Existing us home sales falling. We are all in the green. 4 . P 500 up oil is also moving higher for the second day in a row. Lets go into my bloomberg terminal. Energy is the biggest gainer up by 1. 75 . And part of the trend has to do with energy. But are not 100 correlated they do move in tandem lately. Ramy they have been moving quite closely. The fall in oil has had a knock on effect. Nymex crude is pretty much at session highs. It looks like traders are looking ahead to tomorrow when the eia releases its latest inventory report. Inventoriesting likely rose one Million Barrels last week. Morgan stanley said, not so fast, a rebalancing might not happen until 2017. As oil rises, oil stocks are getting a boost. By 1. 3 breaking a threeday fall. And apple is falling today. 13 . Now down bylowered its price target five dollars because of production cuts in apples supply chain. For itsstock is headed worst annual fall since the financial crisis. And caterpillar is up the most since october by 4. 6 . Otr raising its rating to mixed from negative. Alix thats interesting. A good window into the health of the Global Economy on the industrial side. Thank you so much. In on the bloomberg first word news this morning. Mark crumpton has more. At least nine students have been killed by a mortar shell that slammed into their school in northeast syria. And Islamic State group leader behind the attack. Toks aimed at finding an end serious civil war will restart next month. Thats the word from the united nations. The diplomats will gather in geneva as they did for the previous round of negotiations. The peace proposal was crafted by russia. It doesnt mention what should be done about bashar alassad. Western powers want him out what russia is backing him. U. S. Army Sergeant Bowe bergdahl made his first appearance before a military judge to face charges of desertion and misbehavior before the enemy. He was arraigned tuesday during a short hearing. Entering a clean and did not decide whether he wants to face a courtmartial with a jury or one with just a judge. If convicted at a general courtmartial he could get life in prison on the misbehavior charge and up to five years for desertion. President obama plans to host a u. N. Summit next year on the global refugee crisis. U. S. Ambassador to the u. N. Samantha power says the issue will be a major focus during the president s final year in office. He wants to push other countries and the private sector to increase humanitarian aid. The u. N. Estimates the worlds displays population now exceeds 60 million. Hillary clinton is sharing her plan to cure alzheimers disease in iowa. She is pledging to spend 2 billion a year to find a cure in 10 years. More than 5 million americans have alzheimers. That number is expected to grow year 2050. On by the alix welcome back to Bloomberg Markets. Im alix steel. Some of the top forecasters on the street are issuing a running for investors in the new year. Beware the consensus. Says investors would have been better served in 2015 if they listened to warnings that low Interest Rates will hurt investors. He spoke to stephanie ruhle. If you look at the markets from an Asset Allocation standpoint i mean bonds, cash, stocks, commodities the best returning asset this year is cash at 1 10 of 1 . Weve got data going back 80 years. Thats the worst year ever. Theres nowhere to make money this year. Five years ago david tepper said, the fed is going to do qe and everything is going to go up. And it did. And now the fed has stopped you and is raising rates and nothing is going up. An Asset Allocation standpoint we have the worst year in the last 80. What does 2016 look ahead . Thaterybody thinks something magic happens in january and we have some kind of reversal on these trends and i dont the a reversal. I dont see a reversal. Stocks can correct, but everything is correcting right now and it the reduction of stimulus. Its the perception that we produce stimulus even more in 2016. Its going to be more of zero is the return for everything going into the first half of 2016 until something changes. The fed gives up on raising rates or the economy turns. Seniorets turn to Portfolio Manager with sky bridge capital. It was a pretty grim view. Do you agree with that . You have to be very selective next year. We think about this year as a mini 2011. Fears of a china hard landing, the collapse of energy and commodities. You have to pick your spots carefully. We think areas of structured credit, some areas of the Mortgage Market look favorable relative to other things. Washe commentator before right. Its not like somebodys going to ring a bell and next year is going to be a great year for all these assets, but there are far more opportunities today than this year. Mortgagebacked securities and collateralized loan obligations, but the spreads have been widening there as well. Thats the good thing. If they hadnt widened there wouldnt be an opportunity. The key is why by fundamentally impaired distressed assets . In any other scenario you are going to lose money. When you can buy fundamentally sound stressed assets. Not as cheap as they were at the end of 2011, but more attractive. Alix that chart was illustrating the stress has been in energy. But it has been bleeding over into other sectors as well. No one is spared. Thats the key again. Alix you like that. Of course. Lets start with commercial real estate. Defaults and a link with these have been trending down. Markets look forward. Obviously defaults are going to go up. The what would cause that . A true u. S. Recession. And the probability of next year and a year after that is fairly low right now. If you look at collateralized loan obligations, why are they sold off . Fears of contagion from highyield. Alix they have more commodity exposure. Step back. Is five tovalue, clo 7 . People are running away from credit in general. Quantitative tightening is taking place. There have been fears of a fed hiking rates. We see much better quality credit quality. Overall its much safer than highyield and you have much more of sides and far less downside. Alix what kind of return are you expecting . If you want to be greedy you can go after the more commodity sensitive yields and you have around 14 . We advised to avoid those because we dont see commodities coming back anytime soon. Stuff that is more bulletproof is very attractive compared to risk free. Youou do get armageddon, will lose money. If you get a very bad recession with energy extremely low, you could lose money. Its not risk free. There is no riskfree that could make you that type of return. But we think the risk is very low. Think about the Residential Housing market. You have the widest spread since the Second Quarter of 2012. Last we checked, the u. S. Housing market has done pretty well. Delinquencies and defaults are down. The consumer is in very good shape. You have had this huge collapse in energy prices. Andit has been the loser the consumer has been the winner. We think that sector is pretty attractive. Priceso you need housing and the Housing Market to really improve substantially to make those bets pay off . At a long as you are nominal gdp plus or minus trend line, you are going to do fine. Withstand 5 to 7 depreciation housing, which looks unlikely. To be greedy and go after more, you need a continued rapid appreciation of housing. Given where the market is today, we dont think that makes a lot of sense. The extreme rise in the dollar and the volatility we leadseen in stocks and over from china as well have been difficult. What is the risk going into 2016 . Every year we look and say, what could cause real damage . We are always fearful of the next bear market. Typically thats the risk that gets you. Right now the present risk is of a china hard landing. Thats the only thing we can figure out and we are fairly simple people. Thats the only thing we can figure out that could potentially cause a bear market. Because their markets dont bearen often their markets dont happen often. That is something we are concerned about. Alix troy, thank you very much for your time. Good to see you. Troy gayeski with sky bridge capital. Still ahead, it has been a rough ride for oil this year thanks in part to opec. So whats up for 2016 . We will discuss. Alix time for the Bloomberg Business flash. Boeing will pay 12 million for failing to meet a deadline to show airlines a way to reduce the risk of fuel tank explosions. Boeing will also have to take a series of actions to improve the safety certification of its claims and aircraft production quality controls. The fuel tank instructions are part of an effort to address problems that caused a boeing 747 fuel tank to explode over the Atlantic Ocean in 1996. Says theie fitch head of its namesake brand has been fired. The move eliminates a potential contender to fill the yearlong vacancy at the ceo position. Fran horowitz will assume the newly created position of chief merchandising officer effective immediately. Deal reported between ford and google could mean the companies will be first to put a self driving car on the road. Yahoo auto cited sources that say fords ceo will announce the partnership next month. Google has said it plans to get an Autonomous Car on the market within five years. And that is your business flash update. Lets head over to our markets desk with Ramy Inocencio. Ramy e. Coli and food still in the news. Those are two things we dont want to go together. Chipotle shares having another rough day. Down by nearly 4. 5 . This is now at its lowest in the past 17 months after another revealedof e. Coli was at Company Restaurants in kansas as well as oklahoma. Schiphol lay down and falling more than 4 yesterday. The stock is really hurting. Since the outbreak happened on november 2, you can see chipotle shares have lost this month about 22 of their value. That has sent their stock into a bear market. Shares have lost about 4. 3 billion. By e. Coli. It is also cosco being affected by e. Coli. Shares being affected earlier. We saw when the news came outoud the movement is reflecting that. And finally, i want to switch over to the energy sector. Sun edison shares are sinking. They are sinking the most in the past month. 25 , losing about a quarter of their market value. This has to do with hedge fund appaloosa and terraform power. A 10 stakes about in terraform and is now questioning terraform itself on recent acquisitions that it had. Appaloosa says that terraform is actually acting more for the benefit of suned. Alix thank you so much. The theme in 2015 for the oil market was in opec that keeps pumping crude. What about 2016 . Our next guest says a nonopec supply will move prices. So where the cuts going to come from . Lets ask the chief oil analyst at energy aspect. S us now. D jus when you take a look at 2016, how much supplied you expect to come offline and where . We do expect nonopec supply to come off by around 200,000 barrels today. , crudear led by the u. S. Production should fall by over 300,000 barrels a day. But the rest of the world also becomes very important. We have lost about 200 billion of Capital Expenditure between 2014 and the end of 2015. They will start to show up in places like kazakhstan. Already seeing doubledigit declines there. Brazil already grinding to a halt. Their Production Growth has pretty much ceased. We always talk of china as a big consumer. Produces 4. 2 Million Barrels a day. The same as canada. Starting to see production decline. Collectively you could easily see 200,000 if not more. Alix when we have a surplus of 1. 5 million, that seems pretty paltry. Do you expect opec to cut or more supply to come online as iran starts to export and libya also . Thats a very good question. Why we precisely actually dont expect the rebalancing fully to kick in between before q4 16. Opec production can really surprised the market because people are totally focusing on iranian production coming back. Updo think that comes back to 400,000 girls a day, we also think there is huge Downside Risk in countries like nigeria, angola, venezuela, iraq, libya. All of these countries are extremely cashstrapped. You can see production fall despite they have been maximizing prices. The client rates are stepping up. You see cancellations of projects. Thats why there is a big risk that despite iran coming back, we see opec production hold flat or fall. And i dont think the market is focusing on this. In q1 next year, a lot of Maintenance Work in uae, saudi arabia, qatar. Opec production could easily fall. Alix interesting. That shortterm issue with the maintenance. Part of what we have seen over the last few weeks has been an adjustment of the curve if you look at wti versus brent. Now we see stronger wti prices for the next eight months. Feel that weakness is justified . We all know why it happened. Its a huge decision, the lifting of the u. S. Band. The market got excited and started pricing wti very strongly. Crude production in the u. S. Is falling and theres also better demand because there are new refinery capacity coming online in the u. S. Problem now is wti is so much stronger across the curve relative to brent, its actually having the ultimate impact opposite impact and pulling in imports rather than incentivizing exports. The curve has actually gone the other way. Which happens in a market because theres enthusiasm when news breaks like this and the curve is starting to price that in. But this will have the opposite impact of allowing it. You are not going to see any for the next several months at these prices. Have all ofl just your excess oil abroad. Something i have been hearing about is increased chatter about the possibility of oil going to 20. Goldman has been making a case pointing to the possibility of oil falling to the cash cost. Do you see any chance of that happening . Think after a certain point in any market, the price becomes a number. I can tell you a lot of regions were cash costs are in the 30s or 40s. Arguably even today we are trading below cash costs for a lot of reasons. Her instance the north sea. For instance, the north sea. Isever i think the key because it has been so warm and thats why we believe there has been renewed pressure on oil prices and if we continue to remain this warm across the pressure will the continue. We could go into the high 20s or early 30s. Chief oilta sen, analyst at Energy Aspects in london. We will be right back. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Alix live from bloomberg World Headquarters in midtown manhattan you ever watching bloom Television Im alix steel. Mark crumpton has more from our bureau. Mark the white house is calling the killing of u. S. Soldiers cowardly. They were on patrol and targeted by the suicide bomber on a motorcycle the taliban claimed responsibility. One was a new York City Police detective serving in the air national guard. Two others were injured. The attack raises the number of u. S. Service personnel in afghanistan this year to 21. The man accused of buying rifles used by the San Bernardino killers is being held without bail. A judge ruled Enrique Marques poses a threat to the community. He is facing weens and terrorism charges. Because the guns were bought illegally. And a woman found in her jail cell three days after her controversial arrest, the trooper who arrested her during a routine traffic stop can still face charges. A new poll shows senator george cruz gaining on donald trump. The quinnipiac sur vay shows donald trump with 28 nationwide and ted cruz at 24 . The Iowa Caucuses are 42 days away. Global news power bid our 2400 journalists in our more than 150 news bureaus around the world. Im Mark Crumpton. Alix a record amount of deals with struck. M a Retail Companies sold 475. 5 billion the highest number in at least 12 years, for more i want to bring in jeff mccrack at any managing editor of the deal. Why . Joyful well 2 is as much as anyone is able to find or ask for in this era and even in ompanies, whether they are m a things, mcdonalds they are struggling to find more consumers and more growth and they start looking around for other companies in a similar space and figure weve gotten really food at costcutting and growth and theres a lot of that going on the other thing is i think one thing i should mention is what happened a couple years ago when heinz got taken private. They got bought by investors in brazil who are really, really good at cutting costs and they have put pressure on everyone else to start cutting costs or to buy from other people and cut costs. And there are some people that were that are there that were on the alix so really coming at it from more of a defensive capacity rather than an offensive capacity, whats the next tieup going to be . You mentioned food and bevpble. We are looking at emerging markets . Europe . Joyful one is asian companies. I think youre going to see re japan firms rather than chinese firms buying in so we have seen the beverage base do big deals and consumer space we are going to see more in the consumers space and food space and i mentioned japan and back back but there are companies that have a lot of money and companies throughout they could buy and i wouldnt be surprised ee that happen in 2015 in 2016. Alix we will discuss an investor who is putting his money in guns, bullets, jails and more. Are products that turn other people away actually good places to put your money . Alix welcome back to bloom markets im alix steel. Well, many are questioning whether 2016 a repeat of this year. Speaking on bloom go this morning our guest assessed ending