Ugly start for the bills. Dashboards. Larrynie think about summers and carl who said dont raise rates. Larry fink said we are facing 2 growth. The Circuit Breakers might be telling us we are falling out of bed and we could be in for a rough ride. David its not all about the Center Central bank. I would not be concerned about the a chinese economy based on a shanghai move. Stephanie its a new year and new markets and stocks around the world are slumping but they are being led by this route in chinese equities. It triggered a market wipeout. Yielding currencies tumbled as investors are turning away from risk over concerns about the middle east. , letsrabia and iran cover this with our Bloomberg Global team. As wellve to hong kong as mark barton in london and matt miller is here breaking down the markets in new york. We will go through this with everyone. Lets get you some first word news. Vonnie the refugee crisis is orking western europes policy. Danish leaders were angered by swedens decision to start imposing its own border checks to stem the flow of middle eastern refugees. That could lead to a logjam over refugees in denmark. An Antigovernment Groups as a plans to stay at a federal wildlife refuge in oregon. Members of the group have taken over unoccupied buildings and protesting present senses given to two local ranchers. Police are staying away so far. President obama plans to carry out his promise to try to restrain gun violence. Attorneywith the general to discuss potential executive action. The president will hold a town hall meeting thursday on guns. Take a look at china, the worst start twoyear ever. We will have more throughout the day. You can see the China Shanghai complexes down 20 . They shut the market for the rest of the day after the first warning. In europe, i want to highlight the dax. Its down 4. 3 . Its continuing to decline. Mark barton will join us in a moment to show you the rest of whats going on in europe. Look at futures at home. We have the worst days since august and futures. Down and thes are dow jones, 312 points. Crushed to kick off 2016. We were down for 2015 as well, slightly less than 1 , but a loss for equities in 2015 print its looking bad for the start of this year. Crude oil is has been showing some games. There was a yearly loss. Down 52 ,ck years, the biggest slump ever in two years. We have a new system for bloomberg users. G btvn type emergingmarket stocks are in blue are in white any oil is in blue and the correlation is about 05 or. 6. This is a look over the last six months. Emerging markets are coming down as well. We are going to go around the world with bloomberg reported today and start in asia. Tell us about china. Morning, its as sad a start as china could of corporate on one side, there is the macro angle, the weak manufacturing date to over the weekend adding to fears. We are not seeing any real turnaround on the manufacturing side of things yet from china but was not a major surprise. Some say the bigger reason behind the selloff today were technical factors. Are anticipating a lifting of a ban on major shareholders from selling their holdings sometime this week or in coming weeks. When china had their 5 trillion market rout last summer, the group intervened and one measure was to put a ban on big shareholders from selling. That ban is expected to be lifted soon. Selloffreason for the was the considerable support for stocks during september. While this reflects the macro side of things, the week manufacturing data is also linked to technical factors. Stephanie what about the technical impact of testing new Circuit Breakers . When we see that happens, Market Participants will sell into it to see how its working. They dont trust the system. Thats exactly right. Today thatfeeling the Circuit Breaker exacerbated the selling pressure in the chinese market. Is the first time we have seen this in use. This is what they introduced in response to the big selloff last summer. They went around the market and what they came up with was a Circuit Breaker where if they lose 5 of more, they will shut down the market for 15 minutes and let things calmed down and resume trading. The problem is come up the rest for the exit doors and no one wants to hold losses. When trading resumed, the selling continued. There is a view amongst people that perhaps china has set the threshold to narrow. Stephanie thank you for joining us from hong kong. You dont seem fazed by this. If you think about last year, were up on china. Could 2016 be the year the house of cards in china fold . The xp market does not need a reason to be down. You saw that yesterday he saw that last year. Throughout 215, manufacturing was ugly and services are ok. Last year, suspended ipos, they banned the selling to some of the big funds. If that comes back in, the technical move will be more important. David there are no big surprises here. The underlying they do is not surprising on the downside. When they imposed the ban on the selling, we knew there would be a day of reckoning after six months. What happens next . Thingost important over the weekend was data. Manufacturing was ugly and services are good and what will drive policy . Stephanie even if youre not getting new news, the news that is a potential reality, this could be the year. , and thedp in china u. S. Is 400 . And the u. S. Per capita income is 48,000 per year and in china, its six point 5,000 in productivity is not going up. The result is you will have a problem like japan in 1990. I dont see that. Pboc has more capacity to do more. Its similar to what the fed can do. The fed put off something much worse. I dont think youll get a signal from the shanghai composite being down 7 for those to invest in america. Whats happening in european markets . Happy new year. Getting hammered. For whatever reason, look at the figures. X is down by 4. 2 and its indiscriminate. Its every industry on the stoxx 600 are sinking. Basic materials is down by 3. 4 . Glenn core is down by 7 . Sector last year fell by 35 because of worries about china. Rising stocks today are on the stoxx 600 which had its worst december since 2002 but for the year, outperformed the country world index. Money is moving into the euro today. It seems to be a safe haven currency. The flight to safety is pushing investors into the european bond market. Look at the yields. You,e i hand it back to strategies in europe remain bullish on european stocks. They are forecasting a 13 rise for the euro stoxx 50. They are cheap compared to the u. S. Peers. There is three letters that b which stands for the European Central bank. Investors are choosing to ignore todays decline in our bullish for 2016. Been ignoringve those recommendations for about a month now and you had a bad december over there. We hear the same thing on the side of the atlantic the european equities are the place to be and yet they are not buying even though they are cheap. Was it got it, take for them to start buying . Money is flooding into these funds. Bank of america said 30 out of the less 32 months, they have gotten money in their european funds. They are not buying today but lets see what happens tomorrow and the next day. Dont forget the earnings. Last year, europe and were forecast to grow 10 . Is there going to be growth in the u. S. Stock market . Growngs are expected to percent this year, 4 next year as well. Look at todays manufacturing data rising to the highest level in 20 months. What stood out is for the First Time Since april, 2014, manufacturing expanded in every nation surveyed by the markets. Today is gloomy but the backdrop strategists are telling us to buy european stocks. Thank you very much. There is a difference between fundamentals. What are we talking about . Stephanie we were talking about european equities as a positive. This could be a trade opportunity. Were talkingwe about the fundamental economy in china but thats not what we refer to as opportunity in europe. We are talking about both. You are seeing a pickup in the data. You saw it in the pmi this morning. Pain on theve periphery. The long call on european sweden and spain. Its not all about the dax. Stephanie how about saudi arabia . Arabia is cutting ties with iran a day after its embassy in tehran was attacked. We go live to do by with more. Dubai with more. Is this the straw that broke the camels back . What happens next . As you said, they are fighting property wars. These these are active proxy wars. Saudi jets and troops are on the ground in yemen. I think this is the straw that broke the camels back for the saudis. In iran, there are two sides to it. Whoe is the Supreme Leader has come out and made some very strong comments, talking about the blind hand of revenge for the execution of this cleric whereas the president was softer in his town where he condemned the sacking of the Saudi Embassy in tehran. I think that shows the competing interests inside iran with a rainy and president not looking for confrontation six weeks before an election where he is up against the hardliners. What else the saudis will do. They are already fighting wars and supporting opposing forces across the middle east. For the moment, i think this is it. And said donut off may have followed suit so there is a domino effect a little bit. Stephanie is saudi arabia is saudiissue or arabia facing revolution . Could they on their own face a revolution . Isi think saudi arabia concerned about unrest in saudi arabia especially in the Eastern Region where there is a shiite minority. Why when the arab spring happened, the saudi government put a lot of money into housing and creating projects and investing in infrastructure. Because of the drop in oil prices now, they have started ramping back a bit and cut subsidies. Announced gradual reduction in fuel subsidies and electricity. Step back. O one of their concerns is that the social contract that the saudi ruling family is in control but they take care of the population, yes, im sure they are concerned this could lead to unrest in saudi arabia. David thank you so much. You have something about the risk . Matt i want to show these risk scores put together by the Economist Intelligence unit. On top, you see iran which is a risk country politically, economically and historically but that risk is coming down. Its getting safer and safer. Saudi arabia on the bottom in blue and you can see this chart on your terminal, they will get riskier and riskier. If a hell of a lot of issues going on with more turmoil. Iran is the one who reacted by saying they should not have invaded your embassy. They had the police go in there and arrest those people. Saudi arabia reacted by a closing the Iranian Embassy in their country. Royals reversing your little bit stephanie saudi arabia as a country where 80 of their economy is dependent on oil. Its not really doing anything significant. We have to move on. The chrysler is in focus trading without ferrari for the first time. We will go to italy for todays global story. We have more to cover we are just getting revved up bloomberg here on. To italyday we go where for robbery is followed up its wall street listing with a stock market debut in milan. This completes the spinoff of the carmaker from Fiat Chrysler. Here is john elkin earlier today. Chrysler has a clear scope of activity, its the seventh largest carmaker, and has an ambitious plan ahead. It has a great leadership team. We go outside the milan exchange. Good morning. Its the beginning of a new year. Error after almost 50 years, ferrari has separated from Fiat Chrysler. Valueore than doubled the of the stock so its good news for fiat. Way anduld find its execute it Business Plan before looking for a merger. Robbiegest challenge for four ferrari is to become a luxury carmaker. Limit to the usefulness of the application of the brand in areas which to reflect the exclusivity. Thats what we need to be careful about. You cannot take it anywhere. Otherwise it loses its value. I think we will be incredibly visible. What he said today is you want to double up the brand but you cannot it everywhere. You put a ferrari badge and a toaster, does not get faster. This is the main challenge for them. We should probably just talk about fiat. Going forward, ferrari trading like a Luxury Company is understandable but what is the future of fiat without ferrari . Asked sergiot i marky on the today. Uni uni march marchionne. He has to initiate a fiveyear Business Plan. Said that they are still looking for a partner. Andebuffed them last year now the focus is to execute the plan before looking for a new partner. He also said this could happen after 2018. They may fight a new partner after marchionne leaves the company in 2018. Matt bharati shares have done poorly. I talked to an analyst over the weekend and said the only people getting into this aggressively are Hedge Fund Guys think ferrari can double its production or they can raise its prices. Sergio think even believes thats a possibility, right . He has a plan. He wants to do deliveries to 9000 in the next four or five years. Its 700 nowadays. Its about 25 more ferraris. 25 more revenue and the margins are good. Still, the big challenge is to double up the brand outside carmaking. At the moment, they are almost starting from scratch. Race has been public since october. What do i care the most about . Its not that its trading in malan today. Today is the first day that Fiat Chrysler is trading without ferrari. They are spinning off the remaining 80 of their shares. Its an ok take her. They should have chosen enzo. David that would have fixed everything. Ferrari hasand it, a higher profit margin than fiat. If you take ferrari away, white mean that the fee of profit margin will go down . The question is why he did it. He got almost 4 billion with some cash payment. He managed to reduce the fiat debt. He could have done this a once in his life. Stephanie the fiat jolly is my favorite car. I have to ask you about oil. These cars burn a lot of gas. Matt they definitely do in this oil price is not affected by whether you buy a ferrari. It is coming up right here. If the oil price comes back, it could relieve some of the tensions between saudi arabia and iran. If you look at a fiveyear chart in oil, it has gone down, down, down, 62 in the last two years. Oil is maybe inching back. We will be back in a few moments. Stephanie we are talking Global Markets, but youre looking at a live shot of our nations capital. Thats right washington, d. C. Welcome back, youre watching bloomberg. It is the first day of trading in 2016 and it is a very big market morning. Here is Jonathan Ferro. Have great to have you. Tom cole and they say im not allowed to be on the set as Jonathan Ferro at the same time. David the Insurance Companies worried that something might happen with you two together. Tom will give us thenie morning mustread, but vonnie quinn with the first word news. Vonnie the flooding in missouri may take months to the waters are receding after floods cause 10 inches of rain over christmas morning. 25 people were killed. The government offices in San Bernardino, california where for two people died in the terror attack will reopen today. Almost 600 employees will return to their offices at the Inland Regional Center while the two main buildings will be open, the actual Conference Center will remain closed indefinitely. Donald trumps first tv ad of the presence of campaign will air in iowa and new hampshire. The ad focuses on terrorism and Border Security. Says he vows to spend 2 million a week. Than 100 journalists and 50 news bureaus around the world, im vonnie quinn. Mustread top morning hits close to home. Tom as my editor in chief from bloomberg, d want to pick a number for 2016 . How about 20 . Look around the politics of the western world and youll see that a lot of once unthinkable ideas and fringe candidate suddenly have a genuine chance of succeeding. 20 world is going to set the tone and democracies on both sides of the atlantic. It goes to the surprise but you and i share 12 months ago when we saw the Swiss National bank out of the blue stone people. What to you in europe is the shop this year like you and i witnessed 12 months ago . Johnathan not by divergent money policy but shock and all. Met inthe ecb that december 13 coming into this year, a lot of people look towards the fed. Be slow andll gradual, but you can get a price from the fed as well. Tom all they talked about was 20 donald trump. David it is not just central banks. We have got brexit. Its only a one in five shot for any one of them, but we could have a dozen one in five shots. Stephanie look at Bernie Sanders. Lastly, donald trump called him a wacko. Bernie sanders is trading at 5 . Jeb is no worse than bush of the bush family dynasty. Yet your head around that could get your head around that. Stephanie 20 this 20 . Abouthan we are talking winning in spain and that has not happened. The big story out of europe in 2015 is worth considering for 20162017. The political noise that we heard was no bite. We are hearing a lot of noise again. That one in five develops into something real, not yet. Tom what do you see in the currency and adjustments of the last 24 hours . What does it mean that if oil is stable or up that the mexican peso is weaker and the ruble is weaker . Is that a precursor . For lower oilsor prices . Johnathan if rent goes lower, they get hit hard. The story for the morning is that brent is only up 1. 5 despite what happened with saudi and iran is remarkable. I do not want to cherry pick the narrative. The longest story in the Oil Market Just proves how resilient that is. You can have attention with saudi and iran and have the moves. Tom you cherry pick the discussion to go with asset. The more instability that you have, yes, its bad for Global Markets. What will it mean