from bloomberg world headquarters in new york, good afternoon. u.s. stocks aren't extending their decline in trading. more on that after the beige book. brendan greeley is standing by in washington. brendan: the song remains the same, stuck with the same paradox. increased economic activity but little overall change in wages and price pressures. wage increases are flat to moderate, price increases, the districts reporting are minimal. we have some demand for labor, .ight demand for labor in new york, cleveland, atlanta, minnesota, but wage pressures -- here is a word to hang onto, some dude. that will not change anytime soon. -- some dude. -- subdued. one way to pressure there is, it

is evil for skilled and unskilled workers. we are finding there is high turnover in low skilled industries, hospitality, hotel. there are two things happening there. some pressure from state minimum wage increases. this is a policy question we have had for a while. that is resonating out through the economy. overall, minimum wage increases. when we are also looking at is this is a service oriented recovery. manufacturing other than motor vehicles and aerospace was weakened. one thing we are hearing again, not news, the dollars impact on exports. strong dollar is offset a little bit on the margins by the lower price of oil, but the trade weighted dollar, janet yellen is watching it. district manufacturers are really feeling it. david: one of the things that fed policy makers look for is what they think the economy is doing and anecdotal data.

what are we seeing with hiring? brendan: many districts reported that there is hiring across a broad variety of sectors. and again, we saw that in the bls numbers released on friday. 292,000 new jobs. happening is we have new jobs but it is not turning into higher wages. brendan greeley, thank you. our senior economics manager. let's go to julie hyman who has the latest on stocks. julie: let's see where we are having declines accelerate. it doesn't have to do with the beige book, but with this risk off sentiment that is in the market. a lot of concerns over global growth. all three major averages are down, the nasdaq has been taking the worst of it consistently today as we have large-cap tech decline. look at the s&p 500 on an intraday basis. you can see the drop, lower in

the past few moments, although now off the lows. nonetheless, a sharp decline for the s&p. within it, some of the groups most dependent on the economy and/or momentum moves have been doing poorly. the nasdaq biotech index, which has been such a momentum group, and have been battered last year , is down sharply this year again, down 15% year to date, losing another or percent today. the same on the dow jones transportation average. percent today.4 it's been an underperformer. take a look at oil prices. oil had been holding up relatively well today, on a relative basis, up .3%. we got an inventory number this morning that showed a record number about of inventories at cushing, oklahoma. it showed a smaller than estimated build in inventories,

however, so some resilience in prices today. people are looking for safety as well. that means gold prices are catching a bid, up to now more than they were earlier. the 10-year is getting a bit as well. treasuries in general. the yields are continuing to push lower. 2.08%, the lowest since october. taking a look at the dollar index, little changed today, up .1%. we are seeing a lot of concern -- i will not call it fear -- but concern certainly being expressed in the market. david: thank you. let's get a check on the first word news with mark crumpton. bek: this time will different, mexican officials say they are constantly moving walking el chapo guzan on from cell to cell now that he is back in prison. the drug kingpin is under 24 hour video surveillance which covers every inch of his cell.

the cell from which he escaped had a blind spot near the shower. a senior u.s. offense official says 10 american sailors who were briefly held by iran have been sent to a u.s. military facility in color -- qatar. the pentagon says that they left on the boat said they were operating when they lost contact with the navy. a french police official confirms at least three people are dead after an avalanche struck a school group skiing in else. early reports indicate there was an avalanche morning in the area be or the snow slide. a search and rescue squad is on the scene looking for survivors who may be trapped beneath the snow. members of the arden group occupying a national wildlife refuge in oregon say they plan to hold a community meeting this week. they say they want to explain themselves and let residents know when they will leave. the men, who oppose federal land

management policies, are under pressure from many locals to end the occupation that began january 2. a massachusetts judge has rejected a request by bill cosby's attorney to keep materials sealed in a defamation lawsuit but the judge did say that protocols should be established to protect sensitive information such as social security numbers. -- comedian isn being sued by seven women who claimed he sexually assaulted them decades ago. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. the fedhe president of bank of dallas sat down with mike mckee earlier today. it was robert kaplan's first interview since starting last fall. this exclusive conversation comes as the fed ways when to raise interest rates again, but the conditions on a second hike may be complicated.

are going to go up and down. this has been a very tough start to the year. theays a lot, though, about turmoil in the markets in china which are reflective of their underlying issues. it also says a lot about our companies in the united states. while exports may be less than 20%, and manufacturing is less than 20% of the u.s. economy, it is a much higher percentage of the profitability of the s&p 500 . when you see particular weakness outside of the u.s. and china, emerging market economies, it fx our companies, their profitability, it affects the market to a greater degree than in may affect the underlying economy. as a policy maker, you have to watch the market moves, but you have to realize they may or may not reflect what is going on in the underlying economy in the

united states. better yet, they can go down for two weeks and then rebound as they did in august and september and the underlying fundamentals are still strong. i would say you have to watch it and understand but not overreact. it takes time to figure out what the market may be saying to us. friday, the markets reported 300,000 jobs reported and monday the market tanked. does it worry you when the markets do not react positively to positive news? >> investors and the market are reacting to corporate profits and expectations of that. i am mindful of the fact that corporate profits in 2015 were down in the s&p. has not been a lot said about that, but they declined. weeks ofrst couple of the year, the end of last year, some of the estimate or corporate profit or 2016 have been revised somewhat down. it is as much or more reflective of prospects around the world,

as it is about the health of the u.s. economy. i'm not surprised that the markets are going to pay attention to other things. i think the job numbers helped bolster confidence in the u.s. economy, and we will have to see over a period of time. the market may not react to information in a day or a week, but over a period of time, they normally weigh all the information, and i think you will see a strong u.s. economy reflected. are the prospects for the rest of the world and in particular, china, and their prospects of 2016 on the u.s. economy? forecast for growth outside of the u.s. i would call sluggish. they are going to improve a little bit in 2016 but very uneven. for example, any country like venezuela, brazil, russia, that are exposed to commodities, are actually in recession. that will probably continue in

2016. india is a bright spot. china, on the other hand, is doing with a number of issues that are not cyclical. it will take years to do with overcapacity in their industries, overleveraged, aging population, and this transition they are trying to make from an export driven economy to a service sector consumer economy. that will take many years. i think the u.s. and world will have to get used to lower rates of chinese growth, and i think the world is adjusting to that, but that has implications for commodity prices. ,ome implications for u.s. gdp definite implications for u.s. domiciled companies trying to do business around the world. theworld and companies and markets are trying to digest all that. well robert kaplan was known at goldman sachs and harvard, but as a policy maker, people don't know where you are necessarily coming from. would you characterize yourself as a hawk or a dove? >> i would probably consider

myself, as a business person, a centrist. what do i mean by centrist? tomeans i am quite open looking at new information and changing my mind. i do not rate unemployment the risks ofion -- those and the importance of those are equal. but i do not come in with a preconceived point of view as a hawk or a dove. i am probably a person that is more focused on diagnosis, what to do and how to do it. at this point, i would call myself a centrist. i think you will see me at times advocate positions that sound hawkish, and then depending on the facts, what my analysis is, advocate positions that seem dovish. i think i will be seen as a centrist. david: that was michael mckee speaking with the new fed president of dallas. robert kaplan started on september 8.

coming up next, former treasury secretary larry summers says there is a real prospect the slowdown in china will spread to other emerging markets. the rams are heading back to los angeles with a $1.9 billion stadium. what that means for the nfl's bottom line and a team owner. crude oil months again testing the $30 mark. reports that stockpiles were at an all-time high. the commodity close is coming up. ♪

welcome back to "bloomberg markets." i'm david gura. is offeringch inbev bonds to take it back over of sab miller. it is likely to become the

biggest corporate debt offering on record. people familiar say the brewer may sell $46 billion of dollar bonds in seven parts. the federal budget deficit increased in december. 14.4eficit totaled billion. private economists are forecasting a slight improvement from last year's deficit of $439 billion. ibm receives the most u.s. patents in 2015 for the third straight year. they are extending their bet that clients will increasingly need and buy more services that use machine learning and similar technologies to improve business functions. ibm was awarded more than 7300 patents last year. that is the bloomberg business flash. it's go back to the markets desk where julie hyman has news on companies. julie: as we still hover around

the lows of the session, we talked about a couple of rings. the top performers from last year like amazon and netflix have rolled over and are on performing this year. even the most terrible performance from last year continue to do bad. the losers keep losing. williams companies was one example. because of the plunging energy prices, some investors are questioning their sale to energy transfer partners and whether that will go through. these shares have been declining for six days. freeport-mcmoran copper & gold have been falling. here is the one-year return for these companies. the declines that we have been seeing in 2016 are on top of very poor performance already last year. we are seeing other energy providers similar performance paired consol energy, one of the worst performer last year still dropping. kindergarten still dropping. if you look at their one-your performance, similar deep performance.

down 68% for kindergarten. it is not limited to energy. twitter, which continues to fall to record lows, down another 5% today. commentaryalyst affecting it. micron has continued to fall as well. take a look at their one-your performance. down 50% for twitter, 60% for micron. it is just a reminder that this 2016 performance does not always exist in a vacuum. in some cases, it is just an extension. david: thank you. sticking with markets and the economy, what are the chances of recession in the u.s., and could we see it in china? larry summers answer those questions. >> the right way to always make forecasts is with ranges of uncertainty. i will just say, i think history suggests that if you are looking three years out, it is a serious

mistake to ever assume that there will be no recession. that is a wrong assumption. that is not to say it could not happen, but that would not be the right planning basis. i think, in china, you are thatng at real prospects the slowdown will spread and increase, because it is a very profound transformation that china is attempting to undertake. even if it is undertaken in the most successful and smooth way, that will likely lead to slowdown. what we have seen does not suggest that we can count on it taking place in the smoothest and most successful way. rather to the contrary. you have almost a perfect storm

of problems in other emerging dissentbetween russia's toward lawlessness, growing apprehensions about south africa to majore led declines in its currency, political chaos, weak economic policy combined with the burden of low commodity prices in .razil the emerging market sector, which had been seen as a possible new salvation for the largelyconomy, has turned downward. at the same time, global trade has slowed. i see a gathering of deflationary forces at a time when the world is probably already in danger of being demand short.

things that we chinaot seen is -- best have an economic policy, and what should it be? china has achieved more, in terms of growth, extremely rapid growth now well over a generation more than any other country in history of the world. tot means it is a mistake fail to respect their policy makers, to respect what they have accomplished. i do think that the experience of investment-driven -- huge investment-driven export-based growth models in asia is, at a certain point, they burn out and

you need a transformation. the experience of japan after 1990, the experience of korea and the asian peninsula thatries in 1997, suggests that transformation is very difficult to pull off in an easy and smooth way. david: that was larry summers speaking earlier. my colleagues asked him about the possibility of how many fed hikes we could see this year. he said i would be surprised if the world economy could comfortably withstand four hikes. we will look at what the rams relocation means for the sports industry. ♪

david: welcome back to "bloomberg markets." i'm david gura. taking a look at the major indexes, down 1.5%.

the s&p 500 also down 35 points. the nfl, the richest sport in north america, is about to get even richer. the rams will be moving back to the country second-most lucrative sports market los angeles, and that will bring in millions for the league. you have written about how this one online billions of dollars. is that principally in tv? everywhere.ing from for stan kroenke, the owner, it is mostly from the stadium. the way the nfl revenue-sharing works, he does not have to share the local sponsorship money. etc., andcal signage, he does not need to sell the money he gets from suites and premium seedings. david: there will be a lot of those. >> the perfect market for that. the money he would have gotten is three timest that in l.a.. he is looking at massive revenue

just for him. talk of others teams following suit and coming to los angeles. when you look at what is good for stan kroenke, is it better if he goes it alone? >> there are some things that are harder with two teams in l.a.. if you are coke and you want to work with teams and l.a., you would want to work with two so that you can play off of each other. for the nfl, obviously, it would be a huge benefit. a few he bought this land years ago, was dreaming that this could happen for some time. >> it depends on who you ask. l.a., the nfl fans would say 21 years. stan kroenke says that he has been talking about it for couple of years. it has been a long play as a whole to get a team or two back to the second-most lucrative market. and that is the media thing. david: thank you. let's go back to the markets

desk with julie hyman. sorry. julie: luckily my desk is right to the set. i want to go back to brent crude. we don't have it up yet, of course, because this just happened. seeing brett are fall below $30 a barrel for the first time since april of 2004. wti falling below that level yesterday. now it is brent's turn to do the same. this goes along with the action we have been seeing. here we go. again, falling to a low of the we will be right back with more. ♪ . .

david: from bloomberg's world headquarters in new york, this is bloomberg markets. let's start with the first word news with mark crumpton at our news desk. mark: the house of

representatives has approved republican backed legislation giving congress greater oversight of the landmark iran nuclear deal. the vote occurred less than 24 hours after to run detained and then released 10 navy sailors. president obama will be to the measure if it vetoes his desk. secretary of state john kerry says the agreement with iran could be implemented within days. in paris is cafe reopening its doors today for the first time since the terror attacks two months ago. flowers andfresh photos of those killed inside still adorn the front door. two other cafes attack that day have already reopened. have been indicted on terrorism charges in mali in connection with an attack on a luxury hotel that left 20 people dead. two gunmen armed with assault rifles and ask lotion -- and

explosives storm the hotel in november holding hostages and opening fire. they are the first to be charged in connection with the attack. national -- michigan guard members have arrived in flint, michigan for briefings on the drinking water. flint us tapwater became leadminated with too much after the city switched its water supply in 2014 to save money while under state financial management. global news 24 hours a day. david: back to you. commodity markets closing in new york. cotton prices set for their longest rally. rising .9%, silver futures headed for their first gain in four days amid speculation the fed may slow the pace of interest rate increases. last month, silver touched the lowest in six years. oil fell after reports that fuel

stockpiles climbed. rosepiles at cushing 97,000 barrels in the week that ended january 8. it may not be all bad for oil this year. according to our next guest, oil prices should stabilize. thank you for being here. let me ask you about the news of the day. what we have heard about inventories, rising to an all-time high and capacity at 73 million. what is your take on that? guest: u.s. inventories continue to climb and production is still higher. concern whiles a eventually this year, prices should stabilize, we need the production number to come down and we are just not seeing that happen yet.

it seems like prices are low enough for it to happen and it seems like investments for many companies have come down and at some point this year, it should start to be realized in terms of lower production, but it's not happening yet. david: from your vantage in seattle, can you see the bottom? think with these sorts of declines we have seen, you would think so, but i think the answer is no. this is a market that wants producers to prove they are cutting production. pressureng more price to get that change in behavior still room, there for shorts to build in this oil market, so that is what we are going to see for the time being. you point out we have seen this uptick in bankruptcy filings. is that going to continue? rob: i think it is going to have

to. you need more rationalization in terms of ownership and decision-making. i think we will see more bankruptcy and more change in hands of oil ownership and that should be a good thing in terms of reduction. --id: i want to ask china ask about china but i want to talk about what we have seen in the middle east and the disintegration of relations between saudi arabia and iran. will that have an effect on prices? rob: eventually. you need to believe production is actually going to change. in the meantime, both of them need to produce more oil. until that changes, it's going to be hard for the market to put in a geopolitical risk premium. david: is the principal risk here technical? something less technical than that?

is it anxiety about the way the markets run or the way the government to me kate in china? rob: i think it is a little bit of both. you see manufacturing and production come down in that takes some of the starch out of the oil market. isthe meantime, the market piling on because you are not seeing good communication up policymakers. if we can get some clarity on the path forward, that may improve the market somewhat. the we can get down to underlying issue of what's going on with manufacturing and demand. i think it is a little bit of both. there other places where you are more optimistic than you might be when you look at the middle east or china? we are a little more

optimistic about europe and japan. you have real quantitative easing and structural reform. the interesting issue for developed markets is it may not mean as much in terms of barrels of oil because most all of us are looking at energy efficiency. fuel efficiency standards continue to go higher and that is certainly true in europe and japan. you will probably see better growth, but it doesn't mean as much for demand and oil. david: thank you very much. billionaire oil tycoon, harold hamm, was one of the earliest and biggest shale producers. he says producing oil will double by the end of the year and spoke with alix steel about the recent price plunge. >> i have not spent a lot of time trying to call bottom on the market. it is where it is. lower it goes, the shorter the time it's going to be there.

so it will play out like that. we've seen several things that will move the market higher throughout this year and we are close to an inflection point on price. alix: many see prices increasing and you have to model around some forecast. what is it? everybody thought about following the script and that's historically wrong. we have our own estimates of what that will be in the future looking atprobably $60 prices toward the end of the year. i believe that in that is what we are looking for. we are fighting predatory pricing from the saudi's. they are the only ones with any excess capacity. on. have turned it all

the excess production came on in the end of 2014, so that has been the oversupply. a little over 2 million barrels a day. out, and we are seeing that narrow to almost nothing. that's what it's looking like. david: that was harold hamm earlier on bloomberg television. the dow jones down about 2%. 2.2%.p 500 down about this is bloomberg markets. more after the break. ♪

david: welcome back. let's go to the markets desk. julie hyman is there. flustered by all that's going on in the markets. the selloff is accelerating. likened ital twitter to a flushing toilet. it hasn't been a pretty market for the bulls this year. the s&p 500 down and the nasdaq is leading the declines, down more than 3%. at oilake a look again prices. we have seen them move lower as well. as $29.96.ed as low above% now and holding $30 barrel. below $30 aady gone couple days ago and then came back up. but we see wti selloff and

stocks are selling off. there is a hold risk off sentiment in the market right now. you can see the intraday move mirrored by the other averages -- just a long slide with the dow jones down by 3%. the nasdaq is down by nearly 10%. down 9.5 far in 2016, percent. i've been trying to chart whether we have reentered corrections. is the s&p 500. before the august and september selloff, we are down 10%. morean judge it from the recent high and from there, we are down nearly 10%. either way you slice it, it has been an ugly start to the year. you can look at the cliff we

have fallen off of as the negative market sentiment seems to have come to a head. what is intriguing is whether it is china or oil, there is not really new information that has entered the marketplace. david: so true except that vivid twitter imagery of the flushing toilet. thank you very much. the iowa caucuses, the republican contest is tight. ted cruz and donald trump are neck and the can so are marco rubio and in carson. joining us with the results of the just-released i will pull is fromhalperin, joining us sunny looking pensacola, florida. we will talk about the race for third place in a second but let's talk about the race for first. ted cruz still in the lead in iowa. mark: statistically, they are

within the margin of error and it represents a change from the last poll where ted cruz had a big lead. ted cruz has come down and trump has come up a little bit and those guys have egg followings in iowa and draw big crowds. iowa is not the end of the despite a year of craziness and lots of speculation, we know that barring some cataclysmic event cruz or donald trump will be first in iowa and that's going to be a big deal. when you look at the results of this latest poll, there is a bit of information about how donald trump's line of attack of where ted cruz is worn is playing out in iowa. our poll suggests that iowa republicans likely to go to the polls are not big on that. they don't -- that doesn't mean trump isn't keeping it up because it is discombobulated,

at least to the extent that ted cruz has to keep answering questions about it. i don't think he thinks it's going to be a problem, but trump is a master of dominating the dialogue and he has done a good job making this an issue. this has not been ruled on by the court and it is possible that trump is right. trump is saying that it is an open question and he is right in that sense. a major development in the race over the last four to eight hours is ted cruz is not just defending himself but criticizing trump for being associated with new york city and being associated with the kratz. now the two front runners in iowa and nationally are engaged in the kind of akin fourth you normally see between candidates. david: let me ask you about that race for third place with marco a deadnd ben carson in

heat there. how important is it for one of them to come out in third place? marco rubio does not have a big organization in iowa. if he finishes third, that will give him a leg up competing with chris christie and jeb bush and say you are worried about trump, get on board with rubio. third, givenishes his lack of standing in some of the other early states, it's not necessarily good news for carson as it would be good news for the beders because they might able to convince people of a two-person race and that would be good news for bush, christie go john kasich who could with a junkball and saying rubio is the establishment choice. you very much.

donald trump be the featured guest tomorrow on "with all due respect." plus the newest bloomberg poll showing how the democrats are faring in iowa tomorrow at 5:00 eastern time. coming up, we will hear from the world's -- the manager of the world's second-largest asset manager. he spoke exclusively with erik schatzker. the dow jones is down about 2.2%. the s&p down 2.5%. this is bloomberg markets. ♪

david: welcome back. the major indexes, the dow jones is down 363 points. i want to go to julie hyman at the markets desk for more on the

slide we are seeing. julie: the slide is deepening, thereg momentum and doesn't seem to be a particular catalyst. just worsening sentiment as we are seeing the indices tumble. one of the negative signs is that this selling is happening on high volume. seeing what market artisans call capitulation. heavy volume selling that kind of exhaust itself. my bloombergt terminal. i'm looking at volume by groups. all of them are up, health care and consumer discretionary are two of the worst performing groups. other market internals are 52 week lows. market, see gets in the you tend to see spikes in lows

relative to highs. run offinitely seeing a an excess of 52 week lows versus 52-week highs. just another way of looking at what is going on in the market. consumer discretionary stocks, financials and all of them deepening their declines with utilities remaining higher even as this selling is going on. partly because we have bond yields going lower and people are looking for safety. otherwise it is quite a broad-based selloff. let's get a check on oil prices. we have been watching them closely because of the selloff that has resumed in oil. we saw oil getting a lift and even now it is little changed. the selloff has been corresponding between stocks and

oil over the past month. but now that does not seem to be as much of a case. was astonishing to watch the lady track each other here. you can't underestimate the psychological aspect of oil prices. julie: and oil has already fallen so much where stocks, the magnitude has not been as great. david: with $225 billion in assets, brookfield holdings is the world's second-largest alternative asset manager, second only to blackstone. in this exclusive interview, erik schatzker asked if now is the time to put your money and oil. now is the time to be putting money to work in and

around oil in the low 30's. our infrastructure businesses owning the backbone of the global economy. courts, we own rail lines, we own pipelines, electricity transmission systems. aroundthose things are the commodity business. not all of them, but many of them are around the commodity business. those companies need capital today and our capital is available to harvest assets which are really unproductive to the mainline business. they kept those on the balance sheets because those assets were somewhat core to them but were unnecessary. we can provide significant amounts of capital to put into their corporations and when they had lots of money, they did need

to do that. , all thecreasingly commodity companies are looking for capital. erik: some people have tried to get into industries and businesses around oil and gas and found that they have tried to catch a falling knife and it hurts. we bought an oil and gas business in western australia. the apache operations. had all of the gas and oil going forward for a long time, earn a- we are trying to conservative return over a long time. so when we go into an investment, even though we are contrary and in nature, we are always trying to protect the downside. first and foremost, we think about downside protection and then we think about how much

return we can are for our clients. worry about oil prices and the impact it's going to have on your company? edges, leasinghe is not as robust as it was three years ago. our commodity infrastructure businesses are not as good as they were a few years ago. but it creates opportunity. i would say it is around the edges for us creating a few issues, but it is modest and for us, there's more opportunity coming then the issues that it brings for us. commodities are volatile and it does mean they always go down. at the top, we don't think they will ever go down but they always do. that's why they are called commodities. if they are low today, they will be a higher price and if they

are low, they will be low. erik: how can you be so sure? guest: it is supply and demand. when natural gas sells for less than the replacement cost to bring it out of the ground, it may take a while but ultimately, people will justify the cost of the more money into it and therefore the price will go up spend. you will have to you cannot bring natural gas out of the ground for two dollars forever. david: you can check out the rest of that interview on bloomberg.com. the nasdaq down 2.8% and the dow jones down 2% as well. ♪ we live in a pick and choose world.

choose, choose, choose. but at bedtime? ...why settle for this? enter sleep number, and the lowest prices of the season. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore. 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. york: it is 3 p.m. in new and 4 a.m. in hong kong. welcome to bloomberg markets. good afternoon. i'm betty liu.

we are one hour from the close of trade and we start with breaking news on the markets. here we go again for the third day in a row -- the selloff deepening in late trade as the u.s. fails to build on the gains around the world. the dow jones now plunging down 300 points and more. former fed governor tells us whether this will change the fed's mind on further rate hikes. brent crude dropping below $30 a wentl a day after day bti below that number. how are america's oil and gas users dealing with the selloff? and adding to the carnage -- banking shares that jpmorgan to report earnings tomorrow. shares of morgan stanley are slumping to their lowest level in more than two years. how had is the climate for banking