually developed and invented them. stephanie: and they do good

things. david: good point. those are the stories that matter to markets now. we are minutes away from nissan carlos on theceo company's 2016 auto outlook. that is coming up next. ♪

vonnie: welcome back. millionportedly has 10 's six month after its debut. sources quoted by the financial --es say membership sirs surged after apple launched an android version. to help people get

around even if they are not driving force. the company is helping users with arcing and other services. ford pass will be available to anyone and not just ford buyers. a slow trying to make up month with price cuts. that is the latest. mark is now with julie. on some want to check of the individual movers. potential deal moves this morning. making it official with a $32 billion deal. a $30 billion offer previously. shire up to the cash portion specifically. another done deal is thermo fisher. still not open for trading. $14 per share.

it is a $1.3 billion deal. this is more in the medical testing realm versus the baxalta deal we were talking about this morning. the owner of private universities, the companies putting itself up for sale. it is currently in discussions that could lead to a change in control. ownership. for new explore thes to option. shares are down 75% and it also announced numbers this morning according tohl's, the wall street journal, the company is to consider taking itself private according to the journal and is in preliminary discussions on that front. the shares are down 21% over the past 12 months. david: back to matt miller once again in detroit at the

international auto show. he is now joined with the nissan ceo, carlos. thank you very much. i appreciate your time this morning. incredibly busy auto show and you are getting ready to unveil this infinity. do you mind? we will take a little look. here is what we will see. be a bigrs seem to focus of this auto show and infinity has obviously been heading in that direction for a long time. some good news. this car design is sunny because we had the concept car presented. good reviews and this car is a copycat. great.ign will be on top of this, obviously the have ishnology we

embedded into this car. matt: this technology has been a winner for nissan. carmakers the only that the estimates for sales growth. do you expect the record year to repeat itself this year? carlos: we should have a year of growth and 2016. we are talking about nissan. global u.s. markets will go up next year. we are forecasting 1% growth. with 17r ended up points, 5 million cars. next year, we are forecasted 17.7. within this growth, we should begin a market shares. by the end of the year, 2017, we should be progressing. last year, 8% market share. 2006 in should be another progress.

i do not think we will beat our target. i think we should be able to meet them because we have a lot of new products coming and technology. matt: you have been doing well with the roque, the midsize suv crossover segment has in incredibly successful. you cannot make enough to satisfy customer demand. what will you do? carlos: we will support our sales by producing to support production in the united states. our production capacity in north america. of potential for the rogue. we would probably sell more if we had additional capacity. we will put that in place in 2016. hopefully we will see growth continue. i think the compact crossover

will continue to grow. the fed is now increasing rates here in the u.s. everywhere else still in easing. to weakenect the yen more? it gives you a real headwind. a real tailwind. carlos: we are not counting on this. we are moving the production locally today. more than 85% of the cars sold in north america, this percentage was 70% a few years of 2008 the crisis started and we will continue in this direction. tomorrow, it can be stronger. we do not want to bet our strategy. as much as possible, localized production so you can become immune. matt: are you concerned about

the fed interest rates? they want to do it three or four times this year. holding inventory is more expensive and the customer has a more difficult time financing the car. are doing it by announcing in advance what happened, being extremely patient. no one knows how may times they will be this year because we're looking at whether -- what other countries are doing. a lot of wisdom from my side of the equation. i do not worry about the fact the fed will be making moves that at the end of the day will be negative for the u.s. market. matt: let me ask you about your truck, it started on sale at the end of december.

does the diesel fumble slag and hurt you or help you? i do not think it helps or hurts us. you have to give more explanation about the diesel engine you sell. we do not sell any on cars. we just sell one on our larger pickup truck. transparency on technology we use lee -- usually show to our customer. att: i would like to see talking go the only car with a rear engine other than -- carlos: we need a guy like you in order to bring it to the u.s. are another there one million of me here. back to you in mr. rio -- in the studio. stephanie: of course you do. thank you for joining us from the international auto show. when we come back, crude touching a 13 year low today.

coming oil go? we will have that next right here. 11 minutes from the market open. stay tuned. ♪

john: stocks in futures trading high this morning, futures across the board. expecting the same thing today in the u.s. s&p 500. dow futures up by 86 points. keeping stablena for a second straight day. equityfted and developed markets. one thing not lifting this morning is crude.

morning,ng lower this a 32 handle. crossover to andrew who princeton.w from great to have you this morning. it is interesting. developed market equities remaining stable again. we do not get the squeeze in the commodity market. why? >> i think the commodity market has its own things impacting it like supply and demand factors. everybody is waiting for u.s. production to roll. it has n that much. the peak you saw in may 2015. really, that is the main linchpin on the supply side. investments in canada or offshore in brazil, not expected to roll this year. butly coming off in africa

you do have increased production coming from the middle east countries. also underside is appreciated as well. stephanie: how? andrew: from a weakness standpoint. we drew demand in 2015, that in 2016.wn to 1.2 if you think about how much we grew demand through the 2014 time, it only grew $900,000 per day. another 300,000 barrel per day difference you could see as you look further out. classic seems like a herd mentality in markets. i see it in oil. morgan stanley, bank of america, all going down and all taking estimates down at different levels. are we just settling in for a long and low time?

andrew: anything can change. expectations can change on a dime. a lot of analysts are looking at it.r periods and comparing if you just look at the supply and demand dynamics, it looks like we will stay oversupplied through 2016 barring significant cuts in the interim. it is really about u.s. production rolling. it does not look like it will roll over as much of people think. the window starts to close as you move further beyond the first quarter, second quarter of 2016. maybe closes more nec some tightness develop. stephanie: i just wanted to quickly bring it up on the bloomberg terminal. sentiment,k under you get a sentiment map where the forecasts are overtime. here we are in 2016, green is

positive. neutral.le is you can see the sentiment has been increasing. >> the scary part is i would have expected more natural trading squeezes here and there when it is trading the slope. it except early last year. supply and demand, it is really supply. the problem with demand in the long-term is we have reduced projections of long-term. stephanie: we will leave it there. andrew digging into oil, ticking down. we will be back. ♪

the futures of 93 points. nasdaq futures up 29 points. compassuch the shanghai it, which was down hard again overnight by 5%. there is your market opening, expected to trade higher when we allow a bit of time for price formation. oppenheimerin funds. we talked about the shanghai compass it. trade day been a after day after day. i think it is really china. china is this block preventing any other investment team to its own identity. i think the market realizes impossible trinity is

resolved, we cannot move on to the next market stage. this is a battle between politics and economics. they -- that will was very brutal. a 10% to 15%. is an artvolutions more than science. i think the market would be able to get the news out, certainly the student desk certainly out of the system. and what the potential economic stimulus, especially to global trade, could be in the asian region.

we will continue to take clues for currency. >> just to follow quickly. a 15% move. when things move that much, things break. look what happens when the s&p makes a move like that. things can break. >> i am also concerned about the populace. how is the populace going to react. what does it say about the confidence in people? >> summative retail investors in the chinese stock market. >> absolutely. i believe most of their confidence is undermined now when you tell them they want to devalue and devalue slowly, therefore they will have an incentive to front run this. that here that caused

the circuit breakers. suddenly the panic that this is -- own 5%, that >> the circuit breakers are gone. if you do a one time -- and it is credible, you say this is it to you than the market will not have an incentive to push your pet. what we learned from the bank of markets can for 92, do the math pretty quickly. this policy is sustainable for a very long term.

eventually they break when you least expect it. >> my final issue is we break -- is we wake up to that terminal. what do you buy that morning? >> commodity sensitive sooner than equities. emerging asian currencies, maybe it is time to get back into the trade. presumably we need a huge leg lower. but typically these events warrant a serious .econsideration >> one thing we don't talk about is the fundamentals of the shanghai companies.

they are still very highly valued stocks. they are going to try to navigate through those crazy valuations. >> you can't just focus on fundamental and values, financial markets are not linear systems. you cannot say this country's work -- this country is worth of this, therefore it should be a direct correlation. there are outside factors. when will we understand there all these factors. space,ally in our macro

we actually put all of our attention on those external forces. we allocate to our usual managers and allow them to do their best job in terms of we do thatlection overlay. until this chinese paradox is resolved. in theto capture value asian space, in the currency is still -- your factor needs to come down a bit more. that sounds like china. how can you throw more debt at this problem. you have excess capacity. >> companies take write-downs

when the market demand sit. chinan that happen in when you have a government who controls the information and controls the market and don't want the financial truth out. >> the street loves a write-down. maybe the markets would react positively. >> for the chinese government is so concerned with how they appear, how they are faced external glee -- externally. >> a lot of research from the south side says china puts off a day of recognition because it has to, because it is a socialist system. can they really keep on doing that? >> that's what the bears are saying, they can't anymore. >> i am close to stephanie's view. it is not this month, not this

quarter, but i am thinking it is this stage of the cycle. i think we should see correction in the dollar. i think we are due for a dollar weaker correction. as the euro and the yen appreciate, it might give them to do thatath devaluation. >> in the meantime we need to check into the markets. a lot of green. .> we have a bounce back here very beginning of trading. week'sck here from last decline. take a look at what is leading

us there. consumer discretionary doing the best. consumer staples is also up. a pretty broad rally. at those oillook prices, which are continuing to we have seen in a dozen years. of negative commentary coming out on oil this morning. lowering it to 40-50. today we are at ready to 58. we think there is going to be in a bounce in oil prices. price of oil versus the u.s. dollar, the dollar index. for brent to go to $20 was and if-then scenario. up, thatis a big snap

is when you could see brent go down $20. this is a correlation between the dollar and oil. trainingly have been -- been trading in tandem. this is the inverse correlation we saw last year before the two switched over. that has now been snapped as we are seeing money go back into stocks. finally, speaking of streaks, a .heck on general motors general motors had been down for 10 sessions straight. it lost 15% in that period of time. suitesseeing credit raising the neutral. saint cycle concerns are overblown and specifically with regard to gm, the shares coming back. up 1.5%.

let's check in with abigail doolittle. week i'll take had reentered a bear market. we have gina therapeutic bouncing all around. -- we have geo-therapeutic bouncing all around. the company announced it is acquiring -- this is a relatively small deal for relatively two reasons. it will help a broader cancer treatment market. some acquire its technology. gino has traded a very volatile range. it is interesting to see whether or not those news can help stock range go higher. >> abigail doolittle joining us from the nasdaq.

how hot will health care care m&a be in 2016? stick around, go has more to cover.

>> welcome back, here is your latest bloomberg business flash. super titanium and alumina and components will be provided for general electric jet engines. fourth-quarter results after the saysyou morgan stanley

brent crude could fall below $20 per barrel. the bank says oil could fall up to 25% if the dollar rises. rent is trading around $33 per barrel. be at theobama will auto show in detroit next week. carmakers are facing a collapse. .ast year set records the president says he would do it again. that is our latest bloomberg business flash. >> as we look at markets, i am positive we are having a green morning, but we are already seeing the dow dropped 60. we are giving back some already. green, as we are in the even if we back off a little bit, we are heading in the right direction. m&a in the health care space, inecially in the 2015 -- 2015, it doesn't look like it is slowing down anytime soon.

creating an industry leader on rare diseases. here with us is stale stafford. joining us bright and early in .an francisco no better time to announce this deal. when you think about the deal announced today and everything that happened in 2015. you are there above the biggest companies. what is left this year? believe 2016 will be another healthy year. we tend to think there are generally three things that drive m&a. uncertainty among leaders about where organic growth is going to come from. the second is available capital on cash and the balance sheet. we continue to have all three of those things in 2016. .015 was a banner year

who busted and say the exact same thing in 2014? >> the health care conference, we have seen some consolidation. motivation has a driven around industry and not tax incentives alone. the consolidation come from and where does it drive it? are a few things we see is really common themes, repeatable deals that we are seeing again and again. we have done a lot of work over the last few years to define how pharma companies can outperform their peers. supery is by being focused on a few clinical categories. example oflassic doubling down in the rare disease's space. that combined with the potential to reduce tax obligations, those

are themes we are going to see again and again. >> i'm going to call it a reversal. 10 months ago when bill ackman was on the scene, we loved that business model. we seem to love this deep rare disease trade. help us understand this change. >> i think it is about expertise. when we think about being a leader in a category, that implies you have privileged to all of the key constituents in a particular therapeutic category. it means regulatory affairs and medical affairs are more efficient. even as small companies innovate, they look to you to be the partner. what this is about really is

being the number one or number two leader in a clinical category. >> if focus is the premium now, the focus on spectacular categories, are there companies is that atheir focus? possibility in the pharmaceuticals area? >> we have already seen that. those guys affectively swapped assets. one was doubling down on oncology. they both did carve outs of those assets and sold them to the other. theme, an investment deal thesis. the owner isn't necessarily the number two leader.

it is really going to be a common deal theme. r&d discussion, how much is this about pattern expire? >> i think that is an important key driver. when we think about what the underlying drivers of uncertainty -- one of the critical sort of inputs to healthy m&a markets is leaders are uncertain about where the organic growth comes from. one of the key focuses of uncertainty has been this long-term trend where the roi on our od is declining. somebody has done the hard work and acquiring it. >> not particularly with pharmaceutical companies and health insurance.

m i think it is too simplistic to say that the affordable care m&ahas been the driver of in the health care environment. that have been driving m&a are long-term ones. the declining roi of our od. puts earnings on these organizations. been going onave 41520 years. the themes are the ones we have known about for a decade. >> that is stale stafford. ahead of m&a's america's practice. we will take a look at highlights from today's broadcast.

>> is not quite as green as it started out. dow jones is up about 20. it is pretty moderated. we want to get some final thoughts on you -- final thoughts from you. what did we miss? row we missedin a the gains of the open. >> not good science. >> you would expect after a payroll report like the one we -- you areinese getting no reaction at all. ,art of the shanghai composite

opening strong and closing 1%. >> it generates a headline but we barely talk about it. sinceonly the worst week december. move.weeks how you managed that with money has your back drop? >> we are already seeing retail accounts. >> japanese retail accounts, 10% move. >> they tend to do these things. in august.ing

it is bearish for a while and will continue to do so. those moves in the emerging markets are to be expected. energy is where the liquidity is there and this ongoing selloff obviously it has big repercussions on credit. that is already interconnected. continues to selloff all of its classes. it for us on bloomberg . it tomorrow we are going to see you back to the auto show.

>> it is 10 a.m. in new york, and 11 p.m. in hong kong. welcome to bloomberg markets.

from world headquarters in new york, i am betty liu. here's what we are watching at this hour. stocks are opening higher but are drifting off after the worse week in and the -- in the index. take m&a news -- big m&a news. the work for some time. we will tell you what is driving that deal, including some big tax savings. howill have the latest on el chapo's secret interview with sean penn may have led to his arrest. markets, we are half an hour into the trading session. the nasdaq just turned red. i want to