joe u.s. alix: u.s. stocks closing higher today but oil is trading at a 13-year low. joe: the question is, "what'd you miss?" scarlet: there was one trade that worked well for investors last year. when earnings season has to do with it and why understanding that trade matters today. joe: the myths about buybacks. we look at the charts that outline why more buybacks may on the way. why early stage investors are pouring money in like never before. but we begin, of course, with the market. stocks erasing their decline. p.m., the dow:15 had fallen as much as 114 points before recovery. liking behind when you compare to the major indexes.

be impressed to because it looked like it was going to be another one of these days that started good. futures overnight were good but then i got grim throughout the day and then this weird comeback. one area where people are not excited is if you are long any kind of commodity. freeport-mcmoran caught my eye. worse today in 15 years. fell the most it ever has before. it is the biggest publicly traded copper producer but it also produces oil. let's look at the underlying commodities. copper is up to six-year low. barclays pointed out in a note a few moments ago that copper is nearing a point where it was during the financial crisis. that would have been his first level in 40 years. they are saying it is not necessarily justifying the pricing, so much bad news. very similar story when it comes to oil. barrel, off.88 a the low on the day.

oh, wait, opec does not matter as much anymore. u.s. shale is not rolling over. keeps on -- joe: when you look at that oil chart getting absolutely destroyed, i would say it makes equity performance today -- scarlet: all the more impressive. joe: that oil could get demolished and we close green. scarlet: energy material stocks, as might expect, leading on the downside, down 2.1%. materials can be soft 1.6%. if you look at the high-low function, which tracks the committees taking 52-week highs and lows, companies with market value of at least half $1 billion, 10 companies making 52-week highs and 600 week companies making 52-week lows. alix: whoa. that is a thin breadth of any kind of leadership -- joe: chinese stocks got slammed again last night, down over 5% on the major indices. honestly, today that did not have as much spillover.

that market is still ugly and not getting anywhere. alix: now i want to take a look at the three charts week that were most important in the market day. come inside my bloomberg terminal for a deep dive into the s&p 500 futures. i highlighted them because you can see what happened overnight and track the future through the trading day. right around here was when chinese stocks opened and we actually saw stocks rally on the back of that. maybe flirting into positive territory. around here is when we had european stocks open and we did trend positive. we got taken down a little bit during the day. you can possibly blame that on the oil price could bottomed here at around 2:00 p.m. and we saw the huge spike up and we managed to finish off that spike basically right around the children it shows the resilience -- right around neutral editors the resilience of the stock. of crazy, volatile

action, i rarely see anything like what happened last night when trading opened in the south african rand. right at the opening of trading yesterday evening, you got nearly at 10% plunge in the currency. dollar-rand. obviously, it came back of it. this weird situation where there were a lot of jitters. there was apparently a lack of liquidity due to know japanese traders being in the market. movet was an extraordinary . came back a bit, but major losses in the rand, the emerging market currency that has been getting slammed. seemed like a good presage -- like it could presage a bad day for risk. looks like a beat for earnings been out for revenues, scar. scarlet: coming in higher than the consensus estimate. on the revenue side, a bit weaker.

analysts were looking for 5.3 going dollars. making some comments on the subversion of the business, it seems the suppression completed in the second half of 2016, and it talks about global aluminum demand. for 2016, demand increasing 6% from 2015. in terms of global aluminum deficits from it sees deficits for the year 2016. we will continue to keep an eye on the stock. alix: the deficit is actually present, considering the oversupply of all these metals in particular. dic is the one everyone ngs. it is up on the news. scarlet: there you go. for my deep dive i want to look at the overall u.s. equity market. we talk about how resilient it is. for all the skeptics who say that easy for policies the driver of the stock, here is the evidence that the underlying earnings support evaluation.

the adjusted earnings per share and the yellow line is the s&p 500 price. sox, you can see, plateaued right around this point, middle of last year, and then it kind of got wobbly last year as well. earningsrgue that the kept stocks from caving after yuan devaluation in august. we have not seen these grow faster or hires is the second quarter 2014. the market is just doing what you would expect it to do. scarlet: you can see all these charts and more on twitter. is the chiefhadha global strategist at deutsche bank and joins us now. earnings season is kicking into gear. jpmorgan and intel on thursday, wells fargo on friday. scarlet: with crude oil crushing today, what is the knock on effect on earnings? i want to get your thoughts,

first of all, on the rout in oil prices. brent crude and the bgi, what is that single to you about the market? binky: i think for the first time for the second time in a year and a half, oil prices actually look a little cheap to fair value. you could say, how can you say that? it is important to keep in mind that the u.s. dollar is very, very, very important ever of oil prices, and most of the trip from 110 down to 38, 40, is oil -- the dollaring is going up in the oil is chasing fair value down. scarlet: knee-jerk reaction. binky: you know, the dollar does drive the purchasing power of the rest of the world, commodities priced in dollars. joe: what does that mean, fair value of oil? binky: as a practical matter, i would say it is mostly the u.s.

dollar because global growth doesn't go up and down by 5% or 10%, rest the u.s. dollar is up 40% from the bottom. the fact that oil is actually cheap, in terms of short position, they are about as short as they have ever been. i think there is considerable potential, basically, for reasonable bounce. alix: barclays was saying that we appear to be primed for a huge crisis, the worst in 40 years, the position is so one way. the oil's light does have significant applications for inflation expectations. is that perfect correlation? when the fed winds of looking at this kind of chart, what do they think? binky: it is important to think about breakeven inflation rates, a whole set across the term

structure in the portfolio. term, for example, the two-year breakeven in inflation, it will be impacted directly by what is happening to inflation. the fed has gone away from talking about expected inflation from breakeven inflation rates to calling them inflation compensation rates. it is just a pretty mechanical impact in terms of the headline impact. it should basically washed out over time. i would argue the breakeven inflation rates are impacted by lots of other things, including risk appetite, volatility, all the rest of it. scarlet: wasn't goldman sachs not so long ago, joe, pointing out that the transitory effects of oil falling will not be transitory much longer? joe: that is exactly right, because everybody's been talking about 2016 as oil is going to stabilize and rolloff but if it continues, we won't get pickup in inflation from the base effects.

binky: i think we will. as you look at core inflation and break it up into services and goods, the impact is basically encore goods. -- on core goods. most of that has already happened and the action is about core services, which have been moving up pretty steadily here. is going tonk that react. scarlet: one thing we have noticed -- our reporter on the stoxx team has written about this -- if you are going to long stocks during the earnings season, that paid off in 2015, even of it was not a great year for equities overall. if you just went in entering earnings season, you get the left. do we repeat the pattern for this earnings season? binky: i think so and it is not because of earnings but because of the buyback bid that goes prior toackout period reporting and basically comes back. if you think about last year, we have 12, 12 .5 months of

outflows from equities that are basically being financed by the buybacks. if you have the buybacks, the only net bid overtime for u.s. equities over the last 12 months. is int buyback bid technical blackout periods, you will have the air pockets we have the last week or so. scarlet: i like the way you put that, air pockets. binky chadha, you are staying with us to we debunk the top three minutes of buybacks when we come back. and shares of lululemon gaining after the company boosted its forecast. ♪

alix: i am alix steel. let's get to mark crumpton. mark: suicide bombers and gunmen killed and took hostages and an attack on them all in baghdad. the islamic state took responsibility. the attackers detonated a car bomb outside and suicide vests inside the building in the predominantly shiite neighborhood. 20 others were wounded before security forces and the rain. the u.s. house of representatives is poised to pass legislation that would punish north korea for its latest nuclear test by expanding sanctions. lawmakers are scheduled to vote tonight on a bill that proposes to deny the north the hard currency it says it needs for its weapons programs. pyongyang claims it conducted a

fourth nuclear test but he was greeted with worldwide doubt that it actually happened. u.s.di prisoner at the base at guantanamo bay in cuba has been sent back to his homeland 14 years after first arriving at the base. the,, who was among a wave of recent releases, was an alleged out kid a recruiter and fighter, but the u.s. has concluded that measures in place in saudi arabia make it unlikely he will again take part in next he missed activities. -- in next he missed activities. pope francis is calling for bold strategies to contain the migration crisis. he has the moral this possibility to welcome refugees without sacrificing security or culture. in a speech to the holy see and diplomatic corps, he deplored the distinction made between refugees fleeing persecution and migrants fleeing poverty. francis says both are deserving of international protection. global news 24 hours a day. alix, scarlet, joe, back to you.

alix: thank you so much, mark. "what'd you miss?" the market could see $450 billion in net buybacks this year. season,ebt markets committees will be unable to raise cash to fund the buybacks. deutsche bank debunked this myth. binky chadha, chief global strategist at deutsche bank, is back with us. one argument we have is that we have hit peak buybacks. why is that an unfair comparison? that is the nominal dollar amount and no one can disagree that 400 60 million in by last year is about the peak we had in 2007, the last physical bpeak. it is important to keep in mind that the buybacks were done out of earnings. higher, of 25-30% normalized earnings are 40-50% higher. if you think about buybacks as

the typical payout, the payout ratio is well below where we were at the last peak. if you use the payout ratio for earnings in 2007, instead of the buybacks today, if we were at the peak we would $600 billion in buybacks. scarlet: the other question is leverage because you have found that the operating cash flow generated by earnings fully covers not just buybacks but dividends and as well. companies that are taking on debt, that is happening because they can, not because they need to. binky: exactly. the s&p 500 as a whole, operating cash flow for the covers the three claims on cash flows. buybacks., and it is a myth that the corporate sector as a whole is borrowing to do the buybacks. the buybacks is another payout, let's think about it as a special dividend if you want.

it is true, as you mentioned, that many companies are basically borrowing to pay out in excess of their free cash flow, but if you think about the share of companies that is doing that, that varies and it basically rivals over the course of the cycle so back in 2008, 2009, we were talking about 10, 12% of companies doing that. today we are talking about 50% of companies doing that. theared to the last cycle, people's 60% and the previous two cycles it was 70%. we think of this as a normal, cyclical phenomena -- joe: another thing, and this tends to be something that is politically charged, that buyback's are coming at the expense of real investment and countries are buying back shares instead of investing in the company business. how come? binky: it is absolutely a myth because if i look at buybacks,

and we have been talking about them approaching or near that peak. or near the comeurse buybacks, capex and dividends have been growing very rapidly from the bottom. think about what is coming out what -- crowding out what. a simple way to think about it is buybacks are cyclical so they get cut by more in the recession or financial crisis and therefore comeback by more. buybacks are close to their peak, while capex is 20, 20 5% higher than the last peak. if you look at dividends, 70% higher than the last peak. buybacks are catching up. you could make the argument buybacks, relative to the others -- alix: you take a look at some companies that have specifically issued debt to fund buybacks, like apple and the biogenic, you can see that the stock sold off

after the announcement. you see what happens to the start -- in particular, biogenic, that blue line. investors don't want the association. binky: two or three points we make. it is important to remember we are talking about the equity market and the equity markets tended to price things in quickly. by back announcements on average are associated with outperformance and that is a very quick outperformance. and then there is a separation where overtime there is a whole set of firms that will basically get a associated with the buybacks. you mentioned some companies .hat are high-growth companies not necessarily associated with outperformance of the buybacks. alix: great stuff. such a pleasure to have you here. binky: my pleasure. scarlet: coming up, will catalog

attempt to split from spain? ♪

alix: i am alix steel. "what'd you miss?" spain sites to remain unified. are fighting to split from the country. toning us is erik nielsen give more perspective on the bond selloff and the concerns in catalonia. what do you see happening here? how does this wind up playing

out? erik: there is different a lot of noise going on. there is a probability -- there's a low probability they will split at the end of the day. it is basically on par with if texas wanted to leave the united states. a little different, but not obvious -- not like scotland. not something you can easily imagine coming along. joe: so then what about the bigger picture, spain trying to form a government? erik: they will get around to do it but it is messy, right? typical follow in europe because of the parliament to democra we have -- parliamentary democracy we have in most countries. in britain, it doesn't because of the way the democratic system is set up. you have these potential coalitions. but they have been a good job the last few years so even if they didn't do many things the next six to 12 months it is not the end of the world.

scarlet: do you think this thing can keep up the trend of late of showing better-than-expected economic data? erik: i think the answer is yes. are basically runs about 18 months behind the united states because we have 2 crises, you have one. there have been a lot of reforms in places like spain. even places like italy, generating good job growth now. europe is picking up nicely. joe: what do you think, going into this you -- one of the big themes everyone was talking about was the divergence trade, the fed was when he keep hiking, europe is a long way from it. he started the year there have been a lot of jitters, people not so sure how durable the recovery is. it seems like the data in europe is not that bad. do you think the divergence trade or theme is still intact? erik: no. we never really bought into it,

but partly. we came into this year with the highest number for the eurozone. we always sort of thought that europe came along quite nicely. we on balance were maybe a little disappointed by the united states. you had it job creation. -- great job creation could a little more rosy picture here. doesn't look too problematic to me. joe: you like what you see out of europe? erik: oh, yeah, apart from the politics. alix: taking a look at the bloomberg terminal, for the united kingdom, probability of the rate hike. at one point we made the case that they had a better chance than the fed of hiking and now we don't -- what is that, october -- for we are seeing the probability of a cut. erik: so what happened in britain was the recovery was head of the united states and you are right in thinking that

the bank of england was going to go ahead of the fed. what we underestimated was -- he would not be the first one to go. once the fed went and we had this same that people bought into -- this theme that people got into, i'm convinced that the bank of england shifted to targeting. if you have the separation where people -- he would not want sterling to follow the strong side of that. he wanted the weaker currency and now he is getting it. scarlet: very quickly, it is not brexit-related. --k: it is probably brexit the uk's the biggest credit account deficit in history. , you areerik nielsen sticking with us, because you say to concerns over china are overdone. we will let you explain why that is when we come back. ♪

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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20.

it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. scarlet: i'm scarlet fu. "what'd you miss?" let's get to mark crumpton with first word news. mark: a new set of polls shows a tight race for the democratic presidential candidates and their first two challenges. in iowa, bernie sanders has narrowed hillary clinton's lead, according to the nbc/wall street journal poll. the iowa caucuses are three weeks away. the same poll shows mrs. clinton cutting into his advantage in new hampshire. she is now just four points behind. mrs. clinton is once again defending the way she handles e-mails. appearing on cbs's "face the claims aunday, she

newly released e-mail did not show she had mishandled classified information. thefbi is investigating information mrs. clinton sent from a private e-mail server. the u.s. supreme court heard arguments over whether government workers should be forced to pay fees to public-sector unions. they claim that so-called fair share fees violate their right to free speech. the fees are needed to help cover the cost of collective bargaining. the conservatives appeared skeptical about the mandatory fees during this morning's arguments. the standoff at an oregon wildlife refuge is now in week two. the protesters say they won't leave until there is a plan to transfer control of federal land to locals. the mother of the leader is calling on supporters to send supplies. day,l news, 24 hours a powered by our 24 hundred journalists and 150 news bureaus

around the world. i'm mark crumpton. let's get a quick recap on how u.s. markets closed on this monday. withally started to climb, a straight line in the late rally before we consolidated, with the dow falling as much as 114 points before ending up 52. consumer and telecom stocks rose the most, energy material tunneling. -- tumbling. joe: when they did a pretty extraordinary was that as you see, equities were able to eke out despite getting demolished, especially oil. we have seen so often when the commodities fall apart, and today they managed diverse. -- they managed to divert. alix: if you take a look at glencore, you can see a huge spike. but goes back to friday,

you did see an increase in basis points, the idea being that they have to sacrifice their investment grade credit rating. i will point is that come under risk? it has much larger implications for the market as a whole. there is definitely a lot of pressure on commodity related companies. e earnings toph analyst estimates was a consensus, revenue later than expected. the stock ise, gaining in after-hours trading. alix: i want to take a deep dive into my bloomberg terminal, take a look at what is happening in the world with financial conditions. we are looking at the bloomberg financial conditions index. the white line is asia. if you strip out japan, the orange line is the u.s. the green line is over in the eurozone. i want to look at where we are now in relation to where we were in august when we had that big selloff.

you can see that the credit conditions have not deteriorated as much. the eurozone has deteriorated more than we thought. but for the u.s., we are holding a relatively well, just down by about 30 basis points. you see that huge downward drop in august. however anything lower than .5 is very negative for the u.s., so that is definitely a number to watch. one thing that i am looking at that is puzzling to investors is how influential chinese stocks are to the u.s. market. i want to put it into perspective. this is china's market cap as a percentage of the u.s. market cap. it is a custom index. 2015, itak in june, %, beened for 250$

quickly dropped to 21%. china clearlybout loom large. if you take a look at what has been happening in the market overall, the shanghai composite but forown 5% today, you today it is off by 15%, 16%. eric nielsen is a global chief economist at unicredit. eric, you say china concerns are overdone because the stock market is relative to its own economy. than 15% ofless household financial investment and provides less than 3% of credit creation. so what does the stock in turmoil look like, is not weakness in the real economy? >> panic and speculation. i think we are still up 40% from tw 314. -- from 2014. something like 90% of the trades

in china are household retail. i think what you have is an emerging market economy that is developing. and sort of pile into this, there have been plenty of cases revealing that certain comments have been paid for by companies. it's not quite as clean as it is in america. joe: is china making a mistake with this slow drip devaluation of the yuan everyday lower, signaling everyone to get their money out? could they just do a one left evaluation, shock people, but get it out of the way? >> it's a good question. the old-fashioned way of thinking about this is that you get rid of it. in europe we had the exchange rate that moved up and down. is a number of

chinese households, maybe the important ones, may have loans in foreign exchange. there may be an incentive not to cut it too much. the competitive devaluations today, this is the only may say economy in the world where there seems to be not appreciating too fast. alix: how much fx reserves do you think china can stomach before they pull the plug? >> certainly they have tons of money. i would have thought 500 billion more. but even that 100 billion dropped in december, that created a lot of headlines. people know from history that once it starts to drop, they sort of soulful so. -fulfill.o this is a textbook and have not to deal with it. alix: to joe's point about the

drip feeding of devaluing slowly versus one big move, what is the endgame here, the reason why they are not doing these one big movements? it's not clear that it's overvalued, per se. the game is to stimulate growth to get to 7%, by however you do it. then you can do some on the exchange rates, but at the same time, governors in the region in being allowed to build more roads, improving legitimacy to create jobs. it's much less clear how that works of the exchange rate. it's not the preferred instrument. joe: speaking of financial tension, last night we saw a big surge in yuan, hong kong interbank operate. is this a function of how much

offshore yuan we had to pull out of the market? >> i think it is. not a next, but i think that is what it is. this is -- it's not normal to have to exchange rates. this is the core problem. they can control it, and they don't quite know where the bottom is. scarlet: there is so much data out there about china, but the official data that is always being touted -- i know you guys have done some proprietary work on it -- you also point to other country's data. german exports don't lie, right? >> that's right. numbersar that the gdp are not necessarily spot on. there is a political objective,

but when you crosscheck on all the important data -- you guys have done this -- the numbers are not significantly off. then you do a double check on export numbers, and that is ok. so i don't think the story of a slow down israel. alix: are you a china bowl or a china disbeliever of negativity? >> [laughter] out, ilook five years would bet my money that china has grown more than 3%. a very fundamental issue on demographics that means that they will slow down, and they don't appreciate that fact. then they are fighting it. the problem that makes the most nervous is that as we fight it, many of the instruments they use, particularly the lending numbers, actually increase the bubble. that increases the probability

that the slowdown will be abrupt. alix: the debt bubble? that it will totally hit the debt market? >> it always does. when we see a bubble in the forecast we always have to have a smooth path. the fact is that they usually come quite abruptly. but maybe china can control many levels of the economy. they have a fighting chance. scarlet: one thing you referenced was provincial governors, and how they want to keep growing jobs. labor protests have been rising steadily over the years. to what extent is that driving a lot of the economic policy like fx targeting, like the yen devaluation we are seeing? >> that's exactly right. it is part of what we economists call the loose turning point. the way china grew by 18% is urbanizing 20 million people. that takes people with ok

skills, put them into a factory, and productivity skyrockets. but since 2008, productivity came down significantly. that is the squeeze, and people start to become unhappy. you don't get the same increases, in you get the protests, and that is a big concern. for a government which doesn't have political legitimacy, tha t's a very serious problem. therefore you have these very panicky policymakers. alix: such a pleasure to have you, as always. careg up, the u.s. health industry saw a record in venture capital investment and ipo. so what does 2016 have in store? we will discuss, next. ♪

scarlet: i'm scarlet fu. "what'd you miss?" it's time for the bloomberg business flash, a look at the biggest business stories in the news right now. alcoa reporting better than expected earnings. profit was four cents per share, two better than expected. the company is splitting itself in two amid a commodities rout. lululemon is hiking its earnings forecast. it is up from 75 to $.78. the company is also raising its outlook. the ceo says lululemon had a successful holiday season.

shares are moving higher in after-hours trading. andand sales of david bowie's mc are searching following his death. his new album was number one on itunes today, released on friday, two days before the 69-year-old musician passed away. other classics are also seeing increased sales. and that is your bloomberg business flash. i'm scarlet fu. health care is sucking of venture investment. take a look at the chart. that shows more than $10 million in venture money being poured into biotech, drugs, healthcare services, and equipment. with us now is zach tracer. what's interesting is all these new companies are being created as public ws the publicly traded ones are combining. >> we have seen a lot of investment across the spectrum, some really exciting stuff going on in biotech and folksceuticals, and

looking to take advantage of the affordable care act in gains in insurance coverage. it seems like that is across the spectrum. had this big jpmorgan health care conference going on. what are the big things that people are excited about specifically? at some ofre looking these pretty interesting biotech technologies, new tests for cancer coming out today. people have had questions going into it, that it would take -- m y senses that people came into the conference excited. the announcement was more or less in line, so the question is what's next? alix: what is next? especially if you can argue that what we saw from the aca is over, which is part of the reason we have seen so many mergers.

what do you expect to hear on that front? >> that's a good point. one of the big questions, especially in the hospital and insurance space, is what is going to happen? are more people going to get insurance or not? we had one of the biggest hospital companies in the u.s. talking today -- they sounded pretty optimistic that some of the obamacare gains won't slow as much as feared. whenever the next few days we will see talks or announcements, and people will be curious about what folks are saying. joe: what about gene editing? i know people are really excited about new technologies on that. editing people's genes. is that an area you see investment going into? >> there is a lot of excitement about gene editing. my colleagues have learned about that -- some of the gene editing has beer on tap. you'll probably keep hearing more about it. scarlet: we started off by

talking about venture capital money pouring into health care. eventually, some of that money needs to be returned to investors through ipo. biotech companies are likely to see a big pop. what kind of demand is therefore this surge in supply? >> we have seen a few years now of pretty good biotech, but we haven't hit the 2000 record although we have come close. it will be interesting to see whether we continue the uptake or head back down. scarlet: and what does that end up meaning for m&a? it was such a huge trend in 2015. what do analysts expected to be for this year? >> it was a huge year across pharmaceuticals, biotech, insurance. the question is what is left? i think you will see some the question, and is how much money is there on the sidelines in biotech and pharmaceutical's. joe: and then of course 2016 is an election year, all kinds of concerns about drug pricing,

obamacare. in terms of what the industry is looking at, how closely are they going to be following? >> i would say very, very closely. pricing has been such a hot political issue on both sides of the aisle. drugnk you will see companies really following this closely. the question in the u.s. is how which can you charge for a drug and get away with a question mark there has not been an answer you -- drug and get away with it? there is not been an answer yet. scarlet: republican contenders haven't said anything. >> they talked about it a little. this is something that is fuel when they go to the pharmacy. you have heard talk on that side as well. alix: thank you so much, zach tracer. we appreciate it. that conference is taking place this week. we will be right back. ♪

alix: i'm alix steele. "what'd you miss?" three things that are driving the global economy right now. we have a kicking off with cargo action. the cars across rail, are considered to be a decent indicator of the u.s. economy. we have seen rail volumes decline, in large part because a lot of petroleum is shipped by rail. i have broken this chart down into a few categories. petroleum shipped by rail is in pink. that's down quite a bit, down

20% year-over-year. what's a little bit worrisome, as some analysts pointed out, is that other categories are down as well. the light blue line is lumber volume by rail, negative year-over-year. crushed stone, negative year-over-year. even food is down. this is some data to watch. scarlet: i wonder what that says about the housing market. joe: that is seen as a bright spot, so that is cause for concern. alix: no shocker, i am looking at oil. particularly oil positioning. to get an idea of how negative investors are in the market. wti is the white line and brent is the yellow line. if umax this chart at right now, they are around record highs. the reason why this is important is that barclays pointed out that commodities as a whole are priced for a worse crisis than we have ever seen. ask yourself, is that kind of

pessimism justified, or our markets really overdoing it? joe: i feel like we have been talking about the gray short covering rally for a long time -- alix: and barclays was lowering their oil price forecast, and that is not inspiring confidence. scarlet: you can overshoot on the downside for a long time before you get the snap back. going terminal shot, i'm to show you the chinese yuan versus the dollar. that is the blue line. we have inverted it to show you that when the line goes down, the yen is losing value. the red line is the trade weighted yuan index. currency,rgeting the it is looking at it in a different way. the chinese yuan has fallen rapidly versus the dollar, but if you look at the difference, it pretty much has gone back to a level where it was in october,

and before that to the level it was in august. alix: meeting there is a lot more going on. coming out, what you need to no for tomorrow's trading day. ♪

scarlet: i'm scarlet fu. "what'd you miss?" don't miss this -- president obama delivers his final state of the union tomorrow at 9:00. this one is about shaping legislation and history. alix: csx. the rail is reporting tomorrow. don't miss it. joe: also don't miss tomorrow at 10:00 a.m. the jolt job openings, labor turnover.

great look at the labor market. scarlet: that's all for "what'd you miss?" ♪

john: today we would rather listen to bow we. ♪ john: greetings from des moines, iowa. or ground control. we are three weeks out from the iowa caucuses, and democratic candidates are gathering here in the city tonight for the iowa brown and black for. -- brown and black forum. it is built on the oldest presidential forum focused on