vonnie: it's 10:00 a.m. in new york. i'm vonnie quinn. welcome to "bloomberg markets." we are seeing another bounce for some of the equities today. not so the s&p 500. it just turned down about three points. a little buying in the 10 year treasury. one of the stocks that had moved higher in earlier trading, just off the highs now in the regular session, is apple. gene munster putting a note out saying that it will lead again next year. we talked about tailwinds. tesla is down almost 1% now, even though we are hearing that the china delivery will begin on monday, the first delivery of a tesla in china, the china built model three. let's get to europe. we are open again after two days of holidays. stoxx 600 is up 0.2%. the dax is leading. resources are the top performers

today, along with utilities. the dollar index weaker. let's get to the markets now. joining us in studio is dennis debusschere, evercore isi head of portfolio strategy. we have a great piece on the bloomberg today talking about the decade beginning with everything crumbling and a lot of panic, and now we are heading into a new year when apparently nothing can go wrong. dennis: i think part of the reasons the market is acting like that is because people think everything is going to go wrong. that has created what we call the silent melt up. this is actually related to the fire and ice title, which i think is excellent, because there has been a complete change in the relationship between bonds and equities. bonds are longer duration assets as they had against lung equity exposure globally. that is usually a deflation

hedge. deflation was not something that existed pre-global financial crisis. there areist now, and only three asset classes you can hedge for deflation. that has anchored 10 year rates. that is why your term premium is -90 basis points, according to the fed. stocks still look pretty attractive. 80% of s&p companies have total cash fields, including dividends plus buybacks, above treasury yields. we have never seen anything like that. vonnie: when you talk about deflation, talk about where you are seeing that and what you mean. dennis: deflation hedging. we don't actually see deflation hedging. we see very low inflation. we see, since the global financial crisis, this desire to hedge against potential deflation. that is not something that existed prior to the global financial crisis. it was believed that monetary

policy could always cause inflation. when that turned out not to be totally true, when it turned out monetary policy was a relatively weak tool, that change the dynamics. it created a lot of uncertainty. to created fire and ice, a lot of uncertainty. has done is change the dynamics in asset classes, where bonds are telling you something different than they did historically. they are now a deflation hedge. that's where you go to offset equity risks. as long as your cash returns are high and you are using that, so your risk-free rate is below your gdp trend growth rate, stocks are really attractive. vonnie: i just want to dig in a little bit more into the idea of deflation hedging. do you see deflation at some point down the line? we are not seeing any of the expectation readings we are seeing from the consumer. dennis: great question. you don't see it, but it seems

fairly high odds that in the next recession, which i think most would argue is fairly likely in the next 10 years, you wouldn't necessarily have deflation, but you would have significant weaker economic growth, inflation that is going to trend lower at a time where monetary policy will not be as effective. because that would be such a negative scenario, you hedge that risk with long duration assets like treasuries. so it is just the probability of saying over the next 10 years, is there likely to be a recession? yes. how do i offset that? vonnie: so you're saying the on the saw in treasuries 10 year's think to active participants much more so than the federal reserve, for example. dennis: absolutely. i don't want to give you a sense of's false precision on this, but i would say the majority has

to do with some sort of deflation hedging, a lack of safe assets globally. vonnie: and this is why your look on 2020 is how i learned to stop worrying and love the markets. dennis: we've been fading the idea that recession risk was high. as long as consumers are strong, labor markets are strong, and inflation rates are dropping globally, it is hard for us to see recession. if consumers are coming into your store and buying things, they are going to produce. it is highly unlikely we see a recession outside of a shock. the other dynamic that would change it is significantly higher inflation. i would bet on, i thought was to bet on something that would change our view of the market, i think we had two more towards higher inflation then we would disinflation or deflationary recession. there doesn't seem to be a political constituency out there in fair for -- in favor of lower

deficits. there seems to be a significant amount of governments in the developed world with the desire to increase fiscal spending at a time when unemployment rates are very low globally. so as we test this idea of the flex curve is broken, we test these ideas that inflation is low forever and will push toward zero, maybe we will see higher inflation. i am not saying that. that's not a base case. just think that's where the more interesting risk is there to thing about. point: and on the ism measuring the economy, do you see any sort of effect on the industrial economy? do you think deficits will continue to rise, in spite of things like china trade wars and so on? do you think the old dynamics at play when it comes to the industrial economy, but new dynamics are at play for the retail economy? dennis: exactly. the economy is roughly 70% or

more consumer based. reallyustrial economy is dependent on significant china stimulus, really dependent on emerging-market stimulus. we are not going to see much industrial production in the u.s. like we have seen in different type of economies. it is tough for us to get excited about the industrial side of the economy, i.e., will we see reflation in classic terms like you saw in tony 13, 2016? 2016?2013, doubted. then you would get excited about capexdustrial economy, increasing, but it is not really there. gdp growth is going to be ok. i don't see much deviation, unless we start to see more fiscal stimulus and unemployment. then you could see inflation

measures kick up. vonnie: we are just cutting started. dennis debusschere, we have more time. first, let's get some first word news with viviana hurtado. viviana: the transition period for the u.k.'s exit from the european union may take longer than originally thought. european commission president ursula von der leyen telling a french nurse paper -- a french newspaper she is worried about how much time is left. after a landslide primary victory, israeli prime minister benjamin netanyahu is looking ahead. he will need a big win in national elections in march to stay in office. escapinghope of corruption charges is to gain a majority that would grant him immunity. over to southern australia, where temperatures are soaring to a blistering 108 degrees fahrenheit.

farther east, firefighters continue to battle bushfires. they are trying to gain more ground on the blazes before a heat wave hits this weekend. about 70 fires are burning across australia. nearly half are not contained. they've destroyed dozens of homes. russia confirming it will appeal its four-year olympic ban for doping. the russian anti-doping agency disagrees with the assessment by the world anti-doping agency. the case now heads to an arbitration court. the russian teams are banned from next year's olympics and the 2022 world cup. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. vonnie: thank you. don't forget, bloomberg subscribers can watch us live and catch up on key interviews

featured on bloomberg television using the function tv . you can also interact with our shows i sending instant messages on that page. check it out, tv . more with evercore isi's dennis debusschere next. this is bloomberg. ♪

♪ live from new york, i'm vonnie quinn. this is "bloomberg markets." let's check markets now with abigail doolittle. abigail: take a look at the dow, the s&p 500 here in the u.s. -- or the nasdaq, i should say, flipping between small gains and losses, earlier putting in all-time highs. we will take a look at a chart any moment. the nasdaq headed perhaps for its first down day in 12.

the ftse 100 down fractionally, the stocks 600 -- the stoxx 600 up. as for the nasdaq, let's take a look at a 12 day chart. as of yesterday, 11 updates in a row,- 11 up days in a having its best run from a daily gain perspective going back to a decade, since 2009. it will be interesting to see whether the nasdaq and put in the 12th update in a row. on the year, up 35%, on pace for the best year since 2009. speaking of big gains, when we go into the bloomberg terminal and take a look at the s&p 500, these are the annual gains. right now up more than 29% this year, headed for its best year since 2013. about s&p 500 contact on 0.4%, that will be the best gain going back all the way to 1997. that is the degree of buying power we are seeing this year

for the s&p 500, truly climbing that wall. on the day, where we have some bigger gains, the consumer discretionary sector is the top sector on the day, up 0.3%. gaining on.2%, still that record holiday. last year was a better year for amazon than right now. we will see what happens for the end of the year. take a look at rite aid, up 11% right now, up for the sixth day in arroyo -- in a row on a strong earnings report. best day for rite aid going 'd.k to 1980 when they ipo vonnie: with a still is dennis debusschere, evercore isi head of portfolio strategy. a lot more to get to. at 3400 is aing target for 2020 20 on the s&p.

have you changed that? dennis: no, it is still 3400. if we were to bias, it would be up, not down. we set it to every client we meet with, that the s&p is the most attractive asset class when you have inflation pinned and earnings growing. we expect earnings to grow next year. people find that pretty high. the way you get there is pretty simple. share of revenue growth, i don't think a people would be higher this year than 2018, and the dollar increased. capex is going to be lower next year, which means more buybacks. the dollar influence is not going to be there, so six plus three, 6% revenue growth, 3% from buybacks, that is 9% right there. if you want to be negative on

earnings, you're going to have to make a call for produce ignatik and margin contraction, which doesn't seem likely. vonnie: you'd think buybacks are going to continue, which would make spending more likely -- which would make capex spending more likely? benis: there doesn't seem to capacity utilization very low. it doesn't seem like there is pent-up demand for capital expenditure project. that's one. the other point is buybacks are going to slow because a lot of companies have levered up to buy back stock, and will not be able to do that anymore because her growth is slowing. people don't realize that 15% of companies are response but for 80% of buybacks. it is the mega caps. apple, microsoft, google, etc. that is just going to continue. they can do plenty of capex and plenty of buybacks along with it. for comfortable with that.

the bear would have to come back and say margins are going to go down significantly. that's how you get to a lower earnings number, and we just don't see that because of the change in makeup in the s&p which we discussed in the previous segment. vonnie: you discussed cyclical's, and you think they will continue to do well. sonis: we like cyclicals, financials are particularly attractive currency. you should see some uptick in the long rate, so the yield curve will steepen. the fed is still going to be accommodative. tech, big cap in particular, is still really attractive because of what i said earlier. the rest of the world looks at big tech is almost as good as the treasury yield, especially if apple is going to reduce its share count over the next five years, and things like that in other big tech companies. tech, industrials, financials, pre-much cyclicals across the board. vonnie: what are people who are

seeing 3.4% earnings growth missing? dennis: i think they are too negative on margins and give a low probability to buybacks. vonnie: does the election outcome, whatever it may be, change your forecast? dennis: yes. [laughter] tails: very simply, if the was elected -- and i don't mean this from a political view -- which is, say, warren or sanders, and taxes went higher, maybe back to the old rate, that is clearly a significant negative for future expected cash returns and multiples come down significantly. on the trump side, more of the same. i think the only risk would be if another four years of donald means you also have harder china policy, more huawei-type scenarios with specific risks for tech companies. vonnie: are the headlines we

have been trading on, does that stop in 2020? and wait for an outcome -- does the market ignore headlines and wait for an outcome? dennis: yes, on a macrolevel. the shift will lead to more specific measures on national security issues as it relates to tech companies in china and certain u.s. companies that do business with them. list ofnd up with a 200, 300 names of chinese companies we can't do business with for national security reasons, and then they come back at us, you could have very specific company risks, but at a macrolevel, market won't care. vonnie: always fascinating to speak with you. it was a nice end of your conversation. that's dennis debusschere, evercore isi head of portfolio strategy. muni moment is next. this is bloomberg. ♪

♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." time now for muni moment. we are not only closing out a year, but a decade in munis. for the asset class, returns over 53% for that time. taylor riggs has more from san francisco. taylor: what a return in the decade that has been. 20 meter discuss all of this is tom kozlik of hilltop securities. ofjoining me to discuss all this is tom kozlik of hilltop securities. as you look back, what is the big theme that sticks out to you? tom: we saw a real increased role of the federal government, whether it be the recovery act, the bonds program, and also a significant amount of money that went into disaster relief in different areas. one of the things i would be concerned about going forward is political -- the

political conflict we saw last decade are something we see not only in 2020, but in the medium term going forward. taylor: we also mentioned a huge run-up in taxable supply this year. what is the run-up for the taxable portion of the market? tom: that's one of the reasons 2020y volume forecast for is $450 billion. a significant amount of that is going to be taxable. we really sign increase the amount of taxable issuance start in the end of august, when rates fell significantly. i thing as long as rates stay where they are or potentially even fall, we are going to can didn't to see a decent amount of taxable issuance. one of the things happening is there's been an increased amount fromterest in municipals

international buyers and crossover buyers. after a 10%, 11% run-up in taxable yield, this credit have more room to run next year? tom: i think the things i am looking for in credit at the state and local government level , i have cautious outlooks on the state sector and the local government sector. pensions are differently factoring into that. that is not necessarily a 20 issue is much as a medium-term issue, but also, we are wondering how it is that state and local governments are going to be able to react to the next downturn, whenever it is that happens. that is something i am watching very closely. tom kozlik of hilltop securities, thank you for joining me on this friday. vonnie: taylor riggs, thank you for the muni moment. it is time for your bloomberg business flash. banks around the world unveiling the biggest round of job cuts in four years.

or than 50 lenders announced plans to eliminate nearly 78,000 jobs. say a slowing economy and adapting to the digital economy. morgan stanley is the latest to issue pink slips. about 1500 jobs have been slashed. the man who claims he invented the world's largest cryptocurrency says he may not be able to abide by a judge's order to surrender some of his bitcoin fortune anytime soon. earlier this month, a federal judge in florida found australian scientist craig documentsmitted false claiming he owed another man half of all the bitcoin he had mined. he says he is not sure he will have the information he needs in time to it and if i the coins he has to split. shares of qiagen tumbled more than 20% today, the biggest drop since october.

it hasch company says decided to continue as a standalone business. an acquisition could still happen. that is your latest bloomberg business flash. still ahead, it's been a tough year for bankers. jobs are going thanks to slowing economies, greater efficiencies as well from technologies. we will crunch the numbers next. this is bloomberg. ♪

♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." let's check in on the first word news. here's viviana hurtado. viviana: in hong kong over the christmas holiday, black clad

protesters smashing store windows. please was bonding with tear gas. police say those detained include children is in is 12. since protests began -- children is in is 12 -- children as young as 12. over to india, where violent protests continue. today come up paramilitary police forces were deployed in muslim majority districts. nearly two dozen people have been killed, 1000 arrested in the nationwide demonstrations. protesters are against a new citizenship law. , the secretaryar of state morning allowing renewed rep and sales -- renewed weapons sales to iran into the country would be allowed to go create global turmoil dashed

allowed to "-- allowed to "create global turmoil." japan calling on south korea to help improve ties between the two countries, coming just days after prime ministers shinzo abe and south korean president moon jae-in met in china. the leaders agreed to tone down their feud, but made little progress in resolving disputes. hurtingrelationship is security, trade, and relations between the two nations. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. vonnie: thank you. banks around the world are wrapping up the biggest round of job cuts in four years. morgan stanley is the latest firm to make a year-end efficiency push, cutting about 1500 jobs. joining me is bloomberg banking reporter sonali basak. give us some of the big figures

because they truly are astounding. sonali: 800,000 jobs were cut after the last financial crisis. this year alone, we have 77,000, more than the number of jobs added in terms of what people are cutting around the globe, with 80% of them being in europe. vonnie: give us a profile of these job losses. learned of the morgan stanley -- i don't want to say firings, ulling through people familiar with the matter. so where are these cuts coming? sonali: they are in almost every business line at all of these banks. retail bankers, investment bankers in japan, europe, u.s. some of the very expensive talent is being asked to leave the firm at many firms, for example, and you have ousting's of some ceos at global

investment banks as well. you see them at every single level, and by the way, we only really have two major banks in the u.s., morgan stanley and citigroup, that we have news on already. let's see if j.p. morgan and goldman sachs follow. vonnie: how many of these jobs are going thanks to digital efficiency? are any of them going because a certain percentage of jobs go every year? sonali: a little bit of both, not to mention morgan stanley's operations staff is going is welcome but a lot of these can be digitized over time. people still have the need for humans. in the u.s., the fin tech industry is raising record amounts of money, so you see people moving proactively into that second your, hoping that that is where the future jobs will be. vonnie: right. so if we widen our net and talk about banking including fintech, perhaps the number isn't so bad. sonali: that's right.

some are starting up offices in new york, hoping to grab some of that talent from the big banks, and you also have tech bunnies like huber looking to get into financial services and a bigger way as well. so the option i would get people looking for a job is maybe the big tech firms. vonnie: and certainly the skills necessary aren't the same skills potential he as they were before. why 80% in europe? sonali: people are definitely seeing a lot of pressures in europe on the regulatory front, but also, remember negative interest rates and a lot of europe is pressuring a lot of those retail jobs. how do you make money in those divisions? not to mention, and europe, people feel there are just too many banks. the investor hope is that some of these banks don't exist in the future, and that some of these banks consolidate. but when you have consolidation, you also have more job cuts. vonnie: i do want to ask about one u.s. bank, wells fargo. what is the tone there? sonali: charlie scharf has come

in, and the stock price data into soaring. they are hoping he cannot only change some of these regulatory hurdles, but that he will create a new vision for this bank that is lagging all of the rivals in terms of stock price right now. our bloomberg reporter that covers wells fargo, fantastic story out today about managers being pressed by charlie scharf internally, demanding what their strategy is and what they are going to do to change going forward. vonnie: he didn't get much runway before people were asking questions, but not surprisingly, because we've been waiting a long time for it to be transparent to see what is going on there. sonali: and he is putting his deputies in place already. we already have the interim ceo the people hef brought in is bill daley to come in and help as one of his top deputies. he's brought in a couple people from jp morgan. we expect more changes ahead in

terms of leadership, and even potentially strategy from charlie scharf, but not until they fix some of these regulatory problems ahead. vonnie: it is up over the year 17%, but when you compare that with the 42% gains for jp morgan, it doesn't look so good. muchi basak, thanks so from our banking reporter here at bloomberg tv. stanley druckenmiller is back taking risk. the hedge fund manager, widely considered the best of his generation, is bullish going into 2020. he spoke with bloomberg's erik schatzker in an interview that airedthe simmer 18th -- december 18. stanley: you have very low and employment here. you have fiscal stimulus in japan. we are wanting a $1 trillion deficit. apparently we will have some sort of green stimulus in europe. we have negative real rates

everywhere, and negative actual rates a lot of places. so with that kind of unprecedented monetary stimulus looked up to the circumstances, it is hard to have anything other than a constructive view on the markets and the economy in the immediate term, so that is what i have. erik: because everywhere you turn, you are being encouraged to take more? stanley: i don't need to take more. i have enough. but i just have always believed usually withns end tight monetary policy or credit problems, and i think what we are doing is definitely borrowing from the future, and we will probably end badly as did, but thatd could be years. i'm 66. i might be dead by the time that happens.

so in the intermediate term, technicals are pretty good. the economy is fine. if anything, our biggest problem going in once the fed has andted away from their qt tightening program, our biggest problem was global trade. i'm not saying everything is all peaches and roses now, but certainly on a rate of change basis, i don't see that being -- if anything, there is a de-escalation, not an escalation there. for now, all systems go. erik: how are you expressing that in your portfolio? stanley: well, i'm long equities. i'm long some commodities. i'm short fixed income. and i'm long commodity currencies, short the yen.

of, for now, betting on a benign economic outlook and a benign market outlook. but as you know, i didn't to change my mind, so that is for today. hopefully i will last at least a couple of weeks. erik: let's be a little more specific if we can. short the yen, commodity currencies long. the australian and canadian dollar? stanley: that's right. i have some others lying around. --y are not masses positions not massive positions. i might have more if i had clients. what do you own? stanley: i own copper, believe it or not. , on they, i think

margin, particularly with fiscal stimulus and monetary easing at the same time and he did munition of trade worries, global economy is going to be better than the imf thinks. kickerhas a little extra relative to the other ones. addhink that ev's probably 0.5% a year in demand, and supply looks to become more challenged if the chile situation doesn't clear up, but that is not why we own it. we don't own energy. justbly should, but i think the demand outlook is so challenged long-term. just not that interested. if you like the commodities short-term, it kind of makes the equities challenged because they are a long dated asset, and hopefully will go greener and greater. environment will

hedge fund, so i am perfectly happy if oil goes nowhere. and the stock market, anything particular you like? ago,ey: when we met a year my portfolio was heavily growth oriented, particularly the cloud , the theory being these companies would grow very well in a low nominal growth world. i still own that stuff, but my mix has changed dramatically to stuff that will do well in a higher nominal growth world. so i have banks, financials. i own japanese. i wouldn't call it a mix evaluated. i wouldn't call it a mix dominated by value. but it looks like a normal mix now. it is not just concentrated into companies that would do well in a low nominal growth world. vonnie: billionaire investor

stanley druckenmiller of duchesne family office speaking with bloomberg's erik schatzker. coming up, european health care stocks are on track for their best year since 1997, up about 37% in the. . group right now. will momentum continue into next year? this is bloomberg. ♪

♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." european health care stocks are on track for their best year since 1997, up about 30% as a group. analysts see plenty of reason for moment and to continue into 2020, despite the noise of a u.s. election year.

joining us from munich is bloomberg's tim lowe. why are analysts looking for another great year next year? some of these will be impacted by things like brexit and the u.s. election. reallyfew factors have fueled the 2019 performance, and probably will be there in 2020 as well. the first has nothing to do with election in the u.s. or brexit, and that is china. it has obviously been a huge game changer. the last few years, it's increasingly become a major moneymaker for these big pharma companies. better intellectual protection of their intellectual property, and just in november, the chinese added 70 new therapies to their list of drugs that can be reimbursed. these are highly innovative medicines, available already in the west, and that whole macro

trend is accelerating. just a wholeing is new generation of innovative medicines, from gene therapies and gene editing, which is earlier on, and some other defective silencing genes in the human body. a lot of m&a in 2019 has happened in this space. you should expect more next year. one of the notable ones last roche.s novartis, these big macro trends are going to keep continuing, and it is really helping out the sector. vonnie: it sounds from what you are saying like a lot of the improvement next year will come from organic growth and good things for humanity, right? , andherapies and so on less acquisitions and just buying pipelines. tim: a lot of these therapies

are still a way off from probably having a massive impact society wide, but there are tons of money pouring into these spaces, lots of promise, and that is the focus of the m&a activity. to $10 billion. it is not mega m&a, but it is where a lot of the game is at right now. vonnie: talk about who will do better. obviously this is the european index, but some of these companies have big operations in the united states as well. so the companies like sanofind novartis and are generating a lot of buzz right now for different reasons. novartis and roche both have some exciting late stage therapies coming online. sanofi had a capital market stay

a few weeks ago that really impressed -- capital markets day a few weeks ago that really impressed investors, moving away from some of the less exciting areas and really getting more into cancer drugs. are generating a lot of buzz right now. in the u.s.,king obviously one of the big topics is the drug pricing debate. we are entering an election year. there's going to be a lot of rhetoric. you will hear it over and over. but when you take a step back and realize that congress probably has a pretty narrow window to pass any legislation on this front, and actually means that 2020 may be kind of a safe space when it comes to drug pricing for these companies. beyond that, we will see. thank you for joining us. fascinating story, and a great group to watch. that is bloomberg's tim loh

coming to us out of munich. apple is our stock of the hour today, leading gains and reaching another new high. taylor riggs has details from san francisco. taylor: take a look at what i huge run-up you have seen, about 0.8% today, but for the year, up about 85%. this really is hardware. it has generally been outperforming software. you got the tariff resolution, pushing off some of those tariffs that were expected to hit apple products that has helped prepare the company stock higher. for market cap it is all about tech. apple has added about $540 billion of market cap this year. following that is microsoft. apple's market cap is no larger than the entire s&p 500 energy sector, and apple and mike are soft are higher than the entire -- and microsoft are higher than the entire consumer staples sector. what this means in terms of the

country missions to the broader indexes we have seen this year come up apple was 10% of the gain we have seen in the s&p 500, about 8% of the faang index, and 29% of the gain saw in the s&p 500 tech index. as we know, that was the best performing sector. i could go on. the statistics here are really amazing. annually, know that apple has been continuing to pivot to services and away from an alliance -- away from a reliance on hardware. how quickly is that happening? taylor: right now they get about 52% of their revenue from the somee, trying to pivot to of those services, the higher-margin business. this year, it was the iphone that was the big outperform or. a wedbush analyst spoke to me last night and said the iphone upgrade cycle is why he has raised this stock to a high price target of $353 a share.

all about the iphone upgrade next year to that 5g, so the long-term trend for future growth of the coming he continues to be in that services and wearables business. vonnie: thank you. still ahead, oil is trading near a three-month high on signs of shrinking u.s. crude stockpiles. we get inventory data at 11:00, but futures are in focus next. this is bloomberg. ♪

vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." dan deming of kkm financial joins us from the cme. we are a few minutes away from weekly oil inventories. spending on?ers

dan: i think the excavations are for a draw, but the api number arger draw than expected, so i think now the excavations are increased -- the expectations for a draw are increased. vonnie: what is the supply picture in the united states relative to the demand picture? we spend a lot of time talking about opec+ and demand increasing globally -- demand decreasing globally. dan: we have been seeing rig counts, offline the last few months. oil is holding in the $50, $55 a barrel level. we did see rig counts increased last week, and that will be an interesting dynamic the market will have to contend with in 2020. are we going to see production continued to increase in the united states? will opec be able to maintain

the pricing structure they have in place? vonnie: we see correlations between the u.s. dollar and oil breakdown this year. and oilar is down 0.5%, is lower, but relatively speaking, not by much. what about the dollar trading this year? do we see that kind of volatility again next year? dan: i think it is possible. it will be interesting in the ifst part of 2020 because the interest rate environment is going to shift, you may be see these other currencies catch up to the dollar. certainly when you look at the pricing of oil, i think that serves as a tailwind to crude, if we continue to see the dollar weakened. if we break below 96 on the dollar, i think that is certainly going to be a tailwind wti and brent moving into 2020. vonnie: finally, i want to ask you about the bit of treasury buying we are seeing. we are still in the 1.80% to

1.90% range. does that hold into the first quarter? dan: it feels like it. we got a couple of options this week -- a couple of auctions this week or there was some demand.ess in terms of solid demand there, and i think that is why we are seeing a bid come into the treasury market and seeing rates moderate. the expectation is the fed will be on hold, and if we see debt issuance gobbled up look at has been so far, i think you continue to see rates moderate at these levels. vonnie: thank you so much. that is dan deming of kkm financial. coming up, we count down to the european close with burns mckinney, allianz global investors fully manager. -- investors portfolio manager. this is bloomberg. ♪

♪ vonnie: welcome to the european

close on "bloomberg markets." i'm vonnie quinn in new york. u.s. crude oil inventories are out through the week of december 20. the market is looking for a drawdown of 1.43 million barrels. in advance of that, wti is down about $0.19. we got a much bigger drawdown of and dissipated, 5.4 million barrels. a bit of a recovery for crude oil futures, trading up a couple of cents. presumably that will go even higher. gasoline inventory saw a build, a little more than anticipated. distillate inventories were down. finally utilization coming in at a whopping 1.7% -- refinery utilization coming in at a whopping 1.7%. taking the