Minutes. 30 dropping as much as as much as 13 since the last earnings. We are about one hour away from the close of trade. I want to head to the markets we have the latest on this rally now driven by oil. Ramy it always has been driven by oil. We are still very much into the green, looking at what is happening with the doubt of by 1. 6 . Is the 13th out of 16 sessions it is seeing triple digit gains this year. The s p 500 is up and the nasdaq is up but we are clearly seen a turnaround after the selloff we did see on monday. Consumer confidence came in better than expected and, as we were talking about or earlier , oil is on the ball. Oil is up but off its session highs, off by 3. 4 . There trading at above annual 31 and . 39. Dive into my bloomberg terminal. Want to show you some interesting correlations happening as well as wti crude. You can follow the white line and the green line, which is wti crude. They are all following each other. They just cannot get away from each other, basically all moving as one. It is getting a new high and lets go back into my bloomberg terminal. I want to show you the thising correlation one little blue dot here. Notice how this looks like a mountain building up here. This is the biggest correlation we have seen as well as the price of oil, now at. 42, the biggest in a year. David thank you very much. Thes get a check on bloomberg first word news with Mark Crumpton at the news desk. Mark a man charged in alleged has been found incompetent to stand trial. He told an informant he wanted to detonate a backpack bomb on a key west beach. He was arrested in july after accepting an inner device from an informant. Hassan romney gave the pope a rug in the meeting and ask for his prayers. The vatican said iran has an Important Role to play in fighting terrorism. In el salvador are being urged not to have children for two years because of the zica epidemic. Government in central and south america are fighting the disease. More than a million brazilians have been infected and nearly 4000 infants have been born with deformities. Urgingal task force is screening all adults, including pregnant women and new mothers for depression during routine health exams. It is the first time the Government Advisory Group has recommended screening for maternal mental illness. Nearly 7 of u. S. Adults experience a depressive episode each year. Character actor a pagoda has died. He was best known for playing phil fish in barney miller. Fans of the godfather remember soldier. E doomed mafia a pagoda was 94 years old. News 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. Back to you. markets are rallying but they are volatile. The dow is experiencing its 14th triple digit moves in 16 sessions this year. This comes as the fed meets for its january gathering. Its latest policy statement is due tomorrow. Earlier, i spoke with Mohamed Elerian who is out with a new book. The key issues for policymakers to realize is the road we are on right now is going to and. Banks are no longer going to be able to borrow growth from the future and are no longer going to borrow financially from the future. Either we produce that through a better policy response or we have to give it all back. Tries tobook really defending what are we and why is it ending . It has run its course. Mohamed we are seeing markets become more volatile. We see economies responds less and we are getting less growth out of the system. Movements tocal come more extreme. Wherever you look, the 10 the pensions are there and these are pensions with a regime that is ending. It is hard to say when it is going to end, but it is clear one we would have tipped way or another and that has massive implications for how you position yourself. You think the fed is going to say tomorrow . I think the fed will not do anything. It will neither continue to raise rates, nor will it panic. Second, i think it will mention the market volatility and mention the weakening of global conditions, but it will not make a big fuss. It will say we dont have any evidence that is contaminating us, but we are keeping a close eye on it. Did. Ll not do what the ecb it will not try to signal it will loosen policies. Betty why not . Will they lose credibility . They dont want to be to bed they dont want forced by the market to change their policy stance. That was unusual in the last year and i suspect you will get a sense now that the hawks remain hawks and the doves become more dovish. Betty do you think anyone has remorse on the fed board right now . Mohamed i think some do. I think the markets have remorse. The markets welcomed the first hike and it was fine for it you days. Now you are getting more people in the marketplace asking the question economists are asking . Was it a mistake its interesting to see how the market view is shifting. I think we should expect more volatility because we are coming from a very artificial regime, but the markets dont like this volatility. They act in atty benign way when it happened, but look at where we are now. Do you think we are headed for a recession . Mohamed i put that at 30 a few months ago when we talked. People reacted quite a hit. 70 as we do not. Actuallyhis year, its quite hard to get a recession unless we get a major a major global disturbance. Think a massive policy mistake out of china or a massive market accident because it turns out some people had way too much leverage on and are forced to sell. So far, the probability is not dominant. I think you get a high probability, the gig is up to 30 next year and then we get closer to the t junction where major decisions have to be made. Betty what factors into your 30 probability . Mohamed the first thing is we have not motive growth so far. The longer you fail to promote growth, the higher the chance of secular stagnation. Your sister adjusts to lower capacity and lower potential. And we have prices that are decoupled from fundamentals. It will be hard to retain that. The third issue is the virgin central banks. The only thing that is adjusting its currency markets. Long enougharound to realize that when currencies move a lot, they tend to break something and it is hard to predict what they are breaking right now. Let the currency markets carry everything. If we do, theres a risk they will break something. View that was bloomberg columnist Mohamed Elerian with his new book, the only game in town. Much more ahead in the next 20 minutes. What impact will iphone sales have on the wireless carriers . Recording gains in subscribers. At t will open its book. And at the bottom of the hour, we will speak with former aig chairman and ceo, hank greenberg. To reaction to the plan return 25 billion to shareholders as he is facing pressure to break up aig. Trade, upook at the the most since friday, but coming off highs of the session. Betty good afternoon and welcome back to bloomberg markets. Where the markets are trading now a little more than 45 minutes before the closing bell. The s p coming off its high of the session, but we were led hereby energy. That correlation hitting some new highs. Well, just offas by 230 five points. We were almost off by 300 points and the nasdaq, well get Apple Earnings after the close, the tech heavy nasdaq up almost 1 . As some oflook biggest stories in the news right now. Meredith corporation is close to walking away from his pursuit of media general. The move would allow next are to acquire the tv broadcaster that, after months of negotiation. They are close to agreeing to a termination package that would include a 60 million breakup fee and no extra cash. Procter gamble reporting earnings that Beat Estimates. Secondquarter results were help i hire product prices. Tng is trying to improve margins. And twitter has a new chief leslieng officer, berlin, Senior Vice President of Digital Partnership at amx. Her appointment comes after twitter lost four members of their executive Leadership Team over the weekend, including its product and engineering chief. Bloomberg business flash update. Apple and at t are set to report their earnings after the bell. So far, at t has outperformed the market with a stock of 3 . It is now facing very aggressive pricing plans by its competitors. Has been seeing a slump in its share. Analysts worry they will hit peak iphone. Here with all that is facing these companies is our Senior Analyst from bloomberg intelligence. Peak iphone sales, are we there . Is hard to say. Apple is very good about pulling rabbits out of their hat. Betty they do need one. Guest the iphone 6 was a fabulous hit, the first largescreen iphone to hit the market. There was huge pentup demand and that company, despite its size grew, sales in certain quarters were 30 year on year. Facing thoseand tough comps and i think we are starting to feel that. Thats why theres a lot of noise around a quarter and people are concerned they may have missed the iphone numbers on the success. The iphone 6 was a tough act to follow. As was a decent upgrade. But to get people in the store to say ive got to have it this is the situation Successful Companies find themselves they become a big some of their own success. Get people toook stop hitting me sell orders on apple . John that is what i am listening for. What is next . Lets assume the iphone is that peak sales. You have to assume at some point that they need to get the encore going. Its not going to be a single thing. I have the feeling its going to be a confederation of products. It will be contributions from apple music, apple pay, car play, all of these things together i think have the potential longerterm. I think together some of they can help pick up some of the slack. Betty im not hearing great things about apple pay. Apple watch may be a little better. We just dont know. John heres what i think apple needs to do they are moving from music into video. Apple needs to make that move a little more aggressively than they have. Im hoping to hear something on that. At t, they are finishing up their merger with directv. What do we watch for . The date on to hear mexico. The smartest move was moving down into mexico. Its a high Growth Market and doesnt have a very rich demographic, but it has a growing middle class and they can build the pan north american network. There are strong ties to mexico when you think about the demographic of the u. S. And at t is really going after that, bundling with paytv. Have all thehey outts to execute and stand from the carriers on the video front. The largest paytv provider in the u. S. , have strong leverage with content providers and they have diversified into mexico where they will probably pursue bundling as well. Directv has a pretty big latin america why not leverage it . Much more ahead on bloomberg markets, including a look at the Options Market and how its taking it all in today. Betty welcome back to bloomberg markets. Stocks are bouncing back today as you can see, the dow jumping as much as 300 points, rallying after the big selloff yesterday. Volatility is here. Weve got more on the Options Market and how it is handling all this action. Joining me is kevin kelly, chief Investment Officer at recon capital. Markets are up on rising oil, but they are sort of poohpoohing on what happened on the shanghai composite. I wonder what you are looking at to determine your own market sentiment. Kevin it is purely dependent on oil. The impact of the stronger dollar has an impact on oil as well as china, so one of the reasons why management hasnt said anything, we dont know who is going to survive this. Is tradingeverything on unsystematic risk. We even saw google flag today. Companies are coming out with earnings, so that is what we are looking at an you can tell the market is uncertain because the vix is above 20. Below 23. Ver it is as we look at the fed funds future pricing and at 0 a ratef a race rise rise, what impact might that have on volatility . You have seen the new government the new governors come on and they tend to be hawks. Everyone expects march could be the earliest and they want to see guidance coming out for march. What is important about the vix is it hasnt gone below 20. We are still trying to figure out how we are going to grow in this post qe environment. Its not a big deal but we have not in below 20 all year. We could go precipitously higher given the uncertainty. Lets talk about amazon. The retailer talking about amazon growth in its prime users up 35 . Tell me more. Kevin a Research Report said it may have grown yearoveryear to 54 million users and that is important because prime users 1100, so thate is a key component. People toushing become prime members, so its a big push to get everyone in the ecosystem because it is a convenience economy. Ramy and they hook you with that free one year subscription and then they keep u. N. Kevin what is interesting about amazon is the growth in their amazon web services. A Cloud Computing company that happens to have an ecommerce site. Is going. W fast this ramy lets get to your trades. Kevin this is completely and earnings play. Sell the 560 put in use the proceeds to buy the 600 call that expires friday. Its a great way to participate and you have to buy it lower. It is a great options trade. Ramy we will leave it there. Thank you so much. Ahead, the ceo of aig is launching his response to carl icahn and other activists. His plan to turn 25 billion to shareholders and wind down Legacy Assets isnt going to be enough. We have the former chairman and ceo of aig, hank greenberg, on with us next. Betty you are watching bloomberg markets. Im betty liu. Lets start with a check of the headlines. Mark crumpton has more from our news desk. Been another snow day for federal government workers in washington, d. C. Offices were closed again while the city digs out from the weekend blizzard. Air travel is slowly getting back to normal. More than 2500 flights were yesterday, delayed but that is still a lot fewer than the previous two days. Southern california officials have issued a message in vietnamese as they hunt for three escaped inmates. It is believed two of the men belonged to vietnamese gangs. Police fear family, friends, and or gang members are hiding the inmates. They have been on the run since breaking out of an Orange County prison on friday. Authorities say a white Police Officer charged with the Fatal Shooting of a mentally ill, unarmed black man has resigned. The Police Department says officer robert olson stepped down on monday. He was indicted last week on charges of felony murder in the death of anthony hill. While responding to a call of a man behaving erratically outside an apartment complex. With the Iowa Caucuses less than a week away, donald trump has gotten a major endorsement from the evangelical community. Trump is running against several candidates with deep cries to christian voters. The endorser has compared theps style to his father, reverend dr. Martin luther king jr. , and jesus. Global news 24 hours a day, powered by our 2400 journalists and more than 150 news bureaus around the world trade iamb Mark Crumpton. Betty we have less than 30 minutes until the close of trade, the closing bell on this day when we have seen some pretty big games here. Abigail . Abigail very exciting, we are less than an hour away from what some are calling the most anticipated Earnings Report ever. Of course, im talking about apple and the companys december quarter. The stock is been volatile over the last few days, trading up and down through the 100 level as investors braced to see whether or not investor analyst concerns around week iphone demand and modeling negative growth for the march quarter for the First Time Ever will prove to be correct. Think these bearish concerns are priced in on the stock, they dropped over the last three months but was some analysts cautious over the nearterm, positive over the long term it seems anything is possible. Biotech, the sectors like of participation in the big rally. The nasdaq how Technology Index remains firmly in a bear market, below the support of last years lows that mesa just the selling will continue not just in biotech, but the nasdaq overall. Weighing on the biotech index and the top point to drag on the nasdaq itself is general on, stock down 4 this week after it was downgraded from cell to neutral at chardon on Patent Infringement concerns. The stock is down more than 15 over the last three months. The movement this week is fitting to that trading action. The one highflying stock is cooling off. Betty thank you, Abigail Doolittle at the nasdaq. Aig unveiled its new Strategy Plan this morning. It will sell its Broker Dealer Network conducted an ipo of its mortgage Insurance Unit and more aggressively cut costs while returning 25 billion to shareholders in the next two years. Earlier i caught up with the ceo Peter Hancock of the on the floor of the new york stock exchange. But we will do over the next two years to make this company more focused, more profitable, and return 25 billion to shareholders. That is speaking to all of our stakeholders. Im sure we will not satisfy all of them, that we need to deliver a sustainable franchise if were going to make the right decisions, trading off longterm versus shortterm urgency to deliver results. Betty joining me now is someone who has a skin in the game in aig, shareholder but the former therman and ceo, now chairman and ceo of cb star. What did you think of the plan . I agree with peter about breaking it up into three companies. I think that is a mistake. You say its too big to manage. Its a fraction of what aig was. Betty smaller than the company you were in. The size is not the problem. Hank the size is not the problem. It sold off some of its best. Ssets is not as deep in the foreign field as it used to be. Countries. 73 not just there, but doing business and growing, its nothing like t