>> i am joe weisenthal. "what'd you miss?" higher,stocks closing s&p getting the most in six weeks. joe: the question is "what'd you miss?" the price of oil and one long-term chart. get ready for the havoc. we begin with markets. whiplash anyone? back with bouncing his much as 330 points. like it, butel stocks have rallied three times. joe: it does not feel like a week unchanged. the market fell a little bit.

a little bit of weakness late in the day. theid seem like a day where gain in the futures market was raisedo be a race -- b erased. you can see how many times we have come up to this neutral line, three times at tried to break the 1943 level, can't hold it, and the klein. it -- and declined. it looked like we would rally and didn't make it. now closing off the highs of the session. technical chatter yesterday, such a big correction, such a big decline, we will see a bounceback. does this have legs?

intel with results higher than consensus estimates. itemsa couple of outstanding not factored in. $14.9 billion fourth-quarter was $14.8stimate billion. than gross margins, better 62% anticipated. full-year growth margin is 61%. cory johnson looking into all of this. he will explain which of these numbers we should focus on. y:r going forwards, the company has absorbed the acquisition.

sell chips and data centers , so they're getting bigger in the good part. the pc business is getting smaller, so the non-gap guidance is important. it is good, better than expected. non-gap guidance for revenues , they are saying $14.1 billion, better than what analysts were predicting. on the third page of this release, a lengthy discussion about the business outlook. i will dig into it some more. i think it will be important talking to the ceo before the conference call about the quarter and the year. the pc business looks worse than what intel predicted the year

ago. while the decline was expected, it is not getting better. the 10% loss in the fourth quarter was a disaster. intel. bad news for 3%if you look at shares down in extended trading. thank you so much. cory johnson will be back to el's cfo.h inty >> i want to take a look at the volatility in currency markets, here at home and stocks. the green line is the euro -dollar. .he white line is the vix

we've seen a lot of blame and movement into the close. movement and flows into the close. this is a u.s.-stock story. joe: i did not realize it was so isolated. i want to talk about this morning's jobless claims number. talking about how the labor data is better done other data. people have been talking about how initial jobless claims have been picking up, a little worse than people expected. tank line is the 52-week pink line ise -- the 52-week moving average. there is no evidence of a trend

change that would signal a slowdown. >> don't get too worried about that. i'm looking at one technical op, oilor for x exploration and production. a lot of pain there, down 47%. the relative strength index is at its lowest, below that green line, indicating an oversold condition. the rsi has shown in oversold conditions plenty of times in the past, and that has not signaled a short rally. rose $.88 on the take for will it people to believe this etf is ready?

you can see all these charts and more on twitter. is theing us today senior director at the black rock institute. peter, great to see you. >> we struggle to come up with specific catalysts why risk assets selloff. when we see a pullback, is it a reality check about basic assumptions of the market? >> that is one source of volatility. we are shifting gears in the big way with the fed moving into a tightening mode. we know the plates are shifting. fed goingtioned the into a tightening mode, that was well telegraphed, expecting it for a while. does the actual mechanics of the hike -- do you think that is affecting this market? >> i don't think it is the

mechanics. the big deal is from targeting assess prices to normalizing interest rates. something that's going to be more disciplined. stan fisher says he thinks the fed will move three-four times, and the market thinks it will not. there is a bit of cognitive dissonance going on. are they going to start doing something different than the last 10 years? street journal, assets are overpriced and so they will fall, difficult to know if or cause economic lowines, but persistence of interest rates contributes to that risk and the possibility of economic instability. what is the prescription?

raise interest rates more quickly? >> it is about what they are trying to a college. -- two of accomplished. accomplish. as he points out, we got higher assetption, but we pushed prices to the highest levels, and they will not be stable there, the price of oil, stocks -- they look like they have hit an air pocket. what about a 2008-style downturn? forgotten what a recession looks like? >> the fed has pushed the

employment numbers, income looks like it should come through, so maybe this is more like 2000-2 thousand one, a business-investment recession, corporate credit crunch, but not a lot of pain in the housing sector. we could have an investment downturn here. there are different ways. >> i've been showing the odds of recession are creeping higher. it's something that comes up again and again and the research you read. alix: a lot of potential warnings, lehman brothers credit crisis. ways, those that call a bottom? >> it might. i think we might have some turmoil in credit markets. margins might get squeeze, labor costs going up, but it will not

affect two thirds of the economy, which is consumption. the much more worried about corporate sector than the house hold sector. alix: we will stick with that and talk about the energy companies. oilill discuss 30-dollar and why it is not the end of the world. we will find out why. ♪

trump oning up, donald "with all due respect."

let's get to mark crumpton with first word news. >> islamic state claimed responsibility for terrorist attack in indonesia. police say a suicide bomber blew himself up inside a starbucks, than other attackers opened fire, two people dead, five of the attackers, 20 wounded, the worst terror attack in jakarta since 2009. turkey's prime minister says tanks and artillery have attacked isis in retaliation for the bombing in istanbul. he said they targeted extremist positions along side the border, 500 strikes. close one taught him obey has reached a milestone, 10 prisoners from yemen have been released and sent to oman, putting the prison

population below 100 since 2002. new mexico planning to sue the epa in connection with a massive spill that contaminated rivers in three western states. the lawsuit would be a first and also target the state of colorado and the owners of two minds. -- mines. accidentally release contaminated water in august. global news 24 hours a day from the first word desk. back to you. alix: "what'd you miss?" $30 oil is not the end of the world. it could beat normal. between $30 and $35 from 1985-2003.

senior director at the black rock investment institute. everyone freaking out about 30-dollar oil? >> we have not been there in a while. we went through an episode. supply demand matters. we are looking at something that is reflecting monetary conditions, the strength of the dollar, so that chart showed four phases. 1985-2003, the central bank is being pretty disciplined, the war in kuwait, the asian crisis,

$30 to $40 a barrel. is trying to pump up the economy, and look what happens to the price of oil. gears. fed is shifting i don't know where it goes next. a lot of people think it's going back to $80. did the fed cause the volatility we saw from brent near $150 down to $30? >> i think it has a significance in terms of monetary policy. saw what monetary policy did to house prices, this is part of the instability. it's not just financial

instability in the markets. this is where deflation comes from, the deflation we worried about eight years ago came from house prices, now from the energy complex, people get overleveraged, drive asset prices up, the liability is still there, then you get the debt deflation. going up,lk about oil plunging, supply out of russia and the united states and the inability of opec to get its act together -- these are all smokescreens? >> no, they are the consequence the place through. the original definition for the natural rate of interest 100 years ago is the rate of interest which tends neither to increase or decrease the price of commodities. how is that working out for you from 2003 to last year? the u.s. said there's this

new technology, they ability to get oil that was economical before. you think it's more about the availability of capital? >> why do we price oil where it is? i understand the supply-demand dynamic, but the cost of money in the energy patch certainly help that infrastructure is why thosehich energy companies are at risk of going bankrupt, they brought more than expected revenue from oil. alix: we haven't seen those bankruptcies, even though we have not seen the distress, because of cost inflation, so were not getting the bust everyone thought we would be getting. in theink the stress high-yield market is coming from the energy sector. it will depend on whether they ,et to renegotiate their debts

but clearly a lot of energy producers, inventory holders, supply chain people that will have to restructure their debt. 2016et: you guys had a outlook on cycles out of sync. which sectors should investors be focusing on? >> that's what we've been discussing. monetary cycle has pushed asset prices in one direction, but that is a consequence of what the fed was trying to do with employment and the housing sector. they pushed and pushed, so the economic cycle looks well when you talk to the housing sector, but the energy sector says we are in a recession. the investors have a problem focusing on the asset prices, because as marty feldstein said, they have come down the long way. mention the fed targeting asset prices and the danger of folks becoming seen asd, but houses

extremely safe. oil and energy investments have not ever been seen as safe. you think the leverage is not built up as much? >> it is risky to the individual balance sheet. clearly, the u.s. economy is not as leverage to the price of oil as to the price of houses, given two thirds of the economy's consumption is coming from the housing sector. for the individual balance sheet's, it is the same dynamic. scarlet: thank you for joining us today. alix: j.p. morgan kicking off bank earnings season. we will hear what the ceo had to say about the dramatic price drop in oil and gas. ♪

scarlet: goldman sachs reached an agreement to resolve ongoing investigation of its securities earningsroup, reducing by one point $5 billion on and after-tax basis. will be making $875 million in cash payments, the resting consumer relief. "what'd you miss?" j.p. morgan reported fourth-quarter profit up 10%. when asked about oil and gas, the ceo explained the decrease

in cost for energy companies. >> the cost of getting oil out of the ground has dropped more than expected. it take the producing, cash flow, discount at 8% or 9%, so these are our forecasts. our energy book is not that large. we are here with bloomberg markets executive editor, so our bookon is saying is not that bad, costs are coming down. how does lending look to you? >> you will have to compare and contrast with what he says and does. milliongan added $136 in loan loss reserves, the first time they have increased the money set aside to cover bad loans in several years. of reason is because

concerns in the oil and gas sector. about theconcerns amount of commercial lending that banks have undertaken, loss rates have been low for the last couple of years thanks to the easy money. it was easy for banks to continue extending credit. the concern now is that that comes to an end, and some of these losses start to rise. at the end of the day, i that moment when the loans come due, but a lot of the debt was refinanced, pushing the maturity date out a lot. produce oil for 30% less and that will continue to go down, you can make it work. joe: do you think we will all die? run, yes.long in the short-term, you are right. it is about timing.

we have this extend and pretend thing going on. the wildcard factor are the regulators. we've seen them talk about froth in the market, the leverage it lending guidance, if regulators start to get nervous about oil and gas loans, it could come down hard on the banks where they can refinance anymore. c&i loans were a source of strength. >> after the housing bust, residential lending does not look good, so everybody moved to commercial lending. alix: fascinating. thank you so much. intel with earnings after the bell. staci smith,from

cfo, next. ♪

scarlet: claims girl it. let's get the mark crumpton. >> the leading republican presidential candidates will do battle again tonight, only seven of the 12 included in the prime-time debate on the fox business network, the sixth debate of the campaign. mark halperin and john heilemann are hosting. donald trump will be one of their guests. you can see the interview at 5:00 new york time on bloomberg television. france, britain, united states

asking for emergency meeting of the united nations security onncil, wanting the attack syrian towns lifted so people can get humanitarian aid. said a teacher was swept away by an avalanche in police custody, investigation opened for involuntary manslaughter charges. three people killed at the ski resort, to students, and the third was a ukrainian skier. nasa awarded contracts to three companies to hold cargo to the international space station, orbital 80 k, and atrra nobody won the bids -- k, sera nevada won the bids. stated an attack in indonesia happen inside a

starbucks. as far as we know, the attack occurred near a starbucks in jakarta, five attackers and two others killed, 20 injured. i am mark compton -- crumpton. recapt: let's get quick on markets, energy and health care shares leading a rebound, dow climbing to 27 points, the 227est game -- climbing in somethe biggest gain time. stocks are higher for a third time this week. it has not felt like it. joe: it deftly felt -- definitely felt like a bounce after a bad week. higher, thenere sold off, and it looked like another day with the move to

sell the rally, but people bought the dip. still solid. alix: we did see oil up on the day. let me take you inside the bloomberg terminal to show you the thing that investors are scared of. and allooking at iran these oil tankers floating off the coast in the persian gulf. this is the confusing part. mondayd be as soon as when iran is allowed to export oil. how much of this is iranian oil, how much can it be shipped out, what kind of oil is it? something like 45 million barrels of fuel stored in these tankers. what does iran do with it? be: do people expect this to

a story about the price of oil or the spread between wti and brent. parity isink the where we will stay in the near term. joe: we've been talking a lot about government that lately. last night, the japanese 10-year government bond yields hit an all-time low. this trade is called the widow maker, the year the japanese government debt as a unsustainable.is not only is it unsustainable, but it keeps being sustained. the widow maker trade continues. i will stay with asia. as investors unload asian

assets, hong kong feels the pain as well. decline down in the offshore rate. it is just off a five-year low. whenever there is a scare, it's only a matter of time before someone says lee hong kong p eg is under threat. -- the hong kong peg is under threat. this chart probably exaggerates it. joe: can you blow that out to the five year? scarlet: i don't know if it would change anything. there we go. joe: that's great. that shows how little move there is. is for the five-year.

it's not that they governor deal -- it is not011, that big of a deal compared to 2011. are somewhere in the neighborhood of 9.5%. johnson is ready to interview the cfo of intel. cory: i'm ready. , the biggest quarter you have ever had. i'm sure you will happily take that. >> it was a strong finish to the year. you can really see the transformation of the company. we all set the weakness in the

pc market, the strong growth in data center, memory, and the internet of things. >> i was shocked of the pc number was not worse. 2%.guys were down less than do what you attribute that to? >> it is a mix. we saw the same unit weakness that third parties are reporting, but what we saw is that because of the compelling technology we are bringing to the marketplace, we had record , those pockets of the market were strong. i'm sure a lot of questions you will field on the conference call about gross margins. good.urth quarter, pretty the believe is that as you move

center dependency, there would be growth in gross margins. that isexplain what about, more pcs in your future or data center not taking off or so merger maybe not going well in the first couple of quarters? >> none of the above. 64 percent gross margin is a great gross margin. our projection for next year is 63%. it is a strong projection. to be clear, that takes out some accounting charges from the acquisition. i'm giving you an operational view of gross margins. down just a bit from what

we are seeing in q4, and that is the result of start up cost on our next generation processor technology. we continue to drive it. but the underlying business is very healthy. terralk about how all will work? could it get as high as 15%? where itare two places will impact us over the next year or two. as we bring their products into our factories, we will make those products much better. ga products really benefit. we will improve performance over time, taking share. the more interesting piece of it is that we will be able to take

blocks and integrate them into our products and create products that are you -- that are unique. flexibility to our customer base and allows them to improve performance for workflow it's -- workloads and reduce cost. you will see that at the end of 2016, and a cadence as we integrate more and more and move past that point. >> that will be interesting to watch that happened. it will be great to see that roll out. thank you very much. hief financial officer of intel. scarlet: coming up, el niño is over. the new weather pattern that is bringing havoc. ♪

scarlet: it is time for the bloomberg business flash. goldman sachs says it has agreed to settle a probe into its handling of mortgage backed securities, totaling more than $5 billion in fines and byctions, reducing profit $1.5 billion. alix: the first liquefied natural gas cargo in louisiana, early february, late march. recentlyny citing discovered instrumentation issues that will take a few weeks to fix. down, thetepping company looks to restart growth, becoming executive chairman of

foursquare. he will be replaced by the coo. that is your bloomberg business flash. alix: "what'd you miss?" years is el niño in 20 done, called record temperatures are on their way. how big will that impact be. the chart we showed showed subsurface temperatures versus normal have been going down. what does that tell us? in the el niño, but it is gradually weakening. we measure surface temperatures, they give you an indication of how quickly it is breaking down. in the next month or two, and easing of impact. the sea surface

temperature anomaly is beginning to roll over a little bit. tail end of it and it will make a little resurgence? expect to see influence through the end of winter on the east coast. milde looking at some temperatures, not as mild as december, but maybe upper 40's. joe: natural gas can't catch a break. >> we thought there was a chance that the in and of the winter there would be a surge of cold weather to spike prices. we got a short covering rally that was significant, from 160 to 240. of january, more mild

weather coming. alix: the question is what does it mean next year? an interesting chart that showed there has been nine el niño events, and eight of them la nina.by thatere is the potential na,, but move to a la ni we can't say for sure. the main signals are for la ni na, and there still could be mild temperatures. scarlet: at what point do we determine whether there will be a la nina? summer, youin the

begin to see which stage you are setting yourself up for. where we go from there is still unclear. in the next few months, april or may will -- we will have an idea. a,arlet: when you see la nin what are the commodities to watch? >> you have a fight between cold air and warm air which can create volatility. the east and southeast are warmer, but the midwest can have significant cold snaps. not did you say that it is inconceivable that we could have another el niño year next year? >> the bad news there would be the el niño would not be as strong. to see the influence we are seeing, it has to hijack the pattern. to her, it would not be that

strong and they're would be colder weather in the east. year, it would not be that strong and there would be colder weather in the east. alix: we will hear from how reforms will bring economy and investment back to italy next. ♪

joe: i am joe weisenthal. "what'd you miss?" italy's industrial output

fell in november, concerns recovery may be losing steam. to sit down chance with the company's economic minister for development. joe: i asked about reform and labor laws and how it is affecting investment in italy. seeing good results in terms of unemployment shrinking, new contracts coming, both from it tight entrepreneurs, companies, and foreign companies. terms of you look in the further path of reform, what are more areas? >> the most important thing is the governance. without a strong government, you cannot have an efficient country

and able to attract investment. reform that matters the most is the reform of the constitution, the senate, the federal system, which was a major mistake. much more bureaucracy, confusion, and complexity. these have already passed both chambers. now we need another referendum. joe: something we see across they go through reform and lose political capital, too much backlash from constituencies, killing the momentum, why would you argue that will not happen in italy? , 1.6 have growth this year gdp growth this year, less peopleyment, and why should not?

joe: is it easier to do reform when the ecb is engaging expansionary monetary policy that cushions economic pain? have not forget that we legit constraints coming from europe, and we want to respect the treaty we have designed to remain within the budget limits, and of course working on the debt. joe: in this post-crisis era, europe has been criticized for tight fiscal policy. do you think there is room in italy and elsewhere to loosen budget restrictions? >> you have to work on two sides. you have to cut excess and cut expenses. these go in parallel. joe: what else is the government

doing to draw foreign investment? streamlining the process is of attracting and bringing investors to italy. that is why i am here. we have a brand-new structure, a new process, we want to be able opportunities for investment to investors. most difficult things in italy is that you have to deal with medium-sized companies . although the upside is significant, it is difficult to engage. joe: you are talking to international investors. what is their main anxiety about investing in italy? about thee concerned length of the process, and it is something that we have already faced and made some good decree,

and we know this is a priority. italy's deputy minister for economic development. scarlet: what you need to know for tomorrow's trading day is next. ♪

scarlet: i am scarlet fu. don't miss this. wells fargo, citigroup reporting

earnings tomorrow. the cfo at 4:00 p.m. eastern time. alix: industrial production coming out at 9:15 a.m. this could make last year the worst year since 2009 for industrial production. joe: i'm looking at retail sales tomorrow and the university of michigan consumer sentiment at 10:00 a.m. we all hope the u.s. consumer can hold up the economy. there is growing anxiety about it. we talked about how economists are more concerned about a recession than anytime time in the last three years. morning, we got that bloomberg consumer comfort number, the highest in three months, so some good signs happening. we will be diving deep into those retail sales numbers. and how quickly that might umichct the oil price, the

sentiment tomorrow. scarlet: coming up next, "with all due respect" live from charleston, south carolina. alix: that is all for "what' 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! save $1100 on the i8 mattress with purchase of sleepiq technology and flexfit3 adjustable base. ends monday. know better sleep with sleep number.

the debates. on >> first of all, rand paul should not be on this stage. you started over here, jeb. you are moving further and further. pretty soon, you will be on the end. if you don't like it, i'm sorry. john: happy return of code the toe day, sports fans. y, sports fans. the main event, trump versus