from bloomberg world headquarters in new york, good afternoon. here's what we are watching -- u.s. shares rallying, lifting global equities from the brink of a bear market thanks to support from the ecb and chinese government. draghi hinting at more action as the global economy escalates. what does that mean for the said? and an exclusive number station with george soros. francine lacqua will be speaking with him later this hour. first, let's had to the markets desk for the latest. are in the green but sliding off of our session highs. take a look at these numbers. the s&p 500 was up by as much as 1.6%. by can see we are still up

1.1% and the nasdaq is up by as much as 1.5%. bloomberggo into the terminal and show what happening on the s&p and look at the sectors here -- nine of the 10 sectors are in the green. we have seen all 10 in the green but we are coming off of that with utility down by about .3%. energy has been the biggest leader and is up by 3.1%. interestingly, 13 of the top 14 stocks are in energy or oil. southwestern energy is up by about 15%. david: i can't tell you how different this seems with energy falling and going to a five day low. energy goes, so does

most of the market. we have to look at crude right now -- off session highs but this is a healthy jump, up by nearly 5%. we did across the $30 mark a couple of times we are below that on the $29 handle. this has been its biggest jump since february of 2009. let's look at energy companies that have the biggest weight on the s&p. chevron, schlumberger up by 1.5 or 2.5%. mario draghi's comments did make an impact on the euro. it had tumbled to a two-week low but you can see we have come back to basically the flat line. much. thank you very let's check on the bloomberg

first word news with mark crumpton at the news desk. mark: u.s. secretary of state john kerry says opposing size will not meet face-to-face initially in planned syrian peace talks in geneva. the first meeting is being referred to now as toxicity talks where representatives of the government and opposition will gather separately. negotiations were scheduled to take place on monday but diplomats say that could slip by a few days. somali police say a suicide car bomber renegades of a restaurant in mogadishu and gunmen fought their way into the building. it is not clear if there were any casualties. the attack may have taken place inside a restaurant known as lido seafood. there is no claim of responsibility for the attack which were the hallmarks of al-shabaab. the obama administration is using new visa requirements for certain european travelers who have visited iran, iraq, syria

or sudan in the last five years. the announcement by the homeland security and state department comes as the state department puts new limits on who can use the visa free travel program. that was intended to block europeans who fought for islamic state from entering the u.s. two detainees were released from guantanamo today, third refused to board the flight out. the two who left include an ejection with severe health problems who went to bosnia and a yemeni who went to montenegro. it is unclear why the third person did not board the plane. may ruffalo may board -- boycott the oscars. will smith says he will join his wife and not attend the ceremony. he is the biggest name to boycott after the nominations

included all white nominees. global news 24 hours a day from the bloomberg first word desk, i'm mark crumpton. david: i was watching the euro this morning and it was little changed and then along came mario draghi. he sent the currency into a tales and after setting the euro the third time this year. environment,n this euro area inflation dynamics continued to be weaker than expected. it would therefore be necessary to review and possibly reconsider our monetary policy our next meeting in early march. david: the chairman and ceo of pulpit,ated he uses the yellen next. the chief economist

at bloomberg intelligence. taking intowith account the downside risks which he say have increased again. you have to think janet yellen is watching this unfold in a similar way. with ayes, but significantly different outcome. europe is an exporting powerhouse, their stock prices are now down 10% year to date. it's not an a grade environment and it's certainly not a rosy economic outlook. the fed meeting is looking at a similar growth dynamic but the is headedh product toward u.s. growth. it should be less of a concern for the u.s. than it would be for europe, but the markets have not treated it that way.

yellen is certainly not going to be as bearish on the outlook. bey could potentially hinting at increases the on the four they hinted at in december but i don't think they will talk about moving in the opposite direction. the only easing you will see may be hinting at a slower pace. here athe. plot looking my bloomberg terminal, seeing the probability of a rate hike is 0%. carl: that has been oscillating between september and november, so the markets have taken that a step further. david: we have not heard a lot from fed governors. it has been silence around this and when they meet, there will be no press conference to follow that. a press setting

meeting. it is not a forecasting meeting, so that will not be part of the story. i don't think we get a whole lot from the fed that they could hint at downside risks which would delay expectations and push march off the table. david: as janet yellen sits there with her toolkit, looking at what is going on, is she worried about the same thing mario draghi is worried about? is she worried about a lot of the same things? carl: she has been cautious on the economic outlook, so there has been some similarity there. the u.s. is much more dependent on the export sector and that factor goes back to germany. in the u.s., exports are only 12% of gdp. slows, the u.s.

can continue to forge a forward pass. certainlyst one, but at her prospects than europe. david: we talked about the size of the fed us balance sheet and fromard from bill dudley the new york fed. no timeout -- note sign this is going to be turning anytime soon. see the fed't winding back they balance sheet until we get to 1% on the fed funds rate. if they are pulling back on those hikes this year, that is a discussion we will be having next year at this time. david: thank you very much. coming up in the next 20 minutes of bloomberg market, making sense of the break that -- breakneck volatility in the market this year. and don't miss an exclusive andrview with george soros his view on the world economy in

the recent market turmoil. ♪

david: welcome back to bloomberg markets. time now for the bloomberg business flash. railway iscific going to eliminate 1000 jobs and/spending by $279 million this year. they are adjusting to lower shipping volume and falling commodity prices. most cuts will result from attrition and will kick in midyear. for theas an order

smallest jetliners. the new boeing 737 700 planes will enter service in mid-2017 as united cuts its use of cramped regional jets. starting a global equities hedge fund according to a person familiar with the matter. the firm will launch the fund month. that is the bloomberg business flash. some movers focused on the twitter sphere right now. ramy: on social media, some of , the bloomberg social velocity monitor if you are playing along at home. the first stock i want to look at is netflix, down by about or .8% from a report netflix could guide as low as $45.

$100 here andove says the online subscription service is burning through its cash pile and a high valuation we see is unwarranted. the s&p's top performer on the s&p rallying, but today it is down. stock along to another ticker, fitbit is now up by 1% after raymond james upgraded the stock to outperform. but the is number one fundamentals remain strong but cutting its price target to $35, theng risk aversion to name. fairly some people do not care for fitbit.

another company to take a look at is avon, off of its session highs. up there by about 10% or so. the cosmetics company announced $350 million from its budget and so on the flipside that oversees, it actually turned a profit which was a little bit of a surprise. it says it made a profit and if the effect of the strong dollars taking out of account, that it reversed it to a 19% drop. it did say the stock rose on hope the sales might be seeing a bottom. thank you very much. i want to note here that looking at the major market indexes, the nasdaq down about .1% for the second time today. the debate over finance regulation is a hot topic at dominoes, contracting to the

current market volatility. eric sector -- erik schatzker put that question to the manager of the international fund. guest: there are a variety of markets where we see too little liquidity. i think regulators and policymakers are open to making adjustments. do you attribute some of the volatility now to this evaporation of liquidity? guest: certainly, market structures have changed, but i think they have changed such that we have greater volatility. some of this was by design. what is the worst of the unintended consequences? guest: the repo market is looking dicey. we are just trying to understand the causes and what may be potential solutions. erik: i have heard, and it

surprised me, frankly, one banker talked about setting up a shadow bank alongside the regulated entities. is that going to happen? guest: it is certainly an innovation. but i think it's going to come under some regulatory scrutiny. i think they are very different animals, but we are hearing more rhetoric about shifting regulatory focus to market-based financiers. promiset they see some -- are your constituent talking about it? some of them are using it for lending and we see that in europe. it's filling an important void that has existed in a post crisis era. erik: what regulations still lie ahead? guest: there are still a few things on the banking jet and

the -- banking agenda. i think revisiting liquidity and what does that mean? you will see the official sector move toward insurance and other market aced financiers. erik: are you preparing for basel 4 yet? the benefits are for five years and i think they want to bring it to a close and so do we. there are some big issues like what do you do about risk-weighted assets? how much capital do you apply? these are big issues to be decided in 2016. 3ik: if we could say basel and theotball game financial services industry was able to push back, if you had to tally up the final score, what is it? regulators what and financiers what? guest: many of these exchanges

were necessary. of what was done was important advancements. the question is the marginal benefit of what we are seeing and does it help make the system safer? i think the sector is divided. we are hearing out of the u.k. that enough is enough but the u.s. haven't gotten there yet. so here is the question that -- now that these institutions are living in the new regulatory regime, is it still a case of shut up and yourr or do you find institution and constituents recovering the power you once had with governments? our association and member firms want a working relationship with us. how visible that is remains to be seen.

they won't understand the impact they are having on market structure. erik: are you in a position to push back harder now? guest: on the liquidity issue, we've done a tremendous amount of work. regulators and policymakers want to hear from us, so we are in a unique position. tok: short of allowing banks tilde balance sheets again, howdy d store up liquidity? guest: the key is to look at various measures versus the leverage ratio. are there some combination of factors making the situation worse? when need to sort through the various impacts. was tim adams with erik schatzker. still ahead, stocks in the u.s. have alternated up and down and we will try to make sense of all of that volatility as we head to the break. lednasdaq down about .1%, lower by stocks like netflix.

the s&p 500 also up about .3%. ♪

david: welcome back to bloomberg markets. for the past six sessions, stocks have alternated up and down days with an average swing of 2.7%, almost triple of what we saw last year. these situations are the wildest 2011. but the question is why? we will answer that by trying to talk to our stock reporter. the question we have here is looking for some reasoning behind this. it is difficult and a lot of people are saying we are tracking with oil. at theup and we are up same time, it is extremely volatile. you have days like yesterday where we are down with a lot of

volume in and started slow climb up. there's deftly a sense of frustration with how to we judge what's going on when we have these wild swings. david: so much of this is sentiment-based. dani: a lot of people said it was the market technicians day. we had a lot of volume on the downside and lighter coming up. historically, that happened in october of 2014 and led to an oversold condition and then you saw a bounce like today. to,'s what people will turn saying a lot of it is computer-driven strategies dominating the market. yourother days it is emotion and everyone is concerned about oil or china. david: you bring up history and that is important because we lose sight of that. that are those who say we've been through this before and you have to be patient. difficult because

your gut reaction when you see the selloff is you want to panic. it's difficult to step back and say i've seen it before and it is history, especially when you have clients calling you every day saying is my money ok? we have seen it in the hedge fund space with a lot of outflows coming, so it is a careful balance of walking clients through the turmoil and reminding them there is history and acknowledging that there is some concern here. david: what do the strategist you talk to say about that? maybe some self-doubt about the strategies you have taken? david: one of the most interesting ones his momentum. omentum strategies gained about 32% and were the best strategy of the year. when you look now, one of the momentum stocks etf's, only five

have gained this year. was a very popular strategy last year and now it is going to be called into question. david: as you note in your piece, this is about the recovery. dani: people i talk to this morning who were feeling not so great about the market were pleasantly surprised about the turnaround yesterday. maybe we areking finally trading on good fundamentals. david: thank you so much. coming up, our exclusive and are you with george soros on the global economy. ♪

david: from bloomberg world headquarters in new york, the this is bloomberg markets. you're looking at live actor -- live pictures from douglas, switzerland.

george soros has been outspoken, speaking about the refugee crisis and we had a wide -- we have a wide-ranging conversation in just a few minutes. mark crumpton has more now from our news desk. somali police a suicide car bomber ran the gates of a restaurant near a beach in the capital of mogadishu. then gunmen fought their way into the building. early reports indicate three people have been killed. the attackers made have taken some hostages inside the restaurant. no immediate claim of responsibility for the attack which bore the hallmark of the islamic extremist group al-shabaab. is u.n.'s world food program making a plea to end the violence in syria saying 400,000 people in the country remain isolated in 15 besieged areas. the agency says it is supporting 4 million people inside the outside it 2 million

with food assistance, but millions more need help. live -- arejecting a london judge report that says vladimir putin probably approve the murder of a former spy. the judge found he was murdered by two government agents a decade ago and says those agents were working on orders that were probably approved by president putin. he was poisoned with radioactive tea. one of the alleged killers calls the report absurd. as the new hampshire primary nears, john kasich is rising in the polls. he is second and five front-state -- behind runner donald trump. in three of them, he is tied with ted cruz, marco rubio and jeb bush. news 24 hours a day from the bloomberg first world desk, i'm mark crumpton. commodities markets

closing in new york. let's look at copper. copper leading industrial metals , prices closing at $198 a pound. gold futures fell from the highest in more than a week. the dollar eroding the up peel of the precious metal. lowest close its in more than 12 years as investors tried to pick up on them after government inventory data. crude is down about 20% this year. are joined oil, we by a commodity research analyst who joins us from princeton. let's start with the ecb commentary and mario draghi speaking at a press, and. what effect did he have on the market today? getting any type of clarity on the central banks stepping in and taking proactive measures and propping up the

economy, i think that's what you saw with the oil inventory report. a positive it as sign to trade higher. things do not go down in a straight line, so we are getting relief buying today. what -- was this a better report that many estimated it would be? andrew: it was roughly in line with expectations. we still build over 4 million barrels, so you have large andds on the product side inventories well above the five-year average. they have doubled over the last 10 or 12 months, so there's a .ot of supply in the market we are going to build inventories, so it's going to take a long time to work up the clot -- to work off the glad we have built off -- we have built

up. we don't really know the oil willnt the glut in affect the market. have we learned anything in the last five or six days? andrew: nothing to incremental. we are nearing the date and people are getting afraid they are going to come to the market with some sort of certainty. the supply is relatively unchanged from what it was in july and everybody thinks markets are efficient but it continues to trade down as we draw closer to the date. barrels get iranian coming down but you get an offset from nano tech supplies. there's the balancing factor to think about as you move closer to the middle part of 2016. david: you bring up opec and i know venezuela is calling on that body to meet.

what is the likelihood that's going to happen and how is that playing out between saudi arabia and the rest of the opec countries? andrew: the countries that are higher on the curve want some action to be taken, but saudi arabia's strategy of keeping production high, trying to force the u.s. rig count lower, anyone who is saying their strategy is not working -- it is obviously working. andwells are getting bigger ip rates have gone up. moretions are getting efficient but as we get to the backend of 2016, production will roll much more in 2017 than it does this year. david: thank you very much. china may be the elephant in the room in dominoes, but one central banker says he worries about china are overblown.

one analyst sought to calm the fears. he says markets will stabilize soon. guest: the markets have reached a level where people are asking when does a correction comment on what basis? i think china is a trigger and oil prices are a trigger. but prices are trying to find an appropriate level. you did have some volatility and a lot of people have been telling us to expect volatility. the question is at what level does it settled? the news coming out from china has not changed significantly. there were certain changes in the room and be fix, but this is not about deliberately depreciating the run and me but adjusting to the new basket and one should take them at value. issue.ces is another

the level players that are exposed and what happens to the countries that are exposed? we know countries like venezuela have problems, but what about countries elsewhere? trigger toy are a high level of asset prices which are trying to find a new level. can i ask about china? what kind of numbers do you expect china to grow and mark what is the sort of number you are looking at? do you focus on the efficient numbers or the various indices people are putting together? my sense is that there is underlying growth in china. it is not falling off a cliff. would -- the real question is what does it imply for the various commodity markets?

quantity ofthe growth, there's a lot of growth coming from china in terms of dollars. percentages are following naturallynd that is to be expected from an economy growing richer and therefore is going to slow. i'm not worried about chinese growth. how does it interplay with leverage? >> this is what the markets are putting their bets on and it has a direct impact on your day job. chinese move to a basket is understandable because the dollar is trending that the yen and euro are weakening. clearly some of the actions that have been taken have effects elsewhere. movehould see the chinese toward a basket as being

unrelated. magical and i did a panel and at a time in the heart of the financial crisis, we saw a fault line. you were roundly criticized by many including larry summers. he is out now with secular stagnation and a mandate to say we need to maintain confidence. how do developing countries maintain confidence to assist growing markets? guest: growth would be good. we would love the industrial countries to grow faster. the question is how can we make that happen? certainly monetary stimulus has run its course. .xit is an issue once you are in this situation, how do you get out of it without an abrupt change in asset prices?

broadly speaking, the answer has to lie in looking at the underpinnings of growth and the structural reforms we all know and love but cannot actually do. we need to figure out how to make that happen. david: that was the reserve bank of india had banker. speak with thell biggest names in floating -- influencing global markets including tom farley and the chairman of cisco and the prime minister of norway. interviews with larry fink and the columbia university president, lee bullinger. we are looking ahead to an exclusive conversation with george soros coming up on bloomberg television. ♪

bloombergcome back to markets. looking at the world economic forum in davos, switzerland. filledose chairs will be by francine lacqua and george soros. that will be an exclusive interview in just a couple of moments. stocks trying to bounce back after plunging more than 1% yesterday. their highsis off right now. the energy sector keeping the market afloat. markett is keeping the afloat but oil is not as high as it was earlier. point --by about four it's1% but we see basically fading and trailing off right here. we did see in the noon hour or

so that this caused -- this crossed the $30 threshold about nine times in 30 minutes. we are now at the $29 handle. let's look at the energy select etf. the day is mirroring what's happening with wti crude, up by 3.3%. 34 stocks are up and just six are down. is up and ranged resources up. as for some oil companies that have the biggest weight on the s&p, this is where they are standing right now. not one of the biggest as far as weights go but still the biggest percentage. definitely one of the biggest

weights, up by nearly 5%. speaking have been with global leaders and investors who gathered at the world economic forum in all those, switzerland. now the spotlight is on george soros who is set to deliver his latest market moving comments just moments from now. as we await those comments, i want to bring in the executive editor for bloomberg economics. somebody investors really want can onlyrom, you imagine what draghi's comments are going to do to the market. forcefuley were very but it is as close to it as a central banker is going to get. david: francine lacqua is now sitting down with george soros for her exclusive interview. i haven't talked to anybody, so i really can't say. we will find out from the reaction of the audience.

we have looked at certain points together over the past year and one thing that has struck me in the many years we have talked to you is your sense of justice. friendshipok at your with him, you have not seen eye to eye with him. pleasedr, you are quite by the fact he was talking about some kind of marshall plan. frankly, i read about it half an hour before coming here and i was done. happened but i only found out half an hour ago for i meant supporter of this idea because the european union is in the next essential crisis. it needs to get out of that because of the migration problem.

the european union is falling time whenthat's the you need to tools to have a major initiative. a marshall plan. it is absolutely appropriate and it is amazing that it comes from proponents of the bundesbank orthodoxy. favor of it all along. planl propose the marshall for eastern europe more than 25 years ago. i 1989, and pots them when

said this should be a marshall plan before eastern europe, including russia and it should be financed by the europeans for a change. led by thatcher's representative who started laughing. my proposal was greeted with amusement. this proposal should not be treated with mild amusement. it should be taken very seriously. it is going to have a very difficult time passing because there is a lot of dissension now. it's part of the disintegration. these public into zs deck

support -- i think most people know something has gone terribly wrong and it has to be put right. our investors underestimating the risks the european union is facing? is there a danger of rake up? last year, we were worried about greece. what should we worry about this year? george: greece is still a problem. it's the one problem that has no solution because it has been so messed up that you can only muddle along. there is no solution and the problem is now coming to the boiling point again. but it's not a major problem in the scheme of things.

but compared to the other issues, it is not that significant. we had mario draghi today saying he is ready to act and has promised more. how much will that help? i think the markets misunderstood what happened at the previous meeting. the markets sold off and that was a mistake. markets expected action and thought there was no action coming. drug he basically did not want to act -- draghi did not want to act without german support or stronger evidence of deflation. it on het want to push had one or both of those conditions.

confirm he has it and they will act unanimously in march. i was going to predict it it stole my line. we did not coordinate right. francine: two weeks ago, you should -- you said we should be more careful because there's a risk of repeating what happened in 2008. george: 2008, we are repeating it. it was a time of financial crisis and the bear market. you have the same condition but the source of this equilibrium is different. in 2008, the root cause was the subprime crisis in america. now, the root causes basically china.

so it is not comparable. growthe: china because is much below what we think or because they are importing deflation? deflation and over indebtedness of the chinese economy. is 300%l social that 350 if you take into account the external. it is serious. the chinese left it too long to address the changeover in the growth model they have to adopt from.

a hard landing is practically unavoidable. you are looking at a financial crisis that would start in china when authorities couldn't deal with it? the key issue is deflation. it is a condition we are not used to. none of us have lived in a deflationary environment. the last time we had that was in the 1930's. i was around, i was not yet engaged in the markets. we just don't know how to handle it. it is a different environment. but now, we have to face it. on china, do you

expect a hard landing? george: it has happened. it, i'm justting observing it. it.china can manage and greaterrces in choosing policies than most other countries, with 3 trillion of reserves and so on. however, we are in for their problem, passing it on to the rest of the world. it even if they don't get the transition right.

they can certainly continue for two or three years on the wrong course. the effect on the rest of the world, and that is mainly deflation. deflation.sources of you have a sickly three major root causes. china. the other is oil and material prices and the third is competitive devaluation. francine: how difficult is it for central banks to fight deflation? is there any ammunition left? george: it is difficult because whether you have -20 basis points or -30 basis points, it is not going to stimulate the

economy. quantitative easing has worked. theas saved the world from deflation and the great depression. that's the lesson we learned from the 1930's. ben bernanke learned it. he knew it, and when he realized he underestimated the magnitude of the problem, he used his engaged in a he two-pronged maneuver, which is of theu lose control car, you have to turn the wheel in the direction in which the skit is taking you. when he regain control, then you correct direction. the first step was to flood the markets with money.

and a down turn maneuver the fed being the pioneer was reach where ito wanted to correct with the second curve. it reached at last year and started talking about it, but they did not have -- did not act. by the time they acted, the window of opportunity closed, so they acted one year too late. the u.s. economy is already slowing down and that is because of deflation. apparent whenme the benefit you had

of lower prices which gave you effectively a tax cut, but instead of spending the extra to improve their own finances. we could find the same goods cheaper year. thecine: so they fed at moment is telling us for rate hikes is year and the markets believe to rate hikes, do you think janet yellen will have to reverse and cut rates? george: i would be very if you had an increase in rates. effectively, they were aiming at getting up to 3%. morewould have given them

haveition to ease when you downward pressure, but they can't get there. if she does cut, if the fed has cut to reverse that rate hike, what does that do to her credibility? george: a mistake has happened and if you have to correct it, it is the right thing and not to stick to it. could happen at they cut it, but that won't be much of a stimulus. quantitative easing works, but it has diminishing return. francine: how does quantitative easing work if deflation has to do with oil prices? it is quite difficult and this environment.

mario draghi has been trying to get inflation up but it has not quite work. we have to look at the oil price and look at the pressures of deflation. george: you cannot look through it. it is right there. draghi is going to he now has apparently the support of the bundesbank and he has the evidence of the slowdown, so he will do it. how would you play the market in this kind of environment? what do you buy? george: i am no longer in the market. i don't know the details. i have become the hedgehog