from bloomberg world headquarters in new york, good afternoon. u.s. stocks bouncing between gains and losses after this morning's rally. oil hovering close to $30 a barrel. thousands expected to tune in for jeffrey gundlach's 2016 announcement. the hits and the mrs.. sses.e hits and the mi how president obama plans to call for a divided nation to come together. first, let's head to the markets desk where julie hyman has the latest. julie: markets bouncing down again. every moment you look at it, there is something different going on. the doubt now lower come s&p now higher. it is very, very small. the nasdaq holding on to its gains as it snapped the losing

streak it has been on. a lot of attention being paid to oil prices today. that correlation returning to some extent. oil close to $30 a barrel. not as low as $30 and six cents earlier in the session -- $30.06 earlier in the session. energy shares are selling off, material shares and selling off. a lot of the big cap tech stocks coming back today. google, facebook, consumer discretionary stocks bouncing back. to some extent. even these groups are bouncing around a good bit in today's session come except for energy, which has been lower throughout the day. david: we saw the bloomberg commodities index at its lowest level it is been at in years. julie: since 1991.

here is the call me want to look at. this is the energy complex. -- column you want to look at. wherever you look within metals or energy, you are seeing the clients. you do tend to see this inverse correlation -- dollar index up .25%. another place people are looking environmentn this is the bond market. quite a dramatic move. the 10 year has been accelerating. 2.09%. the irony is that this is an environment in which come on paper, the federal reserve is raise rates several times this year. 2.09% does not indicate that. david: let's check on the bloomberg first word news this afternoon. mark crumpton has more. mark: turkish authorities and say the man responsible for a suicide bombing in istanbul

today was a 28-year-old from syria with ties to islamic state. 10 people were killed and 15 wounded in the blast which tore through a popular tourist area. eight of the dead were german nationals. iraq's prime minister promises to keep up the fight against until theate an extremist group is expelled from the country. this comes days after an attack at a baghdad shopping mall. it triggered a wave of retaliatory attacks on sunni mosques. islamic state posted a statement warning of worse to come. the u.s. supreme court has struck down florida's law regarding the death penalty. they eat-one ruling comes in the case of a man convicted in a fatal 1998 stabbing. -- the 8-1 ruling.

vice president biden says president obama offered him money during his sons battle with cancer. said the president made the offered during a private lunch. the vice president says he was concerned about his sons bills and possibly having to sell his home. beau biden died in may from brain cancer. the president will deliver his final state of the union address tonight. he will layout and optimistic and broadvision for the country's future. president will focus on his administrations success, including reaching a nuclear deal with iran, restarting relations with cuba and negotiating a budget deal with congress. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. the people'sght,

bank of china reportedly stepped up efforts to shore the yuan -- the latest in a series of moves to ease investor concerns about a hard landing. the team at ubs wealth management seemed optimistic about the year ahead. officer --nvestment running is is the emerging markets chief investment officer at ubs wealth management. is the emerging markets chief investment officer at ubs wealth management. that was on january 4. we've seen tensions in the middle east as well. that.hold to this is a fundamental issue. >> it is undeniable, the amount of risk in the market has increased.

we think at the end of the year come equities will be higher in the u.s. than globally. wti below $30 a barrel. i turn to tracy alloway. oil is such a huge part of this story. numbersill have round to ease -- that signifies a change in sentiment. to watch oil'sng perpetual march lower. people have been wrong for the past few months. david: a lot of people speculating it could get to around the mid-20's. >> 20 seems to be the new consensus. then 10,ow 20 and let's hope not. david: let's talk about manufacturing in china. how concerned you are. >> manufacturing continues to be

relatively weak. china's industrial sector is not doing well. it will not do well in the near term. the service economy is doing relatively well. the economy continues to slow down. it is not collapsing. at the center of this is the exchange rate policy. but the chinese have done is change the rules of the game for the exchange rate. the market is having a hard time understanding how that works. david: help us understand the importance of this big we've seen the spread narrowed a bit here. this is something the imf cares a great deal about. >> what we saw today that was really interesting that set the tone for the rest of the day was this big jump in the hong kong interbank borrowing lending

rate. that is a pronounced jump. that came about as the chinese government was reportedly in the market line up -- buying up offshore yuan. that is important because china is trying to get its currency into the basket of the imf. the problem is those sorts of sudden moves have the unfortunate tendency of smoking short-sellers. a lot of short-sellers who were selling the yuan today in a lot of pain. , theyy wanted to short would have to be aware that they might end up getting quoted at the market rate. lots of volatility in the markets today. david: let me ask you about oil and your take on the credit market.

when you see oil going down to this level, what is your take on what's happening? >> there continues to be s too much of supply. the story is about supply. we don't see any signs of supply shrinking in the short tempered when oil this low, i worry about the hotspots around the world. venezuela, russia and mexico under some stress given these lower revenue expectations. it puts a lot of stress on the hotspots around the world. david: when you talk to folks about this, how important are these geopolitical factors when it comes to the price of oil today? >> hugely important. opec is the central bank of oil. my thinkculty now is there was a tendency to assume that a lot of this was on the

supply side. we are starting to see some investors and analysts question whether we have a demand problem. between analyst commentary come out looking at places like china where oil demand has been quite resilient. they figure it will slow down in the new year. that could be a massive change for markets. narrativeing the shift from supply-side concerns more to the demand side. david: do you agree with that? >> there some concern about global growth, clearly. that is hitting all commodities. the answer is supply. opec getting its act together. some of this correction has already happened. demand is a factor here, but not the main factor. david: i wanted to ask you about the news we heard this week that

saudi aramco might be waiting in an ipo.eighing what effect would that have on the oil market? >> i don't think you will have a major effect on prices per se. it has an effect on the finances of saudi arabia. they will experience a 15% reduction in gdp in 2015. they are under a lot of stress. david: thank you very much. i want to go back to the markets did julie hyman taking a look at a price of oil. julie: you probably heard me yelling in the background. as we talked about what was going on with oil prices. it did dip below $30 a

barrel just a few moment to go. whereled the moment here it went to $29.93. as we've seen all day, we've been seeing the correlation between stocks and oil prices. as we'veom in here seen the correlation between the two continuing. we see oil prices fall to their lows of the session as well. .e will keep monitoring this december 2003, that is the last time we saw oil this low. david: amazing. markets desk. the coming up, more bloomberg markets here after the break. ♪

david: welcome back to bloomberg markets. time for the bloomberg business flash. the outlook for corporate borrowers is the worst since the global financial crisis. standard & poor's and says potential downgrades exceeded potential upgrades by the most since 2009. ander growth in china commodities -- california saying no to volkswagen's plan to recall vehicles. to engines and sold from 2000 900-2015. the rejection is an opportunity to find better remedies. -- 2009-2015. nissan planning to battle back against the emergence of carter sharing -- of car sharing with more connected vehicles

consumers can customize. -- sum a lot that is the bloomberg business flash. julie hyman has a check on company movers. $29 90 three cents, barely below $30. it has bounced above it once again. -- $29.93. stocks still trading near the lows of the session as well. we will keep an eye on oil to see where it closes out. we are also watching time warner. headlines just out from the new york post causing a reaction in the stock. is not of the company interested in a spinoff of hbo.

he would entertain a sale of the whole company. this adding to the drumbeat of speculation already out of the marketplace about the state of time warner and whether someone else will come in and buy it. this bike up and the come down in chairs, still up by 2%. -- the spike up. analysts looking at the seller we have seen in the stock as an opportunity for investors to get it. wells fargo report its earnings on friday. coke is another stock where we've seen some degree of strength. up by 1%. it was upgraded to buy at cecil nicholas. $41.99 today. even in a week macroeconomic environment, coke should be able to improve. apple has had a tough go of it. its gains for the

day, still holding onto a gain of .4%. saying it is worth buying the stock. david: thank you so much. let's get more insight on why bank of america is turning more positive than apple. reportsd a litany of from analysts looking at apple, warning about supply of iphones, demand for iphones. recaps of what we've heard. >> there's been reports that there has been a slowdown in supply for iphones. apple is telling these companies they will not need as many. iphones account for 60% of apple's revenue. the last thing you want to hear is that there is a slowdown in demand for their main product. david: you've taken a look at a report from another analyst. they survey more than 1000 people over in china to see what

their stance was on different iphones and things like that. one chart that is super respondents that have smart phones that are not iphones, 32% plan on their next phone purchase being an iphone. they are trying to grow that market share in china. david: something to highlight as well is how quickly they want to get new phones. >> in america, i buy a new phone every three years. , 57% say they will buy their next phone with any year this within a year. 57% say they will buy their next phone within a year. david: something else in this report speaks to the stickiness of the apple ecosystem. if i buy an iphone, buy an ipad. that is happening in china. a a lot of people have

macbook or iphone and want to have the whole thing. it all sink's together. -- syncs together. chinese consumers are starting to turn that way as well. david: are these other makers in china try to get into this market? how are they doing? >> they are doing well. samsung is a notable one. a lot of them are switching over to the iphone. somewhere good news for apple these days. -- some rare good news for apple these days. that ise heard reports based on this survey, things are still looking good for apple. look at the numbers and their guidance come especially when they have earnings january 26 -- take a look at what the numbers

are and what the guidance is, more importantly. quickly calledne oil and junk bonds in 2015. what is jeffrey gundlach predicting for 2016? ♪

david: welcome back to bloomberg markets. a big event later today that will be closely watched. and influential american gets his forecast for the future. his take on what the fed is wrestling with. i'm talking about jeffrey gundlach, cofounder of doubleline could he gets his predictions for 2016 in a webcast after the closing bell. i'm being glib. this is something that will be closely watched. >> he made a lot of accurate predictions this year he

outperformed a lot of his peers. it is worth paying attention to. david: talk to me about what he got right. let's start first with oil. was over production. there's no reason for company's reduce production because they all need the money. if prices fall, they will increase production more so they can increase their national revenues. we saw that happening in saudi arabia and the middle east this year. ,s more countries are coming on putting up more oil, too. david: he said don't go whistling through the graveyard. >> that's right. he was concerned because oil, because commodity prices were falling so much. that there would be a lot of bad debt out there. we saw the markets shudder in august and again in december when 3rd avenue management cut --

david: he's that inflation will be nonexistent. and protectedtion securities are for losers. >> he said there is no reason for inflation because of what's going on with energy, commodities, etc. anybody who spends money to get these treasury inflation protected securities is spending their money in the wrong place. they were down 1.8%. david: talk to us about what he got wrong. one of the things that did not pan out was gold. he said with everything else going on, people would be buying gold. this is as good a time as any to be buying gold. everything went down. david: i know you cover bill gross as well. why that might be the

case considering that fund seemed to outperform a lot of its peers. >> it was the end of the year. a lot of people said it is december, what do we do with our money? there have been withdrawals. the biggest withdrawal was george soros pulled out 500 million dollars. that came in november. maybe people waited a few days until december. bill gross did pretty well and he made accurate forecasts for the year. john, think you so much. oil falls below $30 a barrel for the first time since december. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. david: from bloomberg world had chris new york -- world headquarters in new york, this is bloomberg markets. mark: the house of representatives expected to vote

today to punish north korea for its latest nuclear test. legislation would bar kim jong-un's regime from the hard currency lawmakers and say it needs to build weapons. panel of experts says existing united nations and sanctions on chongqing are not being enforced. -- on pyongyang are nothing in first. -- not being enforced. a report claims mail park employees allegedly propositioned female colleagues for sex and other inappropriate behavior. more than a dozen employees filed a complaint over a 15 year period. disciplinary actions were inconsistent. hillary set to accept an endorsement today from a major gun-control group. the brady campaign to prevent gun violence will formally announce its support at a

campaign stop in iowa as the democratic presidential candidate has been challenging her rival on gun-control. rupert murdoch is engaged to a former supermodel. hall. they got engaged over the weekend in los angeles where they attended the golden globe awards. it will be his fourth marriage. news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. david: as commodity markets are closing, the big story of the day is oil. crude slipped to its lowest since december 2003, falling to below $30 a barrel amid concern over turmoil in china. of the u.s.eciation dollar may send brent oil to as low as $20 a barrel according to morgan stanley.

let's bring in peter. let's start with the role that china is playing. help me understand this year. sentiment of of what's happening in china were very real concerns that demand may be changing? peter: real concern. when the equity markets in china are having emergency stoppages for multiple days, the markets tend to worry about what's going on in terms of demand. where it is coming from is really the emerging markets, china in particular. areas weakness in those is not a good sign for oil. is where aed world large bowl to the consumption is currently happening but not where the growth is. the emerging markets in asia ofre we are seeing that kind growth. david: talk about the psychology

of all of this. you have forecasts for the mid 20's. hearing that has to have a profound effect on how this thing is priced. >> it definitely does. expectations are very important for the markets. it's important to recognize these psychological manifestations happening in the market. really negative feedback loops. we recently saw a pioneer -- the resources q longer they can raise capital, the lower oil prices will go. you mentioned china. the weaker demand in china, the lower the oil prices. opec weakness. as oil prices go lower, there budgets get constrained. as there budgets get constrained come of these companies require oil revenues to make the shortfall. they are incentivized to produce more. we could see these negative feedback loops broken before we

can see oil take a breath. role: makes me wonder what opec can play at this point in time here. now, with oil prices this low coming think they would be able to do something -- >> their next scheduled meeting is for june of 2016. we just heard the weaker opec members calling for an emergency meeting. there is no discussion of having that emergency meeting. they are pretty much powerless. they are trying to drive the high cost producers out of the market. david: let me ask you about saudi arabia. context of the potential for this ipo. what does that say about the state of saudi arabia? absolutely.

saudi aramco, this may be the worst time in the history of oil markets for them to float the ipo. this gives them an opportunity come another buffer to prolong this strategy for even longer. dish we talking about a substantial amount of dollars. that leaves them open to capital races in the future this raises in the future. today, we had two different views on oil. they spoke earlier today on bloomberg markets. >> two things don't change in the oil market. one is the price of the marginal barrel of crude. the other thing that continues to go up his demand. >> every 10 years, we get another 10 million

barrels of demand. we are in the midst of an oil selling season. what's happening right now is parabolic downside -- that is really what it's like. the bottom price does not matter. it will expedite the death knell of several producers, both in -- we forgettes the canadians are in deep trouble in terms of oilsands. their breakeven prices are even higher. we will see a lot of production coming up line in 2016. that will pave the way for a huge supply shortfall in 2017. that is when the prices will rebound quickly. lix: wti at $30.22. you're $37 like

outlook is too optimistic in the short-term? >> from our perspective, we cwt wti at $29 in the first quarter. we do see a rebound over the first part of this year. wti at $29. we had an extremely weak weather season here. el niño in the united states and the northern hemisphere. we have implementation for iran. they will come back on sooner than many in the markets expected. show production has proved resilient, even at these low prices. producers continue to cut costs. they continue to high-grade the assets they have. they continue to have more and more production coming out initially. what that means is that we need to see prices at this lower of theor over the course first half of this year to see

the shakeout that will lead us to wait higher price level in 2016 and 2017. it will be very tough to break $100. we are in the 60's for 2017. 75 and 85 by 2020. the real conundrum here is when is that turning point? when it is apparent to that market that there is not sufficient supply to meet excess demand. the time will be later on 2016. -- than a 26 can. david: coming up, president obama says he regrets the divisiveness that is grown in the u.s. doin during his tenure. his fund is one of the biggest investors in berkshire hathaway. and theent holding

impact of china on his global investments. dallas fed president robert first national interview since taking the post last fall. ♪

david: welcome back to bloomberg markets could time for the bloomberg business flash. job cuts of on the way at bp. -- on the way at bp. bpt will bring the number of upstream jobs to fewer than 20,000. the wellstone has cut into the revenues.

#the u.s. labor market is boosting the economy, the labor department says job openings increased in november by 82,000. hiring climbed to the most americans since april of 2008. labor couldd for mean faster which growth. the launch of a nasa mission is next for spacex. that is your bloomberg business flash. stocks bouncing between gains and losses as wti that just below $30 a barrel for the first time since december 2003. julie hyman is standing by. julie: nine straight days that we have seen the xpi on the

decline. falling again today. not a huge decline. .ill down right now by 75%. andmpared it with the sp y the broader health care etf. for all the talk of all the volatility and criticism of many biotech companies as momentum stocks come up a lot of the year, it outperformed. that ended as the year went on. this is all adjusted for a percentage shipped -- we have seen it now fall behind the other two. we will see if that underperformance continues. we had drew armstrong on several times today taking about reaction out of the jpmorgan health care. there has not been that much news.

this is a biotech/specialty pharmaceutical stock down 3% today. which is of headlines the continued selling. regeneron, similar situation there. downbiotech stocks as well even more today. these are just a couple of examples. david: julie hyman at the markets desk. coming up, it has been seven years since president obama took office. economic entity the republicans are still taking the president to task on? ♪

david: welcome back to bloomberg markets. president barack obama goes

before congress tonight for his final state of the union address. tonight will also be a first for new house speaker paul ryan who will sit behind the president. he talked about the fed and how he says it helped generate weak economic growth. us mores given regulations, higher taxes, more uncertainty, gold and economics. -- trickle-down economics liberal style. people on the high-end are doing well because of lose money from the fed and all these regulations are giving us weak economic growth. david: joining us is brendan greeley. scratching my head and they're a bit with the trickle-down economics liberal policy thing. , can wepeech tonight expect there will be a lot of talk about the economy? >> there will be. it is his last speech, a chance to look back over the course of what he is been able to do. all the materials the white house has prepared looking back over the entire span of his

presidency. there is something in that paul ryan quote most economists agree with. what the fed has done is increased asset prices. that is what qe does. that has not combated inequality. there's evidence that loose actuallypolicy increases income inequality. what the president is going to do is look back at job creation and on implement. -- unemployment. he has the unemployment rate -- we've heard it every job state. that has not happened since ronald reagan. that is really good news. this blockbuster jobs report, 292,000 jobs in december, that will not hurt. are issues that economists cannot figure out, the fed cannot figure out. the labor force participation rate. we know the demographics are changing. people are leaving the workforce. not explainhics do the number we have right now,

62.6. the drop in labor force participation has flattened a little bit. and might be showing a hint of raising. that is a real problem. something barack obama has to be aware of. the issue is wages, wages, wages. that is what you will see on the campaign trail. the president has not been able to bring up the median wage. you are hearing that on the campaign trail. david: let mesk you about the format of this speech. this will be something different . they released a video today in which the president talks about what he might say. he wants to lay out three or four big ideas. would all be valedictory? shacklingmat will be hillary clinton to be agenda here set up for the democratic party. giving aey is not

republican response but a republican address. bloomberg's coverage will be anchored by brandon tonight at 9:00 eastern time. i sat down with arkansas isernor is hutchison -- hutchison. i imagine president obama might talk about tax reform. governor hutchison: the individual tax reform is most important. we've already reduced the individual income tax rate for middle income from 7% to 6%. we would like to do more. that is my focus. reform thebe able to corporate tax structure. we are not competitive with our global partners. we want to attract capital back to the u.s., if we want to keep our major companies from saying it's more attractive to be overseas and the we've got to be able to lower that. this is an area we ought to have

bipartisan cooperation. the president knows we need to take a look at that and set aside the things we disagree on and say this is something we can fix. david: president obama restored diplomatic relations with cuba. you decide to make that trip? governor hutchinson: it's a fascinating country very close to us. arkansas has a strong agricultural base in poultry and rice and the market is wide open for us. market of 11 million people in cuba who love poultry and rice and water products. i restrictions on extending credit to them prohibits effective trade. ther four decades of embargo, it's time to get fresh look at it. i was there. president obama did the right thing. ways tontry has long go, but we have an opportunity to increase trade.

the first step is allowing credit transactions with that country. david: sitting in the first lady's box tonight will be a syrian refugees. you don't think they should be resettled in arkansas. you're concerned about security. you have a lot of experience with homeland security. do you still maintain that same position? hutchinson: we have to get it right in terms of checking and security whenever the fbi and homeland security would certify that our systems are in place to make sure that we are safe and secure, we ought to take this refugees. i've also said that as a matter of policy but we want to be a compassionate country but we've taken refugees from central america, many other countries. challenge.nique syrian refugees to be located elsewhere than coming halfway

across the globe. it is not a religious test. the heart ofok at terrorism, where it's coming from, have ample checks in place before we start having a flood of refugees. david: you've endorsed mike huckabee. he says if he is not in the top three in iowa, he will get out. governor hutchinson: he is working hard in iowa. let's see how that goes. if governor huckabee makes a different decision, i want a candidate that is pro-growth in terms of our economy, that will try to bring people together. and then i want someone who has a realistic view of the world in terms of threats and will make america stronger and not weaker. david: you comfortable with the direction the publican party is

going this republican party is going? governor hutchinson: sure. that's what primaries are about. you are always concerned during a primary. we have to be about expanding our base and not shanking our base. expanding our party in bringing more people. our message has to be one of lifting people out of poverty. responding to the needs of the middle class. and driving our economy forward. you have that kind of a message and people will be drawn to our party. david: that was arkansas governor asa hutchinson. bloomberg west anchor emily chang joins us from san francisco to talk a bit about genius, which used to be known as rep genius. a tool for promoting a speech, somewhere, something like that. what has the white house forged this partnership? emily: president obama has

done a good job of leveraging digital platforms. doing things on instagram, ama's on reddit, funny or die. getting a bit nostalgic. this is the last state of the union address. when you take a look of the genus page, you will be able to see those annotations, additional content, commentary from president obama's former speechwriter or even vice president joe biden you can also contribute to this. it will be heavily curated, but this is the first time that the white house has partnered with a company like genius. the address will also be streamed for the first time on amazon instant video. you will be able to see it in a number of different ways. david: the white house has partnered with medium in the past. they try to forge relationships with these internet startups. is the white house trying all platforms to see what sticks?

emily: they are trying to be where the people are. they want to meet us where we are. they want to reach as many people as possible. isthat is on genius, that worth investing their time in. arethe political candidates trying to leverage different social platforms. interesting outreach by president obama today. david: tune in later, she will be speaking to the cofounder and ceo of periscope. don't miss our coverage of the state of union tonight at 9:00, hosted by brendan greeley here on bloomberg television and bloomberg radio. ♪

>> it is 3:00 p.m., four :00 in london. welcome to "bloomberg markets. "

♪ from bloomberg world headquarters here in new york, good afternoon. i am betty liu. stocks took off at the open, and they are now back in the green a little bit. for the firstws time so far this year. why was there some volatility? blame oil prices. oil plunging to the 20's for the first time since 2003. rebounding before closing, oil has lost 15% in the last six sections. berkshire hathaway's worst years, is it time to warren buffett to change strategies to get his groove back? we will hear from tom, whose firm is a large investor in berkshire