>> it's great for our country, yeah. >> well, glen, thank you very much very much for coming in today. >> pleasure. >> it's been a pleasure having you here. please come back soon. >> entrepreneurship, free enterprise. isn't that where it comes from? >> yes, yes, yes. >> god bless it. thank you, again, appreciate it. that does it for us for today, make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer author of the new book "jim cramer's "get rich carefully" on shelves now. >> barnes & noble signing tomorrow night. >> and david faber. what a morning for business news we have earnings on tap. a beat on adp, a series of big analysts moves and, of course, the dow needs 45 points to break even for 2014. look at the ten-year, we'll get some minutes from the december fed meeting around 2:00 p.m.

eastern time, italian unemployment 37-year high and more signs of euro zone reflation. shopper trak out with the first wide scale read on the holiday shopping season and it's a mixed picture for november and december, in-store foot traffic at the nation's retailers fell 14.6% compared to the year prior but in-store sales grew at 2.7%. slightly hopper than what shoppertrak had forecast. the main reason for the traffic plunge they say is that. shoers are making fewer store visits than in the past because most window shopping and browsing is done online ahead of time, so the shoppers that are making the shopping trips are going with intended purchases in mind. black friday was indeed the strongest day for brick and mortar retailers both for sales and traffic. then there was a large lull until the last-minute panic kicked in. the week ending december 28th accounted for four of the top

ten sales and traffic days for the entire holiday season. when it comes to categories shoppertrak says electronics and wireless stores saw the biggest sales increase year over year up nearly 5% while taking the hardest hit to foot traffic nearly 13%. the apparel and accessories category saw traffic drop 3.6% and sales growth 3.5% for the entire season and interesting numbers and behavioral things we're seeing here from shoppers, carl. >> we're getting a clue how the consumer's been shopping lately, courtney, that's good enough. it brings us to jcpenney who says this morning it is pleased with its performance for the holiday season adding it's showing continued progress in its turnaround and reaffirming its fourth quarter outlook but the stock is not responding. it's down. when november comps were up ten, jim, they were very specific. hardly any specifics out this morning. >> i think that's what bothers people because we were hoping for -- they say there's a continuation, but why not say listen, our numbers were up "x."

they're not doing that. go back to the great things that courtney said. really a seminal note came out by howard schultz on monday night saying, look, this is a secular trend. it means it's going to happen for a long time. traffic is no longer going to be up. that was one. the second one was -- and therefore, because it's all online. the subtext is amazon. >> we hear mall traffic has been down for a long time now. >> right. >> i can remember even in the spring it was a bit of a theme when it came to retail and there was concern about it. >> i think people felt, wait until the holiday season comes and it will reverse and it hasn't. the other thing is gift cards, which is a spike in the way that people give giving and that helps the first quarter. i think you have to be a little bit more holistic and not to be touchy-feely here, and look online as the way that people shop in this country. and i think we'll see the numbers allianz data services was on "mad money" was up 6%, 7%. >> we referred to bill miller's

comments about jcp saying that if good news started to happen it could be up 50% in his view. he had a good track record last year. do you like it here? >> no. i need good news. bill miller teased it and i think one of the things he had four of the five top s&p stocks he owned. but i think that mall traffic not being good makes me want to know about gap. makes me want to know about victoria's secret. how well is it doing? it's a mall-based store, and it also says maybe the amazon estimates are too low. >> but profitwise it may not matter that much, but maybe revenue? >> what was the word you used? you always get it wrong. you start talking about profit. >> no, no, no. >> it's a 20, 25 stores. >> twitter, you know, in the year -- in the year 2025, twitter's going to have a good number. >> 2025, i think i can discount cash flow back from 2025. earned years, that's nothing.

>> snap for that stock. >> it will be incredible. >> snapchat. >> you'll have it all wired into your brain and you will actually be largely robot at that point. >> now you're thinking. >> thank you. thank you. all right, let's go from the micro to the macro. ahead of friday's big employment report adp said the private sector added 238,000 jobs in december, that exceeded consensus forecast the morning after wall street's first rally of the new year in which we saw the dow rise almost 106 points and the s&p also had a nice day after three straight days of the new year down. we're up. that number not bad, 238. we'll see what we get, of course, on friday. >> right. i've noticed yesterday that there was a reversion to growth stocks which tends to make you think that maybe the ten-year will stay at 3% regardless of how strong. we've got a little bit of selloff in treasuries this morning, but nothing monumental, even though that number's strong. i'm seeing a lot of companies, a lot of the research is going

back toward the just kind of classic growth names. a lot of downgrades of industrials because they've moved so far. i see kraft going -- kraft going higher. i do want to ask carl immediately, when i saw kraft going higher, it was the one-two punch. velveeta shortage, i don't think there's been a shortage in the history of velveeta. >> alleged velveeta shortage and the "today" show did an outtake whether it's true. and deutsche bank upgrade kraft and her schiff's as well and take down dean foods which is actually smarting today. >> yes. i think this is what people kind of want to be in right now. they want a little safety and the stocks have dropped out. a downgrade of clorox, people just hate clorox. during the run from '70 to '95 i've never seen a group of analysts as negative on color rocks except maybe kimberly. these companies can improve margins. clorox is an outlier. i think the hershey call, i think the kraft call is about where people want to be positioned for the first quarter. it is surprising give n the fac

that you get adp numbers and mortgage numbers are pretty strong. i missed industrials and let's rotate into the other stuff. >> adp, by the way, is the third straight month of 200 plus and it's the best since november of 2012. so, are you counting on a good friday, a good friday number? >> yeah, i think so. >> really? >> i think it will be decent. >> weather aside because that had been some of the -- >> i think things are better. i think things are better. rick santelli said things were better in his analysis. >> things have certainly been good for quite some time for hershey. just to point out it's been a great stock, i mean -- >> they've been pancing cadbury. >> all true. but i go back to the calls for consolidation after kraft and kr cadbury got together years ago and they will crowd hershey out on store shelves and make it difficult for them with all their various avenues for distribution. none of it ended up -- >> hershey got new management and what did they do, they will

move manufacturing to mexico and we'll no longer be paternalis ic and they've installed and now suddenly they've been reignited. i'm watching this kraft, it's very inexpensive. >> yeah. deutsche bank goes from $90 to $108 on the hershey target. earnings are in the spotlight this morning. micron out and constellation brands amongst others winning in the premarket. container store 11 cents beats by three cents. revenue was a miss. some weird ipo-related compensation expenses. >> and traffic was down and people expected it to the be up. this will be a constant i'm afraid. traffic will be down. this had been a stock that had been incredibly strong after the ipo, a much-loved kind of a whole foods glow. you know, i love the research. women love the container stores kind of thesis. but i do feel that when you have a heightened expectation and you don't get perfect, this is what

you get. >> yeah. >> constellation brands was better than perfect. this decision when budweiser merged, where they were able to get modelo. >> yeah. >> they're making fortunes. >> that was a big day. i remember that day. >> it was a -- well, first it went -- >> boom! >> -- when they came out against it doj, then it collapsed and then, of course, they were able to create that deal and ended up being much better. >> $110 beats. >> micron and constellation both show you -- people will come on and say, oh, these companies didn't beat numbers. you look at micron and constellation on the number beat, it's extraordinary. >> that is a -- that's up almost ten -- more than 10%. that's a 12-year high on micron. gross margins of 16 points! >> that merger, the failed japanese company, really helped them. i was skeptical kind of feeling, do you know what, the stock was at $5 a year and three months ago. but a sprint, micron, that $5

cohort, the five blow which is also a chain that -- >> yes, our favorite. >> just so wear very clear with this weather pattern, 5 below is not a weather-related story. >> didn't know that. i'm glad you let me know. >> but the $5 stocks worked out. >> the fourth consecutive quarter that micron has beat and after the performance of last year people have the sense no way that can be repeated. >> i felt it how could someone not blink? when you go through the competitor, when you go through the comps what they said over and over, they anticipated the bears. we'll be pricing disciplined and other times during the micron of '88 suddenly were factories opening all over and that's why people were negative on seagate and western digital. the factories were not built and supply remains tight. flash which the other part of micron's business not as strong, no one seems to care. >> we got these names out.

alcoa is not that far away and open the floodgates. >> open the floodgates. i go back to the constellation brands and i think was it that hard -- by the way, just for fairness and full discretion and discussion, the place i'm opening in brooklyn, we served modelo light and modelo dark, that is our tap. >> it is your tap. >> i got a good deal. >> they got a good deal, too, now they are brewing it. constellation actually owns those breweries. >> it was a license to print money in the beer business, coors versus kors. >> if you are not aware jim is opening -- how do i have -- you are opening a tequila bar. >> a small plate mexican restaurant, tapas bar. >> with good tequila and sangria. >> i got the mixologist and the sangria and ten specialty drinks and five that are mezcal related. >> it's not enough to hold down two full-time jobs and write a

book and have a bed and breakfast, an inn. >> that's doing well, man. >> you also need to own a mexican restaurant. >> and the gold or silver mine on the side. >> i checked it out. i kicked the tires on the gold mine. >> 16 homes. it was 12 earlier. >> my father was very distressed to hear he thought i was overstretched in the home business. and i don't own 16. >> oh, it's a business? i didn't realize that. when we come back, yahoo! ceo ma rrissa meyer holding cou. and katie couric not the only one on stage with her. and carlos gohsn about the car of the future, a self-driving vehicle. 10 million on the road in the next few years. >> hold me skeptical. >> we will see. one more look at futures here after the rally yesterday. implied open down 24. we'll talk about some of the big analysts moves including the mcdonald's scenario and twitter in just a moment. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping.

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among the members of the "saturday night live" crew last night at the consumer electronics show in las vegas where yahoo! ceo marissa mayer gave her keynote address. she outlined her company's plans for the year including new apps, sites and acquisitions and, of

course, she talked about mobile. >> this fall for the first time ever we surpassed more than 400 million monthly mobile users, excludeing tumblr, that's half of the 800 million total monthly users we see on yahoo's core sites. mobile has made our daily lives more consistent, more convenient, and more inspiring in ways we didn't even think possible ten years ago. >> it's all about marketing at ces and they got their money's worth today, cover of the money section of "usa today" as mayer puts on a show, jim. >> yeah. she's heir apparent to the jobs show. people are riveted by what she says. i don't think it's that shocking that mobile's that strong. these are all part of the gigantic transmobile, social and cloud that have infected our stock market. and if you have mobile whether it be nokia another "back frof the dead" stock or when it be google which has been an incredible performer or yahoo! and she just acknowledged it's very strong.

one of my favorites, david, you make fun of me because i have key of the market stocks something i do to torture david. and yelp is a social, mobile juggernaut and today we see a price target raise for yelp, that is my mobile barometer because people -- works better on mobile than desktop. >> do you think the turnaround has taken place at yahoo! or as we've said so many times, of course, the move-up in the stock price has largely been due to the increasing value not only of the alibaba take, 24%, and also at stake in yahoo! japan that has risen dramatically. those two accounting many analysts believe for as much as 80% of the current value by any number of different estimates including if you think that alibaba is worth $100 billion on the ipo $135 billion afterwards or even more. >> i think it's largely the sum of the parts. i think the core business of the web has been very difficult on an ad basis, if you have a click business like google you can make a lot of money. but, look, alibaba, you talked

yesterday about valuation, david, took my breath away. you talked north of $200 million -- >> i threw it out there in some ways in jest but also because it's a juggernaut of incredible size and growth. >> alibaba is probably going to be -- this is the facebook of 2014. and yahoo!'s go a big chunk of it and yeahoo! is going home. >> cantor suts cuts it to a se. mcquarry on the 27th of last month went to underperform and we talked about the morgan stanley underweight on monday, jim. >> here they finally start talking about the first lockup expiration which is february 15th saying that there will be supply. i mean, there's no valuation that you can use which is what they are dealing with, cantor. now, the run that it had, i believe, from $40 to $70, i think that was on the backs of shorts. it's really hard to short a ipo,

but people did it and they got caught up and now there's finally actual profit taking. but shorts were the ones that pushed this up in a monumental, end of the year short squeeze that seems to have been alleviated. that's what you're seeing. >> it's starting to add up in the wall street research on twitter. >> three selves from big names essentially. >> interesting, the cantor piece is very sophisticated. major discrepancies between banking analysts and nonbanking ones. analysts whose banks were involved with the twitter ipo generally says it's lower than those not involved. that must be so contrary to what you must be used to, david, during the '90s, the pre-attorney general of new york -- >> the sox or toes whatever we want to call them. >> sox is running. >> sox is running. >> at spitzer's feet. >> the sox. >> but, you're right, that is unexpected. 10 or 15 years ago only be the chorus that said great things

about whatever the underwriting had been that their firm was involved with. it's surprising to me, still, that they actually would be more negative. >> remember, the tech head, now is co-head of goldman, was very conservative when they bought this banking deal. >> thank you. >> and twitter was in retrospect primesed correctly. that was a great job by goldman. >> yep. >> and i don't think anyone can refute it. >> dick costello will be on a panel at ces, and february 5 is the earnings day. >> the revenues day. we always have to distinguish it, the revenue day for solar city and the revenue day for tesla and amazon. we got two classes of stock. i always have to give him trouble with this, he does not understand there's modern art, okay, and it is valued very differently from the realist, david, because of braque and picasso which was aol and yahoo!. >> i thought they were modern

art. >> they were the beginning. >> twitter is a post impressionist. >> post impressionists? >> we don't care about impressionists anymore. >> it's a great metaphor, because people say my kid do that. >> i took it in college. >> monet. futures weak here as ten years touched 10% on the back of the strong adp number. [ male announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies,

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six minutes, hump day, you know i always like to do that one. >> yes. >> it's the "mad dash" of the day, let's start -- where are we starting? wells fargo has a sign of the times upgrade, downgrade. there are big concerns, panera missed the quarter and many say they are back on target and wells fargo said hold the buy panera. another sign of the times mcdonald's, buy to hold at wells. people are saying, you know, mcdonald's has gotten out of favor. doesn't have the right menu. now, ubs complicates things by having a sell on wendy's. >> i'm getting confused, all right. >> i think this is wrong. >> you think that's wrong. >> i think wendy's is the third way. >> you do? >> between mcdonald's and panera. cheaper, fresh. made to order. >> back to panera for a second. >> okay. >> because frankly i'd rather

listen to you than an analyst on that stock. you follow it closely. you know the company, you know the management. what do you think? >> i think it is making a turn. the stock was obviously much cheaper here. it has had a big run. we're going to profile it on "mad money." i'm only nervous about it because the company on the last conference call was abjectly negative about itself and i think that i want to hear that maybe things are actually turning around. they had what's known as a through-put problem. they couldn't get people through in time. the asian chicken salad with 417 calories, saved, is killer. >> but the lines were getting too long and people were giving up. discouraged line waiters. >> and the price has gone up. it's not cheap, it's $13 when i go for my dinner. that's a higher price point than i like. admitted i get some other things, but wendy's is the cheaper price between mcdonald's and panera and i don't have faith in this sell call of

wendy's. i just don't. but, remember, this group is in flux. and darden, i know we talk about transactions. >> yes. >> darden is a sell at credit suisse. the spin over red lobster people are telling me it can't work because red lobster would not be solvent if it spun off. >> yeah. i have not looked into it although there were a number of people questioning why. >> right. >> and why the need necessarily. >> execution. >> yeah. >> people are thinking maybe the execution is the issue here not the idea that red lobster can't be revived. it is difficult to revive a restaurant chan. >> all right. we'll see how all those upgrades and at lot of grown grades affect stock prices this morning. the opening bell is coming up right after this.

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♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in just over 30 seconds. there's a lot going on whether the downgrades that jim's been walking through the past half hour. the earnings we're starting to get. the rally from yesterday, jim, when you said was healthy and

that the classic growth stocks are leading. that says something. >> i think that's fine. they've been doing nothing for a while. a lot of people have been saying, well, wait a second, what's happened to my hershey. why did that stock go up -- stop going up. you want to watch that stock closely. you want to watch colgate, another one that had a great quarter. when is it going to start moving up. watch starbucks that started rallying yesterday. chipotle rallied yesterday. it's a sign of health not weakness. whole foods is up, too. >> and the s&p and the breadth will be mixed more than yesterday. the big board down here eastman kodak emerging from bankruptcy four months ago highlighting its transformation into a technology company, and einstein noah restaurant groups celebrating their thin-tastic bagels. >> what? >> bagels. >> i have to stop eating bagels. i buy 12 bagels and i don't eat them because they are fattening.

i'm an old london melba toast guy. melba toast is very good and it's owned by b & g foods which is a monster stock. winner. >> what's going to be monster is forest labs a 16%, almost 17% gain from the drugmaker. david, what do we know? you want to get into it now? >> sure, let's do it. >> is this the "faber report"? >> well, no, we can call it that if you want. >> i like to brand things. >> i do, too, especially myself. look at this, 16%. they are talking about significant synergies of $125 million in cost sinnerynergieie complaining the companies and the market likes that. this is not an insignificant acquisition by the way for forest labs which i believe carl ichan still has board seats. $2.9 billion in cash, again, it's a private company.

that we're talking about called, that has a franchise in gast gastrointestinal and particularly in cystic fibrosis in europe. >> right. >> back to the larger theme we've discussed so many times and we'll talk with paul parker who runs m&a at barclays later in the program, stock prices continue to go higher and be well received when they announce deals particularly deals, of course, that bb will be accretive fairly quickly. >> i was thinking forest labs was too limited in its portfolio. one of the things that happens, i look at it and say, oh, yeah, who saptalis, they just paid $2.9 billion for. david mentioned the franchise, but what matters i'm raising numbers on forest labs, that's what you want to hear. constellation brands when they bought that company, it didn't add. over and over. when we've seen acquisitions it's been a reason to buy and this is no different. >> yep.

and using the debt markets eventually as well. $1.9 billion bridge facility will help to finance this $2.9 billion cash acquisition. of course, it's any number of those themes. money is cheap and by the way you get rewarded for doing deals and yet we've seen so few in terms of certainly dollarwise. volume has been okay -- well, not great. >> right. >> but we've really seen not many big ones. >> i think a lot of companies aren't for sale. i'm sure if you're kraft right now you probably want to -- or pinnacle foods is a terrific little company. they went public last year. they've been looking for acquisitions, okay, and even in the center of the store where there are big price wars, nobody's for sale. i think there are a lot of people, bankers, saying find me someone. but they had to go to a private equity to find this company. i bet you they made a lot of money on it. >> i think it was good, too, one would imagine. >> i feel terrible that i don't know. but they're private.

>> you know they're a seller obviously private equity's in the business of exits as we saw last year with so many of the ipos. >> forest will lead the pack this morning. ford is not that far behind. as you know by now al mulally said he'll stay and not going to microsoft. "the journal" talks about the lack of a leader beginning to have an impact at the company. >> yeah. >> people are nervous. work's not getting done. and there's a note out saying it's disappointed and those who are highly qualified declined the position. >> it's hard to believe anyone would want to turn it down. mulally, he has said he wants to take the stock much higher before he's done. this stock was at $18 this week in 2011. so, he's not gotten it back yet. >> yeah. >> i think this is important. microsoft, i don't know, geez, you get a lot of money if you run the company. what are they looking for? a guy who wants to shrink to grow? a guy who wants to grow to

shrink? who knows. >> the last checks i had towards the end of last year had indicated that mulally had fallen out of favor and it may have been something we discussed here a bit. not a big surprise that that would have occurred, although i guess some still hoping for it. i heard mr. elof's name had not been at the forefront any longer, the man that ran nokia. how many candidates are left? i've heard one internally and one externally, the hope is they get something done certainly in the next couple of weeks at microsoft. the hope originally had been that they'd get it done before the end of the year. >> is the board more dysfunctional than we realize? >> i don't think so. >> they put out mark hurd, how do names get in the mix? how does it happen? >> i don't know. i know that they've been running a process. i believe it had been down to a small group that they needed to wait and do some other interviews that had to wait until the end of the year.

we'll see and i wouldn't be surprised if we saw something very soon. >> it's a great job. it's a great job. you would think that people would be banging down the doors. that's what i said, who doesn't want to run microsoft. >> would you want to run it? >> mulally -- >> al mulally doesn't want to run microsoft. we don't know if they said they don't want him. >> exactly. exactly. perhaps they indicated as it was made clear to me to a certain extent he was not a choice. >> is this where people are afraid bill gates will question him, hanging over? >> what about ballmer, is he staying on the board? >> i'm not sure about steve's plans. >> do you want two former ceos and the founder on your board? >> no, you want the ceos to really just say, hey, it was a terrific run and move on. you don't want any second-guessing. the great ceos literally do move on. and you don't hear much from what they -- they don't criticize and the ones that are difficult are the ones that say, hey, listen, my successuccessor.

>> one of the winners on s.e.c., micron, constellation, monsanto, the three companies that have essentially had earnings, what does that tell you? >> i think expectations were ratcheted in. look, i'm a believer in this market. i'm a believer because let's take this honeywell, united technologist downgrade today. my charitable trust owns honeywell. i can't think finer companies to own going into what could be a robust 2014. and they have price targets and when they get there you can bump them and say, do you know what, this was terrific, i'm done. the latter is happening far more than the former. the analysts are more conservative versus the stocks than any time i've ever seen in my career. they're not on board, carl. >> they've made that point consistently day after day. jcpenney down nearly 8% which will take you down to early november. not a new low. >> boy, they must not have cold weather clothes. because if you do, you are printing money. >> bringing people in one would

certainly expect into stores. on the previous subject of stocks that went up when they announced deals, mckesson was up. not that long ago they announced a plan to buy a german company and the stock went up dramatically, but since then elliott the large hedge fund, new york-based hedge funds in any number of disciplines in terms of asset management owns 25% of the votes there and can conceive -- and can block that deal. so-called back end if you will. according to a couple of news services there are negotiations under way to try to break that stalemate and that is why you're seeing mckesson shares up conceivably. if they can do that they can complete a deal to acquire this company which has been -- elliott does this as a tactic. they argue it's worth a lot more. that remains a -- a question. but nonetheless, they have 25% of the votes. they can prevent the ability to consolidate. >> did you see hess today spinning off its retail? >> yes.

which is something they had said they would do. elliott you bring up because five board members that they got after a nasty fight in 2013. >> subpoena tells me u.s. mergers year to date meaning this past week, $28 billion. best start since 2000. >> well, i remember this time last -- actually in february, i had been in mexico. featuring modelo in my refrigerator and we'd had the heinz deal, and i had said, do you know what, this is the year for m&a and i could not have been more wrong. >> let's get to bob pisani. >> the adp numbers were great, the best in over a year. the trade deficit greatly improved. a lot of people raised their gdp numbers for the fourth quarter and a lot of people are 3% the gdp, 2%'s the new norm and a lot are the 3%. that's a little disappointing. let's talk with earnings. we'll start tomorrow with ole

co-wa, the hope is for maybe better commentary and a lot of people holding back guidance are not much of an issue anymore. obamacare is still a bit of a mess but it's getting worked out and the economic data points have definitely been improving. another thing, europe is doing better. look at the stock markets over there. the hope here is maybe the global part of the earnings commentary particularly europe at least will be doing a little bit better in terms of the commentary we'll be hearing in the next few weeks. there's also expectations the dividend increases are going to continue in 2014 as well as the buybacks here. as for the full year, 2013 right now earnings are going to be up a respectable almost 6%. that's very respectable. what's a little bit more problematic is the revenues that's only up 1.8%. the hope is that the revenues will double next year. maybe we'll get 4% or 5% revenue increases, we all know that's a laggard for a long time. put the european numbers up. i want to show you the two trends. first trend is in with southern europe. the second trend is out with

emerging markets. so, in southern europe, all the peripherals, greece and portugal have done a full year in five days trading essentially. and the peripheral debt has been on fire in the last five days and the two big names germany and france have been the laggards. that's the 41st trefirst trend other trend is the emerging markets have been a mess. thailand, south korea, russia, india, webrazil, all to the downside. let's look at the earnings, michron is nor toeiously difficult to model. that stock moving after an amazing 2% gain last year. constellation great beer sales. really amazed, corona and modell modella on fire. u.s. bancorp downgraded specifically on evaluation. and mcdonald's downgraded lack of potential drivers for 2014

wells was talking about. and highly promotional domestic environment is what they're worried about there. right now the dow down 31 points. guys, back to you. >> all right, thanks, very much, mr. pisani. the emerging markets, glad we looked at that, it's painful. >> rick santelli is at the cme group in chicago. >> the fixed income market has been hovering a bit, but good data certainly does wake it up a bit. if you look at a chart of an important spread i picked fives versus 30s but 5s versus 10s looks similar, good data from adp, better than anticipated, we saw that the curve flattened a bit. that is something totally keep on top of. now, if you look at just the 5s intraday, you can see the obvious move but the move is more exaggerated than the next chart suddenly that's what the spread showed, the jump in rates on ten years as well, 3%.

it isn't magic anymore but what is magic is the continue to monitor how fresh proactive growth impacts the marketplace. that is extremely key to pay attention to. if we want to look at a one-year chart of 10s, you can see we're hovering at basically the best level since 2011 but we are very sticky there and that's key. if you look at foreign exchange, the dollar index is definitely on the right track for 2014. it's improved from basically close to unchanged from last year. as we finished out 2013. but more important whether it was yesterday's positive narrowing of the trade deficit or today's 200 handle on adp, we can see the dollar didn't hold all its gains but it's firm. now, if you really want to look at a currency that isn't as firm, and, we had the blended the unemployment rate in the euro zone today at 12.1 hovering near its record high even though there was last week good news on spain it really isn't digging

into the problem and we need to continually observe. it's all about jobs no matter what continent you're on. now, if you look at how the euro traded, it looks toppy here if you look at a longer-term chart and that's going to play right into the hands of the u.s. more importantly, interest rates over in the euro zone, especially the bund, it didn't hold its bid, it's yields are moving down. more buying coming in on the aggregated unemployment rate and that will affect some of the spreads as u.s. interest rates hold sticky firm. carl, back to you. >> all right, rick, see you in a little bit. rick santelli in chicago. many new items turned the consumer electronics show into a gadget delight. but some of last year's items never made it to market. stick around we'll talk about that. and the u.s. chamber of commerce ceo thomas donahue talking about the state of mesh business and he'll return to talk to us about it.

a lot more "squawk on the street" on the way. there's a saying around here,

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♪ ♪ looking extra fly for the day i die i'm a tough guy ♪ welcome back to "squawk on the street" i'm sharon epperson at the nymex. taking a look at gold prices, gold dipped below $12.20 an ounce and we're seeing more weakness in gold here after the

positive report we got on private sector jobs from adp and we're also, of course, looking at gold unable to break through the 50-day moving average a key technical level that traders have been watching and it's putting further pressure on gold prices and the energy market we've been seeing a bit of a mixed picture in the energy market. and a lot of traders are weighing the cold and what it is doing to production and pipelines and refineries and they are looking at it in terms of the u.s. oil supply situation and the industry report we got from the american petroleum institute showed a big decrease in crude supplies. 7 million barrels and we'll see if the energy department's report is similar. and we're also going to watch the weather reports, of course, going forward to see what that will do for natural gas prices. natural gas has climbed some 20% in the past two months in anticipation of the record cold temperatures we're seeing right now, but we're expected to see, carl, above average temperatures next week and in the coming week and that should continue to put a lid on the rise we've seen in

natural gas. back to you. >> what a week it's been for you, sharon. thanks a lot, our sharon epperson. two days from jobs friday and, of course, that means another chance for you to nail the number and win a prize. tweet us your predictions for december nonfarm payrolls. if you win you'll receive something that's right here on the desk and on time for the new year. it's a world clock. autographed by the "squawk on the street" gang. david, of course, took the very top spot, left very little room for the rest of us. >> you took the bottom first. >> should i really put it on the back? >> i put it on the bottom out of humility. >> you'll have until one minute before the friday release at 8:30 a.m. eastern to submit your predictions. we regularly have people nail it right on the number. but these are very nice clocks, we should point out. >> yes, they are. i want one. but i never get anything. i never get the jackets people have, i didn't get a "mad money" 2000 vest. >> what?

>> i've had it. even though it is made of goodyear tire. >> you have squeezable bulls and bears. >> i love those. >> and the bobbleheads, of course. >> buy, buy, buy, sell, sell, sell. >> we'll see if some of these estimates on nonfarm begin to tick up today, tomorrow after adp comes in 2:38. >> do people do 2,203? >> some will take it to the single digit. >> but it's first come, first serve. the earlier you get it in and you are right because we've got numerous answers that are correct so you have to be in the queue first. >> you don't have to be on the niner/panther game. >> what's the spread there? >> we don't talk spreads. about a point and a half. >> how about colts/new england? that will be interesting, too. >> and andrew luck is the luckiest guy on earth. >> you saw the numbers the ratings for eagles. >> was that something? >> every metric the most-watched television program. >> and you and i were there

having an amazing time with our friend david akers, the former kicker who might have won the game had he been ticking. >> here's what's coming up next on "squawk on the street" -- coming up, come on in, the water is, well, freezing. but don't let that square you. jim cramer will keep you toasty warm with 6 stocks in 60 seconds when "squawk on the street" returns. and ah, so you can see like right here i can just... you know, check my policy here, add a car, ah speak to customer service, check on a claim...you know, all with the ah, tap of my geico app. oh, that's so cool. well, i would disagree with you but, ah, that would make me a liar. no dude, you're on the jumbotron! whoa. ah...yeah, pretty much walked into that one. geico anywhere anytime. just a tap away on the geico app. female announcer: it's time to make room

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dow's awfully close to a triple digit decline. we were looking at a triple digit advance yesterday. cramer and i were sitting here talking about everything's down in dribbles as you said. >> yeah. there's nothing on -- mcdonald's is down a little bit on the downgrade. ibm a reversal, nothing really stand-out. >> we'll keep an eye on that, of course, as the session goes. let's get 6 stocks in 60 seconds. >> kinder has done a great job. it's an mlp and people don't like mlps. >> and humana. >> humana is a red hot stock and people like united health. >> bank of america, jeffries initiated a bunch. >> jpmorgan, investigation, will that send the stock up?

they say buy bank of america. and bear likes jpmorgan. everybody loves jpmorgan. >> rbcs likes neighbors. >> i think this was important because people talk about the oil revolutions, a good article in "the economist" more articles lately. the trading number. you would think there would be more drilling and not lately. >> manitowaw. >> it's a hot one. >> unp. >> my charitable trust sold it what as being a significant announcement. this stock has recovered all the way and the numbers are coming up big. whoa. >> interesting. i wonder how much is coal or not. >> they say it's stabilized. western coal stabilized. >> how about tonight, "mad money"? >> we have programs the most exciting ceo in the country that you may not know. suki. when we first had him on, he

said we'll be exporting natural gas and i didn't laugh. he's got a juggernaut project in louisiana, one of the largest hiring project. i wish the president would go down there because they would see the jobs this man has created. >> unbelievable. and you mentioned the trade number yesterday all about oil. we'll see you tonight, jim. let's get see what is coming up next with simon. >> what does the strong data mean for the markets, fed minutes this afternoon. and we'll look at biz stone, the founder of twitter's new business and we'll have tech guru kara swisher from ces in vegas talking about marissa mayer. that is a show. [ bagpipes play ]

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welcome back to "squawk on the street." our roadmap begins with jobs and the markets. the dow seeing nearly a triple digit decline. but adp data did show us that u.s. businesses added more jobs than expected. is this setting us up for a job friday surprise? biz stone has a new business. we have all the details.

and tech guru cara swisher gives us her take on marissa mayer's presentation at ces. and let's start with the adp job numbers beating expectations and raising hopes that we'll get a decent report from the government on friday. our senior economics reporter steve liesman is back at hq. we haven't seen this sort of figure for well over a year. this is a good figure today. >> it's been a while. and what that means is the risk to the upside, folks, that's market-speak for a friday jobs surprise. that's risen with the adp number. several economists say the number likely to come in higher than originally forecast. just before we came on air we got a goldman sachs report and this are raising the forecast from 200,000 to around 175,000 it appears, they are adding 25,000 to the-out look for friday. here's why. the number is 238,000 and we've been looking for 200 on this number today. this is the private sector they

are forecasting. november revised up by 14,000 to 229. the goods coming in good, 69,000. services very serviceable at 170 and there's the nonfarm payroll the 191 that i suspect will be higher and probably already is higher in the minds of the market. here are the highlights and simon kind of alluded to it. the three-month average fork adp 224,000 and small business adding 108,000 and the construction sector which some feared could be hurt -- might have been hurt by the weather in december, the colder weather, coming in with its strongest number since 2006 at 48,000. here's what economist mark zandi whose moodys.com calculates the number for adp thinks the number means. >> i'm almost positive, this is it. we're off and running. we've jumped to a new level of growth. >> so much optimism by others, but over at bmo, they said the fact that other surveys were suggesting that hiring is

generally picking up, points to upside risk to this friday's payroll report. jim o'sullivan said weather fluctuations tend to affect payrolls and some say the friday number could be affected by that and the bank of tokyo says a king-sized job numbers for a faster 3% economy and that's an important comment in part because the growth numbers have been better and not surprising to see these numbers better as well. and there's the adp, if you are wondering how accurate. running right along with it. plus or minus 30,000 or 40,000 over the past several months. 229 in the prior month and 196 for the government and 238 you can see that's the current number. pretty close. these kind of rapid job growth numbers if confirmed friday in the government report and in lower unemployment could suggest the fed may have to move more rapidly to bring down its bond buying and its quantitative easing program. markets will look at 2:00 p.m. today, guys, to any hints to

shake the fed off what is thought to be the path of $10 billion reductions at each fed meeting. >> good luck with that, steve, the chances are they'll keep fairly tightlipped at this stage. what the minutes we get this afternoon from the december meeting when they triggered the taper but when they also started tweeting -- tweaking the language around super low rates forever and the idea that actually they keep the rates low after they got past the 6.5% unemployment rate. given that they think that their own guidance is so material and we could argue about whether it is or not moving forward, do you think they'll be have cunning ideas as to how they can promise different things in the future? >> i think they feel like they're pulling this one off, simon, if i'm understanding your question correctly. i think they feel as if that extra guidance they gave about rates really offset any concern the market may have when it came to quantitative easing.

when i said we'll be reading the minutes for a hint, that's all we're going to get is perhaps a hint about what's the tolerance around the $10 billion. >> are they waiting for friday for confirmation or is this the ten-year telling us something else? >> the ten-year is well behaved. the jury is still out, on the issue of how the fed affects the bond market with its quantitative easing program. is it the amount that it buys each month or is it the total stock of long-term debt that they've taken off the market? the fed has argued it's the stock, not the flow. and that may be the reason this stock argument may be coming to the fore here. >> all right. thanks, steve. >> pleasure. let's talk more about this because the dow and the s&p 500 are in the red this morning despite thattet this et thi better-than-expected report. and let's bring in our panel. john, i'll start with you because you're an economist. are you surprised that the ten-year eeled isn't above 3%

because of this adp number or could it change on friday or does it matter? >> the ten-year yield at 3% is okay and 5% is okay but once you get above 5% it becomes a concern for stocks. what the ten-year is focused on is the lack of inflation and the fact that the economy is growing below its long-term potential growth rate for seven years now. i think it will take a couple more months of 250, 300,000 job growth to get the ten year higher than it is now. >> what it sounds like the bond market can handle the taper is what you are suggesting. when i look at the stock performance, overall market's down but a lot of the companies that reported earnings are showing very big moves. with the discussion now finally of the taper beginning, do we reamplify the importance of earnings now? do we get back to normalcy and say when earnings happen they really do matter? is this the first earnings season we can say that? >> oh, absolutely, michelle. the whole concept of taper has

been completed in terms of its relevance. we need to now focus on what an economy that's at a 3.5% to 4% growth rate means to earnings. most economists have been able to keep conservative growth estimates because there was no big surprise. we didn't have to worry about if growth broke out on the upside. you now have that problem as an analyst. you now have a problem from a company trying to forecast or give guidance. and the guidance indications will be pushing higher and higher now after the first quarter and second quarter and third quarter this year. those things give you surprises and that's what the stock market is looking for, kind of breakout earnings surprise and that's what's sitting ahead of us. >> identi just can't get over y statement that the taper is factored in. >> yes. >> that simply cannot be the case. >> i disagree. >> let me finish. >> okay. >> because as we go through the year physically -- physically -- you're going to have much less money printing happening day by

day. we don't know what the effect of that taper is now. we don't know -- i mean, you've got to know from the ny mellon out today that talks about the tectonic plates shifting around the world as to which becomes the funding currency. it may be that asia falls out of bed. you know, there's a huge amount of play here, surely. >> you are right at the level of the actual numbers of dollars being purchased and put into the federal reserve. but my point is, you're now seeing the traction that's come from an economy that's on escape velocity. we have plenty of liquidity in the system. right now we're going to run through all of the excess liquidity. at these rates within the next six to nine months. we need to pull this tame e tap completely off or it will bang into inflation by year end. that's a normal cyclical phenomenon, simon, this is how things usually happen coming out of a recession. it just hasn't happened yet and that's why this is such an irrelevant conversation going

forward. >> john, forgive me, maybe i'm on my own with this, but let me just ask you about what may happen in asia. it's 17 years since we had the asian currency crisis. those of us that remember it will remember that it impacted what happened here. today there's a note by standard charter and they are talking about the possibility of a perfect storm this year in asia because the fed is withdrawing funds and funds may flow out of asia because the yen has completely rebased the competitive environment there and because china is slowing down. is all that irrelevant for this market in your view, john? >> it's not irrelevant because i think, you know, the global growth picture matters as well, so we're looking for gdp to be about 3% this year in the u.s. part of that is based on the fact that global growth will pick up. a big part of that, of course, is china. i think in general emerging market economies and the balance sheets across the governments and the corporations are in a lot better shape than they were

in the mid-1990s so we don't see another perfect storm. >> plus, currencies flow, it's a totally tidifferent world. jerry is all in on this economy like he says. what about you, what would you tell people to do right now? >> we're almost in the same spot. we're overweight to consumers and a little bit overweight industrials, a little bit overweight tech. we like the cyclicals and here and we think we're going to get a 10% to 15% gain in stocks this year. >> great, guys. good to see you, jerry and john. >> thank you. the dow is now 67. let's send it over to dominick. >> eke spebarnes and noble is h steady as they appoint michael husband husby. and the old president resigned after poor sales of the ncook

readers. they promoted their nook chief to the level of ceo. back over to you. >> thank you so much. when we come back the first major foreclosure auction took place in atlanta yesterday. we're going to give you a first hand look at what kinds of properties were purchased and who bought them. later on digital dynamo cara swisher gives us her take on marissa mayer. the dow is down 70 points. female announcer: get beautyrest, posturepedic,

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millions of dollars were exchanged for foreclosed homes yesterday in atlanta in the first major foreclosure auction of the year. diana olick is there with a look at the homes snatched up sight unseen. good morning, diana. >> reporter: good morning, carl, over 1,000 properties were sold at auction yesterday. this is one of them that was bought by key property systems. they bought 130 homes yesterday. today we'll find out what's inside. this is kyle sweet, it is his job to break into these homes and assess the homes, and, kyle, we'll take you this way. why did you decide not to get into the front door. >> it makes it harder for entry because of the dead bolt. >> reporter: you decided to go through the backdoor and this will upset you because we're going to see how easy it is to break into one of these homes. let's see it. >> this is the master key.

>> reporter: there you go. >> i'm in. >> reporter: all right. let's go inside. okay. so, this is your garage area. and apologize a little bit for the lighting, but this is what we get. the first time we see it. tell us what you do when you come into these homes first. >> we look to see if there's plumbing or electrical stolen. any damage to walls. >> reporter: careful coming around here. >> this is a mild condition of a home. >> reporter: appliances are in. >> they took the stove and microwave, that's not uncommon. the floors look to be in good shape. there's no damage to any walls. ceilings are still intact. >> reporter: you paid $80,000 for this house at auction? how much -- i know we haven't seen anything, this is literally our first time in here. how much will it take you to fix the home up? >> just for a quick assessment will be between $19,000 to 20,000. >> reporter: there's wildlife in here. okay. we're going to move away from that. what do you sometimes encounter in these houses?

that was pretty easy to break into. >> our assessments can be as much plumbing is stolen and you'll see damage to the sheetrock, plumbing taken out, electrical taken out and our extreme conditions and sometimes ceilings have fallen in. >> reporter: what have you had to do to get into houses? i've heard you can go through the doggie door. >> we use those whenever you need to and window access and the doors themselves in the worst conditions of homes and literally windows that done exist or doors that have been busted open. >> reporter: okay. we'll go as far back here as we can. do they always have the exact number of bedrooms that you think they do or you're told or sometimes you end up without a bathroom? >> typically anything below a threshold isn't accounted for in an assessment and sometimes you end up with more than what the underwriting was. >> reporter: we are dealing with water damage, we don't have smell-o-vision but it will need a lot of work smellwise. once it's finished, you'll get a renter for it. and you'll have it rehabbed and sell it turnkey to another

investor. what do you think this property is going to for? >> easily $130,000. >> reporter: so your net profit is about $30,000? >> correct. >> reporter: how many properties are you going to break into today? >> several. >> reporter: you had a key locksmith and an assessor waiting outside. you'll get to 130 homes today and break in. >> correct. with a team of individuals. absolutely. >> reporter: we'll take the rest and go upstairs. but that's how they do it. that's how these investors are profiting and they say that this trade will continue well into the next couple of years. back to you, carl. >> diana, that's what you call live tv. >> yeah. >> opening capone's vault. great stuff, our diana olick in atlanta. >> wanting to know if the copper wiring is still in there. the winter storms and frigid weather causing thousands of flight delays causing airlines and their passengers more than $1.4 billion and phil bellebeau

live with that. >> we're seeing it draw down a little bit and seeing more normal schedules but overall according to flightaware we're seeing more than 3,000 flights canceled already today or, excuse me, 900 cancellations and delays totaling more than 3,000. jetblue has been getting a lot of attention over the last 24 hours in part because of its decision to draw down its schedule and stop flying out of new york and boston. that schedule should be more normal according to the coo during a conference call yesterday. jet blew has canceled more than 1,800 flights since last thursday and they admit implementing the pilot rest rules was a factor in them deciding to cancel a number of flights. overall when you look at the entire industry, the number of canceled flights totals almost 20,000, delayed flights? more than 75,000. an airline consulting firm has run the numbers and it says the cost to airlines $452 million.

the cost to passengers, and they've got a formula for figuring that out, $968 million. total cost, more than $1.4 billion. if you take a look at the airline index in the last week it has been up. now, it's down fractionally today, and, guys, the reason it has not taken a bigger hit, a lot of people look at it and say, do you know what, it's a onetime event. sure there will be impact on the first quarter numbers for the airlines but they don't expect it to be a huge impact and that's why many analysts and investors are saying ride out the storm ultimately airline stocks are still the place to be. at least that's the belief at this point. guys, back to you. >> okay. thank you very much for that, phil. coming up on the program, biz stone's new biz. we'll tell you about the twitter co-founders top secret new startup, that's right after this break. i'm beth...

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wanted to talk about two apps, the first being jelly which comes from biz stone, it's sort of a visual question-and-answer platform where people can swipe through images and answer questions. reminds a little bit of a km that google bought five or six years ago where people could dispatch questions to their friends, but don't worry because biz stone is behind it. >> what does it do? >> you can ask a question with a photograph. people respond in line giving you an answer, last night i put up two bottles of scotch i had on my counter and i said which one were better to have and people were voting on the stop i should drink. >> how is that different from posting to twitter and asking your twitter audience? >> you could. but it's designed more for visual questions.

but the card format is the big next mobile format which is the bite-sized chunk of information. >> girls, what should i wear today, this or that. >> or which restaurant i should go to or does anybody know what this kind of dog is or that thing. >> let's talk about the other app which is arguably bigger and more groundbreaking called what's app. >> this is like the biggest secret that have been is using. 400 million active, not registered, active monthly users on what's app. it's way bigger than twitter. >> it's a messaging service. international in the making. >> allows you to get away from text messaging charges. it's a huge social experience and it makes a lot of money. after the first year it you pay 99 cents and some of those signed up in the past year. hundreds of millions in revenue. >> it reminded me of when carl launched his twitter documentary and he had a panel of twitter devotees and at the end of the panel session he said to him do you think we'll all still be

using twitter in three or four years and there was a lot of sucking through air through teeth and a lot of them weren't really sure they would stay on twitter. is an app like this the ending of twitter? >> i think many of these type of apps have the ability to subsume another. we at buzzfeed, i'm placing our bets at a lot of places. as a matter of fact, i integrated the what's app, we integrated the what's app button into every buzzfeed page so you can now share any buzzfeed article on to what's app. >> i'm not clear if it detracts or whether it's a social phenomenon that can lift all boats and they can co-exist. >> i think they want to subsume twitter, they are talking about how they want to go after verified accounts and broadcast accounts as well. we chat certainly wants to do that which is part of ten cent the huge chinese internet company. >> who is behind what's happ?

>> independent venture backed. >> how long has it been around? >> it's been around and only 50 employees. it's a shock that no one talks about this company. >> they have critical mass the same as twitter has critical mass, but no one is talking about them. >> it's more of a one-to-one type of messaging platform as opposed to broadcast. maybe that's why it doesn't have the media notoriety. >> i just signed up and they don't sell ads. >> the ceo is clear he doesn't want to do advertising on it. >> one last question on biz stone, there's always the sophomore curse when a new band has a new album. is this a natural juggernaut to twitter? >> i thought about it last night, it's very different. it doesn't look like anything i've seen before. the second album is always so much harder than the first. he's got spark capital behind it. the vc that backed twitter is backing biz stone. a lot of good band members are backing this. >> it's good to see you. >> good to see you, too.

>> wow, look at all these people who use what's app. i had no idea. the party keeps going at ces. and hundreds came out to see yahoo! ceo marissa mayer and she shared the stage with john legend and katie couric and we'll tell you about the star-studded presentation, and even "saturday night live" made an appearance. >> the founders of snapchat last year turned down a $3 billion offer from facebook and a $4 billion offer from google. it's a surprising show of integrity from the guys who invented the app that lets you look at pictures of boobs for five seconds. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts.

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breaking news from the energy department on weekly petroleum supplies we are looking at oil supplies that actually fell in the past week by 2.7 million barrels. this was a decline less than what analysts had anticipated. it was also far less of a decline than the american petroleum institute reported last night they showed a 7 million barrel decline. but supplies rose by a lot more than analysts anticipated a rise of 6.2 million barrels in the past week. gasoline supplies up 6.2 million barrels and we are looking at prices that are under pressure here. we're looking at crude prices down about 40 cents and reformulated gasoline futures are down as well. much bigger-than-expected build in gasoline supplies and we'll

have to see what impact, of course, the cold weather will have on next week's report for petroleum supplies. i'll send it back to you at the nyse. >> all right, sharon, thanks so much. marissa mayer in the spotlight as she gave her keynote address at the consumer electronics show. she focused her speech on yahoo's future in mobile. take a listen. >> this fall for the first time ever we surpassed more than 400 million monthly mobile users. excludeing tumblr, that's half of the 800 million total monthly users we see on yahoo's core sites. mobile has made our daily lives more consistent, more convenient and more inspiring in ways we didn't think possible ten years ago. >> here to help us break it all down live from xres is kara swisher the co-ceo of revered digital. and we have a content sharing

partnership, kara, it's great to have you back. good morning. >> hi, nice to see you. >> i have to laugh because you joked on "squawk box" yesterday, you said she would say the word mobile, she likes to say the word mobile to get the stock up and she nailed it. >> a lot of things. >> what did you think? >> it actually followed on a lot of things we reported on the day before. i don't think they broke any significant news. they bought another small start-up and i made a joke about start-ups. they announced a tech news site which is a attractive by david pogue who was doing the las vegas comic routine. and they announced ad changes making it easier for advertisers, but nothing significant, i would say, nothing massive that i was -- it wasn't groundbreaking i would say. >> yeah. and maybe it's just me. i think you have largely been unimpressed with their efforts and you've occasionally taken a chance to hit them hard on the

outage of yahoo! mail. why are you unimpressed by them? >> i'm not unimpressed. i think it's -- you know, what she has to do now to fix the company, the core company, and not the other -- not having the alibaba stake and things like that is to do the block and tackle work of making the advertising on yahoo! really work and move into the next era and she brought david carp from tumblr who hates the word advertising and he was saying things like engaged metrics which i think was fascinating to watch him do. so they've got to make advertising sort of come alive on yahoo! which is the core business and if they do that, it would be great. >> certainly it's not for lack of trying. not for lack of star power. not for lack of spending money. you mentioned pogue, you mentioned carp, you mentioned katie couric. can this be done or are the structural blocks in place too much to overcome? >> well, you know, she hasn't cut staff. that was an interesting thing. when she was coming in, she told the board that she was going to do that and so it's a very big

organization. and it still makes a lot of revenues and it's profitable. but i think a lot of people think it probably has to be leaner or else they have to find some way to do advertising that really brings in the money the way it happens at google and, you know, what's happening at facebook is really impressive in terms of monetizing mobile. and even though she talks about mobile, they haven't really monetized it in a way that the others have and that's the way they have to go. it's very block and tackle and that's what has to happen, not all this other flashy stuff. >> and it takes time. a lot of the defenders of the stock, kara, argue we forget where this company was two years ago. the board was an absolute mess. nobody wanted to work there. >> yeah. >> they had no mojo. a series of ceos and a revolving door. would you give them credit for that? >> i would give the credit to alibaba and jack ma and the fantastic performance there, because they own 24% of that company and it will go public in a couple of months for a lot of money. i would say fixing the morale has been great and bringing

excitement around it has been great it's just the core business of advertising has to be invigorated and that's where she's aiming now and she talked about yesterday. >> i'll ask a cosmetic question and maybe it will be criticized as silly. but just listening to her speak, we all remember steve jobs and how great he was at doing just that. does she and all the rest of them live in the shadow and she just doesn't sound like a showman up there on the stage. >> well, she was more like an emcee. she was and now we bring out katie couric and now we bring out david pogue and now we bring out the vice president of advertising technology who was not quite as exciting. what struck me, i was at a party last night with lot of movers and shakers, she didn't articulate a vision and she was more handing it off. i was expecting her to make a more visionary speech and that's not her style. nobody can be steve jobs. let's just retire that crown. there's a couple executives that are quite good, but she's not,

you know, that's just difficult to reach that pinnacle of quality of showmanship. >> if we all agree that alibaba does afford her this very long leash to try to get something done, to whom does that credit go to? is that a legacy? >> it's jerry yang and the team that was at yahoo! at the time, sue decker, dan rosenswig, they were all part of the genius deal because they paid $1 billion for it and it will be worth billions and billions and about billions it's the gift that keeps on giving to marissa mayer. >> simon here, good morning. you were very critical of mayer and i asked whether you were ready to call it and say that the emperor had no clothes, but you still continue to raise the question whether she'll deliver on display advertising and do we have anything on the table so far with the stock so far that's

doubled to indicate that she will? >> well, you know, first of all, critical just saying that the advertising business is declining when everybody else is going up, i don't think that's critical. i'm pointing at a fact. so, i don't know if i'm critical or i'm just saying, hey, facebook is going up and google is going up and yahoo! is not going up. it's a factual thing. i think the stream ads are really interesting and that's fascinating what they are doing around stream ads. i think some of the new video stuff they're doing is promising, and so, again, it's a very simple matter of block and tackle stuff. not the flashy stuff. and if it works, it will work really, really well, and we'll see. it's a "time will tell" kind of thing and she's got the time because of the alibaba thing, and i would say in a year if it's not turned around, it's a problem probably. >> kara, always good to get your insight. nice call on the keynote last night. we'll see you soon. kara swisher joining us this morning from las vegas. still ahead, nissan is showing casing its self-driving

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welcome back to "squawk on the street," check out apollo education group up 15% on heavy trading. this is the owner of the online university of phoenix franchise. it beat wall street estimates with its latest quarterly earnings report this as its restructuring efforts successfully improved its profits and it also raised guidance on lower teaching costs. the stock is up nearly 50%, simon, over the course of the past year. back to you. it's a big day for the fed. let's link with rick santelli in chicago. hi, rick. >> hi, simon. absolutely. i found yesterday's trade deficit narrowing a very good positive and it's positively attributable in many respects to energy especially on the export side. i can't see this sector doing anything but contributing more

horsepower to the u.s. economy, especially if we get more of our leaders to jump on board with a more balanced approach to some of the energy and some of the means to remove it that really have taken off. now, when it comes to the data this morning on jobs, it definitely had a two handle over 200,000 and it was an improvement and we could see that by many analysts out there raising their estimates, of course, for the bls. the biggest of the big reports coming out this friday. disruption and disrupters is one of the big topics over the last several years, but one thing about disruption that really underscores all the information we're currently discussing and that is how markets assimilate the data in the form of price action and how that price action dictates interest rates and levels of various sectors that are integral in to greasing the gears of the economy. this is the disruption of market information and it's not in a good way. and i'll give you a very classic

example going over the pond and that is that we've learned the agrigated unemployment rate in europe is 12.1 and we all understand like in the u.s. there are positives going in europe, really with an "s," stabilization. but consider the following disruption and whether it's good or not because it has negative consequences in my opinion. we see it 12.1 on the chart is historic in terms of the level of unemployment, if you break it down we've seen some very positive moves and in spanish and italian debt. the ten year. you look at the spanish ten year, you look at italy, well under 4% around 388. but yet let's really look at spain and look at what's going on in italy. their youth unemployment in spain, for example, is close to greece's. it's a little less than 58%. the point is, why are these yields moving so much lower so dramatically lower? well, is it really because all that glitters is good? i mean, when we see these yields

get purchase in the u.s., it pushes yields down because of a softer economy. i get that. but when it comes to these european economies, funding economies that can carry their own rate, seems to be disjointed with the information we're getting from the southern parts of europe. i think maybe the fix is in. these countries own boatloads of that their own debt and i think that we'll continue to see sponsorship by the central banks. back to you, carl. >> all right, rick, we shall see. thanks so much, rick santelli. when we come back, 2013 was not a great year for m&a but do the telecoms change it at the beginning of the year, barclays chairman paul parker will join us after the break. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings h talking about. state farm.

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welcome back to "squawk on the street." check out shares of riverbed technology, the stock is spiking. hedge fund elliott management is offering to buy the company for $19 a share in cash. you can see their shares around $19.50. sill riverbed which does i.t. and computer networking, the target of this particular buyout from elliott management, and those stocks one to watch. back over to you.

>> 2013 a flat year for dealmaking as our viewers know. could telecom and cable deals trigger an early rebound in merger activity? who better to discuss this than our next guest paul parker, from barclays. great to have you here. >> great to be here. >> at the beginning of the year feeling good about things and yet year after year we've sort of seen, eh, not much, even when we get, somehow, something comes along to derail what otherwise many people believe will be a strong m. scpch&a market? what about this year? >> i think this year will be good, as i've said the past four or five years, all the key variables are there, the positive cattalysts to make the market go up, low interest rates and inflation and this year we have a strong rebound in the economy and a high stock market and things should be good but we've had a dampener over the past several years and the

political framework that people are operating under, whether it's regulatory or taxes or the health care reform i think there's a concern of how much visibility they've and -- >> you put the blame to a certain extent at washington's doorstep? >> look, there are very difficult issues facing the country that have to be dealt with created a bit of gridlock. it feels like people are moving more towards consensus in the center. we've seen that in the past. i think we're not going to go from crisis to crisis. you don't feel it in europe anymore. in europe we saw the overall market up over 8% this past year. that's a real positive. i think you're going to see a better framework which would allow these other catalysts to kick into gear. i am concerned about where the stock market is on a relative basis. >> why is that? >> s&p up 27% this past year. it's not seasoned at this level. if you look at it relative to where the m and a market is and where the economy has gotten to it feels a little disconnected. come people are concerned that's an asset bubble create bid the low environment. >> if you're a seller wouldn't you be more interested in selling, all of time highs and

get a premium on that? >> that's the point. put a premium on something that's already feeling like a premium to the buyers and there's a huge amount of pressure for people to use cash in their balance sheets and optimize their leverage. so, in fact, 70% of all consideration last year was cash for $3 trillion market. cash being sent for 70% of that. so to do a deal today it means you're writing a check and that's an absolute value as opposed to relative value. i think for many people they feel like that's going to be catching a falling knife. do i write a check plus a premium when seasonal -- >> i want to get to some sectors. fo today forest labs, using cash, stock up 14%. >> absolutely. in fact, you're also seeing when deals are getting announced, the buyer stock is going up and the seller stock is going up. you have an unusual -- why isn't that catching on? whys has it been so hard to somehow gender the confidence we've seen in psyccycles of the

past? >> it takes on this framework and an event that occurs throughout the year, whether it's a crisis in europe or sequestration or election, something has derailed people willingness to pick up the pen. feels like it's settling down going forward. >> i find myself wondering what it's going to be this year. >> the economy is getting better. m and a tracks the economy. very closely correlated. lags it a bit but it does track it. i can tell you from the feels we've been working on and what we're seeing in the broader market the level of dialogue that ceos are having with other ceos there is momentum building. >> there is? you're starting to see more? >> no question. the deals will be different. you're going to have more relative value, stock for stock transactions coupled with large share buy backs at the same time so you're putting leverage on, using cash but both sets of shareholders but at the same time you're taking benefit of relative valuation of companies. more strategic deals and they're going to be bigger. i can see the bigger transactions happening this year. >> you and i have talked for many years. you had an expertise in telecom

and advised on the big deals in the past. you advised last year on dish as a attempt at least when it came to sprint. >> yep. >> what are we going to see there? we go into this year expecting time warner cable talking about t-mobile. is there real dialogue that you expect to see in telecom/media? >> you have to follow the puck. the puck is where consumer demand is going. and with the advent of tablets and the demand on wireless mobility, you're seeing a huge demand for bnd weighedth. wireless bandwidth as well as regular wave bandwidth. that demand has got to be ena e enabled by the cable companies, wireless companies. >> that drives it. start with the demarnd for mobile and data on video -- mobile/data/video and get to potential deal. >> categorically. in anticipation of that you saw telecom deals go from 16% of the overall markets to 22% this past year. expect that to continue. now they're big and chunky and they happen somewhat like infrequent events. so whether it's this year or next year, you're going to see

that. the real question is, again, with washington, they want to enable that consumer demand to be met. on the other hand, how are they going to shape the industry. their influence here is going to be pretty important. i absolutely expect to see t and t continue its influence on the overall m and a market but you're also going to see health care. regulatory driven, costs have to come out and you're going to see large cinersynergies being atte to be pulled out because of these large combinations. >> health care is an area. >> health care you're going to see. it was big this past year as well. >> yes. >> you're going to see telecom. now you're going to see the cyclicals come back. national resources fell off this year where they had been very hot for several years as china continues to press its economic influence and engine back up. we're seeing much more activity in asia. in fact, emerging across border deals jumped in the fourth quarter to 40% of the overall market, up to 32% in the full year. seeing a resurgence in cross border and emerging market deals. that's going to drive demand for

natural resources because china, india, brazil are starting to develop, again, westernization and the influence on industrialization that we hadn't seen in this past year. >> i'm going to leave it there. thanks very much. paul parker, global head of m and a at barclays. cross border, that's up your alley, too. >> yeah, and you have a fun year then, david. >> yes. >> good. still ahead, 2013 seemed to be the year of bickering leaders from washington to wall street. can they finally get things done this year? we're going to talk to the chamber of commerce ceo tom donahue about that and get his out look of the annual state of business in america. [ male announcer ] the new new york is open.

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we are two days away from jobs friday. that means another opportunity for you to nail the number and win a great prize. just dweet us your predictions for december nonfarm payrolls. use our handle sidewalk street, #nailthenumber. if you win something, a world clock auto xwrgraphed on the "sk on the street" gang which simon is holding. >> it's heavy. there's not anywhere else on the clock to sign so i'm going to do it on the top over here. >> because you're always on the top, simon. >> thank you for that, michelle.

yes. there we go. >> show everybody. you have a beautiful signature. yes. i think it's upside-down. >> do you want to sign it as well? is she allowed to sign it as a guest? >> absolutely. >> i am a world traveler for world clock, you know. >> sign it on the bottom? >> no. i'm going to do mcc. >> love it. >> i go by my initials. how about that? >> i love it. >> a woman waiting for a currency crisis. >> yes. >> mcsquared we like to call hear hear. you have in the 1:00 before to submit your predictions. they're coming in. a lot of guesses. around the 200 range. some north, some south. goldman just took it from 175 to 200. >> yeah. >> and citi is still below consensus around 175. >> all right. >> what would you do? >> i hate to be a downer, but this stage of the recovery, the numbers ought to be even bigger. that's my only point. >> maybe --

we still have -- we still have -- we're going to talk to tom donahue about the fact that so many people are still underemployed in america. >> can i come back and do a europe report? >> we would love that. see you in 30 minutes. if you're just joining us, here's what you missed earlier on. welcome to "squawk on the street." here's what's happened so far. >> the combination of deleveraging basically being over, state and local fiscal being over. fiscal drag being smaller and less drama out of washington means we could see maybe, again, it's not gang busters growth but 3% growth. >> 238,000 for the month of december. that's the adp's estimate of where the private sector growth will be as reported. that's a big number. >> so are you counting on a good friday? a good friday number? >> i think so. >> really? >> yeah. i think it's going to be -- >> weather aside because that had been some of the -- >> i think things are better. i think things are better. >> alibaba is probably going to

be, when this is the facebook of 2014. and yahoo! has got a big chunk of it and yahoo! is going higher. >> we need to pull this taper completely off or it's going to bang into inflation by year end. that's just a normal cyclical phenomenon. simon, this is how things usually happen coming out of a recession. it just hasn't happened yet. >> we're going to see how easy it is to break into one of these homes. let's see it. >> here's my master key. >> there you go. let's go inside. >> good morning. live here at post flin at the new york stock exchange. let's check on the markets so far. the dow, s&p, and nasdaq in negative territory for the dow down 70 points. s&p flat. nasdaq higher by 12. a slight recovery in two of the

major averages in the wake of the adp number. shares of twitter slipping after cantor cut the rating to sell after it considers an excessive valuation. conversations te constellation brands are selling. good news for the economy this morning after a rating on private sector jobs did beat estimates. is it time to get bullish on jobs? the one and only art cashin is here with some answers. plus, the race is on for the first realistic self driving car. we have an exclusive interview with nissan ceo carlos ghosn who will have one ready for production by the end of the decade. medical marijuana coming to the empire state. andrew comb mow expected to loosen restrictions on medical marijuana in new york. we'll get both sides of the marijuana debate with a couple of lawmakers. move over watch, the ones si

is just the latest piece of wearable technology. we're going to show you exactly what a smart onesie can do in a moment. it is a little bit depressing. trust me. in the meantime, the dow is back in the red despite a strong adp number. what's causing the drag ahead of the big jobs report? art cashin is director of floor operations at ubs. always good to see you. s&p is fractionally up but sort of being weighted by a number of components with mildly bad news today. >> that's it. it's component complications. ibm having trouble with watson. we've got chevron, i think, was downgraded by somebody. we came in this morning with high hopes that it would be the dow which had been the strongest of the averages over the past several days that it could put us into a new high and precapture that first five-day indicator that everybody has been talking about. but the components aren't pulling together for that. >> adp hit this morning and people started saying, all right, when are we going to

start talking about escape velocity. why didn't -- michelle's question earlier, why did we not bust through 3%. >> on the ten year. >> well, i think they're a little hesitant. i think the viewers will want to watch very carefully the minutes coming out this afternoon. there's a great deal of confusion as to exactly what pace the tapering will take. some people are talking about reducing it by 10 billion every meeting. so that, you know, 20 under by the next meeting and 30 after that. other people don't feel they're doing that, that they've only committed through the first ten and then they will review. so we'll be looking into the end trails of these minutes to try and figure out what's there. >> the question is almost still the same. before we ask, are they going to taper, are they going to taper, which is how much are they going to taper, how much are they going to taper? >> i think we're going to look carefully at that. i think that's what's kept the ten-year behaving a little bit. >> today. >> yeah.

and we'll see after 2:00 when the data comes out where we stand on that. i think you get above probably 3.25 and the market will get twitchy. >> the degree bedid see improvement in thorning and the dow coming off the lows could that be some relief that, in fact, the ten year hasn't crossed 10%? >> there is a sigh of relief in that. as behaved, as it were. that's the craze you hear down here on the floor, ten year is behaving like some pesky child. we'll see after 10:00 if things begin to move. >> adp today. the other day it was 2 trade number. before that it was the consumer spending number. when people ask you are you convinced is the economy getting marketedly better, what do you say? >> i'm encouraged. however, i remember last year that in the winter months we saw some real signs of improvement and then around spring when we started talking about tapering, things started to fold up again.

while with the temperature the way it is we look forward to spring, economically i'm not entirely sure. >> we always go through that seasonal transition. it's difficult. art, thanks again. see you soon. art cashin. wearable tech is all the rage that the year's consumer electronics show. nothing you've seen yet is going to prepare you for this next piece of technology. talking about a smart onesie. john ford is live at the consumer electronic show to explain. john? >> michelle, sadly i'm not actually wearing the smart onesie. in a way i am. i decided to wear everything i'm going to talk about this morning. here it is, the smart onesie. the downside of this onesie, it's great. it's got the censor here that tells you how the baby is sleeping. if there are any issues which is important. downside, $100 to $200. anybody who has a had, i got a couple, zero to three months, they with go through five or six of these in a day. that will add up. if you want to know what your infant is doing i guess there's a price there.

i'm also wearing something else that is pretty cool seen here and that is from monster. it's like a whole deejay set up you can literally carry around in your pocket. you can deal with your tracks here to do the matching between one track and another with the beats. and so you can deejay your whole party. show up with this in your pocket. cool. beyond that there have been other things at the show that have been interesting. 4k tv continues to be something that manufactures like sony, samsung, and others are pushing. and while it was sort of pie in the sky last year with really sky high prices and the $10,000 range, the prices have come down quite a bit. and they're putting out more product in terms of camcorders that we're shooting for, streaming deals they're coming out with. maybe this will be real after all. of course, we've got cars, google had the deal with audi and others to put android in the cars. we're seeing that start to push forwarded. and then all of the wearable

stuff, not just for babies but for grown-ups, too. the fitness bands, health trackers. a lot of that seems to be the rage. it reminds me of 15 years ago when the postpost-pc era starte. mp3 players and webcams. turned out to be the ipod that defined it. now we're seeing something else. >> can we go back to the onesie? that green thing on the front is not a patch. it's not a graphic. actually does something to put the baby -- you put that on the baby and it tells you what? >> it's not a joke. it's actually technological product? >> absolutely. there's an intel chip in here. yeah, it's like a mini computer that attaches to your baby's hip. and it reads what this onesie is telling you about this baby's motion and also about some vital signs. so if there are any issues with heart rate or something like that, it could alert you. and this isn't the only technology that does this.

there are other technologies that are seen with ankle censors that will tell you similarly about a baby's oxygen level. a lot of attempts being made here. pricey. but attempts being made here. this is $100 to $200. now, clearly, this part, that detaches, is an expense that you wouldn't have to buy over and over again. but the ones si part and the little -- >> that is all upper east side in grenich. i'm sorry. >> peas all over it. >> i thought you were going to refer to a headline today where a onesie will allow a smartphone to read a bedtime story to your kid. that is truly disturbing and got a lot of push back on the web today. jon in has las vegas. >> when we come back, is 2014

finally the year that our leaders stop arguing and start getting things done? that's what chamber of commerce ceo tom donahue is push for. he will give us his outlook for the state of business in the new year. but first, rick santelli, what are you watching today? have. >> i'm waiting for that twosie. we're going have charles beater man beaterman beaterman on bottom of the hour. something simple yet huge, supply and demand. whether it's stocks or bonds, why it makes a difference and why it's affecting pricing. bottom of the hour. if you've got copd like me... ...hey breathing's hard. know the feeling? copd includes emphysema and chronic bronchitis. spiriva is a once-daily inhaled copd maintenance treatment that helps open my obstructed airways for a full 24 hours. spiriva helps me breathe easier. spiriva handihaler tiotropium bromide inhalation powder does not replace fast-acting inhalers for sudden symptoms.

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[woman]don't touch my side! . dow is down 80 points. consumer discretionary being led to the downside by jw penny this morning. dominic chu. dom? >> the department stores, jcpenney is one catalyst. it's not in the s&p 500 anymore. shopper traffic is saying mall traffic was down 15% in the holiday season. bearish on jcpenney which didn't provide hard numbers when it said it was please with performance over the holiday period. you can see a lot of the stores, kohl's, nordstroms, still down on that news. negative catalyst overall. michelle, back over to you. >> big move for jcpenney there, wow. u.s. chamber of commerce out with the annual state of american business. sxwloining us first on cnbc is tom donahue, ceo and president

at the u.s. chamber. great to have you on. tell us, what is the state of american business. >> american business is doing better. we should end the numbers on 2013 will be 1.8 to 2% and in 2014 i think we'll get up to 3% growth. we still have a lot to do to provide opportunity to get more jobs but we've got the tools to do it with. a strong energy situation, expanded trade getting done. things look positive and we're trying to build on them and say to the government there are things you should do and things business should do and we should do them right now. >> let me ask you this. i'm reading through your speech that you gave. when it comes to the primaries and the general election, you say, we're going to support candidates who want to work within the legislative process to solve the nation's problems.

is that code for not supporting tea party candidates? >> actually the tea party are good people. what are the original tea party want? they wanted cost controls. they wanted sensible taxation. they wanted trade. we support that. it's what we believe in. it's a group of people that have hitchhiked their -- hitched their trailer to the tea party name and want to come washington and shut down the government and not pay our debts and do that sort of thing that we're not going to be supporting. and we're going to basically support people that believe in the enterprise system and believe that opportunity is fundamental to people succeeding. and i think you've seen that in the past but you'll see more of that from us this time. >> tom, you know, the take in the journal today is that economic is the new flash point. they say that both sides have agreed this is a problem. we're going to hear a lot from cantor and ryan and the

president this week about mobility. where are you on minimum wage? where are you on ui benefits and should they be extended? >> they're going to extend unemployment benefits. they've got the votes in the senate and they'll work a deal with the house. but i would expect three things on that. a, they'll find a way to pay for it. b, it will be short term because we're reporting the increase in jobs and the increase in economic growth. and, c, i think because the head of the council of economic advisers really believes this, that we'll find ways to limit expansion of it in the future. >> and how about minimum wage. that's going to be apparently a big theme in the state of the union. >> yeah, i wouldn't be surprised. minimum wage is an issue that many of the states have begun to change their minimum wage. the real issue for us is not whether they increase it a little bit, which we have opposed. it is what happens when that happens. i mean, what does it do to

people, hire fewer people. we've all been through that argument. i look forward to that debate and hope we can find a reasonable way to deal with it without going ahead with the major increase in minimum wage on the federal level. >> you make a big push for immigration reform. do you really think it's upon? >> yes. it will happen. >> how? >> i'll give you a reason. i'll give you a reason. democrats and republicans alike want to go home for the elections having done something. and we have an agreement already through the senate. the house is taking it up piece by piece and committees have been very positive. the speaker is -- is dealing with this thing in a thoughtful way. i think by the fall i'm very hopeful that we can put this together. the house is going to push it hard. the faith community, the unions. >> i like your optimism. let's see. >> i'm irish. >> that we knew.

mr. donahue, great to have you on. great to see you. >> thank you very much. >> see lou you later rnlthsz the self driving car might seem like a thing of the future but it might not be that far off. nissan says it will have a self driven car by the end of this decade. and nissan's ceo carlos ghosn will tell us more about that in a moment when "squawk on the street" -- >> i'm so excited about this segment, carl. i can't wait. ♪

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nais nissan stepping up the game raising the first autonomous vehicle. phil lebeau joining us with a "squawk on the street" exclusive. >> let's bring in carlos ghosn, chairman and ceo of nissan. carlos, you're in a new simulator that is part of the research you're doing into autonomous drive vehicles. give me your perspective based on what you've seen so far, how

close are we or are you to developing an antutonomous driv vehicle? >> look, we are very close. you know, that this is a technology which is made of different bricks. there are many components in it. most of the bricks are ready. you're going to see them already in some cars coming to the market. now, the totally autonomous vehicle, our expectation is put on the market for mass marketing in 2020. and we feel very op mystic about it not only because of our own development because of everything that we're seeing taking place here in silicon valley. >> any chance you would move that up based on what you see with your work and what others are doing in the silicon valley? it seems like the advancements are coming rather quickly. >> yeah, a lot of development, a lot of ideas. you know, a lot of new opportunities. i'm extremely optimistic about it. there are a lot of problems concerning reliability and that in my opinion would take some time. so i would say 2020 is a very

reasonable date for the moment. i don't think it's reasonable to project something shorter. >> carlos, michelle has a question that shed like to ask you. michelle? >> it's one thing, sir, it's great to have you here and i love this topic. it's one thing to have the cars ready. but are the states ready, are the regulations ready, are the roads ready? are you not dependent on a lot of state and federal infrastructure to allow driveless cars? >> yeah, we will. we are dependent. and you know, we are already discussing with many governments, many states because this is going to be a global technology. we have already agreements with some cities in the united states. we have agreements in japan with some cities and states in order to be able to do some testing on the roads, it will require a lot of agreements but i think there is a lot of appetite for this kind of technology because people understand that this means better safety, this is

better product tufity, better quality of life. everybody is sbre interested an lot of agreements will be signed. >> carlos, i'm curious from your perspective. i'm sure you've seen the ihs forecast in terms of the growth of autonomous vehicles. they're saying that by 2035, 9% of the global market, more than 11 million vehicles, will be a autonomous, self-driven cars. do you agree with that and do you see the ramp up that quickly once we get passed 2020 or so? >> oh, i think the ramp-up will be pretty quick and i'm going to tell you why. because you have to look at what do autonomous car bring to the market. first, safety. i think our objective to make zero fatality, zero a very high limitation of the number of accidents comes with this technology. so there is a lot of interest in developing this technology for the purpose of safety. second, people on average spend

two hours in a car globally. in the united states, depending on the states where you are, you may have different average but global is two hours. during these two hours there's nothing you can do. you're not supposed to do anything. with this technology you gain back two hours a day which is huge in terms of productivity and quality of life. third, more than 50% of babies born today are going to live more than 100 years. well, when we see that the lot of people start to be impaired from driving at 75 or 80 years, this technology is going to allow people, senior people, to continue to drive even if they hit 90 or 100 years old. so in terms of quality of life it's huge. the needs are here, the technology is getting ready. i think the ramp up is going to be pretty quick. >> carlos, one last question. i want to ask you about the nissan leaf. you had sales growth of 130% last year here in the u.s. where do you see this vehicle going in terms of overall sales let's say over the next two or three years. do you get up to 50, 75,000

vehicles sold in the u.s.? >> oh, yeah, we will -- you know, we are now on a trend of 3,000 cars a month in the u.s., which is about 36,000 cars. i think the next step is moving it up to 4,000 a month, which is going to be approximately 50,000. i'm not so worried about the sale of the cars because i think the technology now is accepted. people see the interest. our main concern is the speed at which the development of the charging infrastructure is taking place in the cities in the states at the level of the country. there is a lot of good will but still we need a little bit more speed into implementing this infrastructure. worldwide every sometime, a city, a government, a state, a country has put all the means in order to develop the infrastructure within the sales going up. so the volume of sales is going the depend a lot on the

development of the infrastructure of charging. >> carlos ghosn, chairman and ceo of nissan renault at sunny veil, california. we're talking about the future, electric car, self driven cars. the growth is coming. the question is when do we see that big ramp up in both. back to you. >> super cool. super cool. one of the crimes in the future, they think, phil and car, cyber gank center gets into the software of your car and programs it to drive off the cliff. hear of this? >> long game, that's for sure. >> right. >> let's get there first. thank you, phil. that was great. in a couple of hours from now governor andrew cuomo expected to green light the use of medical marijuana in new york. what is the future of legal pot in the empire state? plus, the bells are about to sound across europe. just a few minutes left in their trading day. we're going to have a close and details on the impact in the usa right after the break. welcome back. how is everything?

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the european markets are closing now. >> some discouraging macro signs out of europe today. simon hobbs here at post sunshine with tnine with the details. >> we're at the 5 1/2 year highs here. they lap up peripheral europe, right or wrong. i just want to show to you -- show you we have a problem with retail in the uk, specifically there are winners like the

online super market. it warned it can't compete with the supermarkets. supermarket chain in the uk saying the consumers are likely to tighten the belts moving forward. the big picture in europe, the big take away is this very strong rally that you continue to get on peripheral bond markets in europe, not the least ovk because islands came back and the market was issuing debt successfully yesterday. the bond market rise, the yields fall. i will show you, for example, italy and spain, spanish ten-year yield is almost back to the level that we had before the crisis hit. who holds a lot of government debts, the banks in europe. therefore you see a lot of weaker banks are also surging and, in fact, now, for the year the bank index in europe is up 4 1/2%. gaining there. kbc, belgium bank today paid it back to government ahead of schedule so it doesn't get

penalized. the other stock market that is notable is the greek stock market. for the year now, up 10%. today, of course, is actually the day that the greeks take over the rotating presidency of the european union. security is very tight in athens. a lot of the city locked down in anticipation that some of the left wing groups may attempt to disrupt the celebrations tonight. the other thing to say, guys, is that tomorrow, of course, is the european central bank meeting. now with 18 members around the table because there are 18 countries that have joined the euro. latvia is the last one in. pull up the draw bridge behind you. >> a wrap of what's going on in europe. >> big party over there. trust me. in less than two hours, new york governor andrew cuomo will take the stage to deliver the state of the state address during which he plans to announce the legalization of limited medical marijuana use in the state. the governor had opposed it during his time in office. let's bring b in new york state

conservative party chairman mike long who is long opposed any sort of marijuana legalization. it's great to have you. thank you for coming in. >> good to be with you, carl. >> i know you're against this. why do you think cuomo has reversed himself? >> well, my real reason -- the reason i believe that the governor has flip-flopped is i think he's trying to deal with his national liberal base and catch up to colorado. i think if colorado didn't do what they did, he wouldn't be doing what he's doing today. he did the same thing on the safe act. we had the tragedy in connecticut. he jumped the gun and wanted to be the first out of the gate. this time he wasn't the first out of the gate, but he certainly didn't want to be left behind. >> what about also the election of -- what about the election of mayor deblasio in new york? he has become the spokesperson

for the far left and maybe he wants to catch a little of that wind? >> i think deblasio's win is pushing the governor a little bit further. but clearly, he's trying to keep his national image as a liberal icon. >> of course, you mentioned colorado where you could argue, i suppose, it's a slippery step from medical to recreational. is that what you think would happen to new york? >> that's exactly what i'm -- you know, the governor had his health department study for fast past five years. they haven't come out with a determination. but yet the governor was opposed to medical marijuana last year. he didn't have a study to see what the benefits of this experiment is going to be. and i think it's just the beginning of the slippery slope to move down the road and

realize the dispension of marijuana not only for medical purposes but recreational purposes. >> mr. long, as you know, there's an arm of the conservative party who actually wants the legalization of marijuana. right? the joke about libertarians, other conservatives who want to smoke pot. what do you say to the arm of the right wing that actually is supporting of legalization? >> look, you know, on this particular issue there are certainly libertarians that want to see government allow people ingest what they want to ingest. i think it's the bad signal for our society. i think it's a bad signal for our young people. i don't think anything good can come out of this. this is the beginning of a down spiral move to legalize marijuana. i think it's bad. i disagree with those conservatives that disagree with me. >> really quickly, mike. this is passed the assembly a few times.

always stalls in the senate. can it happen this time? >> well, i think the governor has bypassed the senate. he's doing this by executive -- and he's not asking the legislature to do anything. this is old war hafs passed back in 180 and i think it was never enforced or never participated, never -- they never allowed it to happen. so he's by passing the legislature which is another thing i disagree with. >> mr. long, thank you so much for joining us on this. we want to get the other side of the debate now in here. mike long was against the legalization or what was done here in new york or what we expect to happen today in new york. our next guest is the leading sponsor of medical marijuana bill that's been stalled in the new york senate. let's bring in new york state assembly member richard gottfried. the governor is reportedly going to take a step that doesn't need the state legislature. i assume that's nod good enough

for considering you have a bill that would amplify its use even more. >> well, he's taking a step implementing what the legislature did in 1980. you know, thousand -- turns of thousands of new yorkers have -- suffer with really serious medical conditions that whose suffering could be relieved and whose lives could be -- could be made longer if new york would catch up with the 20 other states that recognize the legitimacy of the medical use of marijuana. you know, the fact that governor coke m cuomo who has been re-examining his position on this issue for a couple of years now has now put his stature in support of the legitimacy of medical use of marijuana for really seriously ill patients. i think moves the issue enormously forward. he's -- >> okay. >> it's terrific that he is, as

an interim step, is implementing this 1980 law. now, that law is very limited and cumbersome. so we're hoping that he will work with the legislature this year to enact a comprehensive workable bill. >> so under the current thing that we expect him to do, only 20 hospitals in the state, very limited uses, cancer, glaucoma, et et cetera, a bill that you're talking at would expand the use. what do you say to critics who argue this is just a step towards full legalization, that your mission is actually to be like colorado. is it? >> no. there are -- you know, there are drugs that are highly addictive and extremely dangerous that are legally prescribed tens of thousands of times a day. our law has always distinguished that there are drugs that are perfectly legal for medical use but you can go to jail for a long time if you use them for

recreational use. it is long passed due to acknowledge that with marijuana. you know, the lessons to be learned from colorado and several other states is that with good strong tightly regulated legislation as we're proposing in new york, you can have a real state-of-the-art system in which marijuana can be quite properly and with great limitations used for medical use as we do with any number of other controlled substances. >> that said, one final note. even those in colorado, i would argue who are in favor of legalization say that medical use does it afford you the potential for abuse, if you want to get your hands on it, it's easier to get your hands on it. >> well, you know, in new york, if you don't mind breaking the law to get marijuana for recreational use, that's really as easy as pie as has been for many, many years. anybody who would go through all of the hoops of a medical

marijuana law to get a couple of joints to get high would be an idiot. all you have to do to get a joint in new york is go out on almost any street corner and the level of offense you're committing is, you know, like littering. >> i have no idea what you're talking about. >> right. >> thank you, sir. >> so nobody would use a medical marijuana law to get high. certainly not in new york state. >> all right. mr. chairman, thanks so much for your time. >> you're very welcome. >> it's a good debate. one that we're not done talking about by any stretch of the imagination. >> that's a bit of an exaggeration, isn't it? on every corner in new york. >> depends on what part. >> in the past few years the consumer electronic show has been a launchpad for some really popular technologies but despite the hits many don't often pan out. check out this laser scope all of the way back in 1990, for instance. >> that's awful. >> we're going to take a look at some of the other interesting

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in stocks. she's going to tell you where she sees the best opportunity right now. shares of micron having a huge day after a big 2013. is there even more room to run for this already high flier? all that straight ahead on "the half." see you in 15. >> scott, looking forward to it. let's bring in bob pisani with a look at what's moving here at the big board. >> michelle, two clear winners so far in 2014. two sectors. put them up. health care and financials, hospitals doing a little bit better. little bit better clarity on obamacare, impact on them. yield curve would steepen. these are banks. that's a big if right now, whether or not it's going to dramatically help the bottom line. that's what's moving them. starting earnings season tomorrow. alcoa will report. it's amazing how hopeful guys are. long short equity hedge fund traders are by and large. they're hopeful for improved guidance si. they see economic data improving in the u.s., better european data. they talk about more dividend increases and buybacks continuing in 2014. here's the problem i have and this is true.

guidance is still conservative. i'm not hearing great commentary about 2014. it's still a little early. and china is a major problem right now. take a look at the fxi. we're essentially at multi-month lows. declining for a month and a half. the start of the year has been terrible. down more than 6%. look at the impact as this week china has had on emerging talks. thailand, south korea, russia, india, brazil. five trading days we're down 6% and even in south korea. it's a problem. it's been impacting our commodity market, commodity stocks, for example, steel stocks, for example. coal stocks are down. largely a china play. you see it impacting our market as well. the other problem i have is that the guidance is still very conservative. i don't hear a lot of positives. look at the guidance. three good earnings reports today. we have micron, very difficult to model. they knock the cover off the ball. that's a tough run to model. constellation, all beat. the only one that actually gave real commentary on 2014 was

constellation. you can see that stock is up 8 1/2% on that particular comment. so it's still a little early, but the expectations are very high that they're going to start making more positive comments and stop saying we're not sure about what's going on in europe. remember, michelle, last quarter, second quarter of 2013 and third quarter 2013 all of them is saying europe continues. if we continue to hear that kind of commentary is going to be a little bit of a problem in 2014. back to you. >> yeah, absolutely, especially with that inflation data we've seen out of there. thanks, bob. for more on the markets let's get to rick santelli in chicago this morning. hey, rick. >> hi, carl. you know, there's a couple of issues that are the most important trying to make strategic trading decisions. supply and demand is one of them and risk versus reward is the other. i want to explore both of those dynamics with our special guest, hi, chuck, and happy new year. >> listen, supply and demand,

whether you're looking at the treasuries which the fed owns trillions of along with mortgages that are not going to be trading any time soon or all the buybacks going on in the equities. supp supply/demand goes a long whey to explain the anomalies, interest rates, level of stocks in the economy. tell me what trimtabs and some of the number crunchers such as yourself have discovered about the flows in the mutual funds and etfs about buybacks. >> well, as we've said, all there is in the stock market shares of stock and money flows in and out of checking accounts. earnings have never academically been proven to predict stock prices but supply and demand does. so far this year there's been, believe it or not, very little new money going into mutualquit. the first three days we had data for or maybe all inveers shot

their wad toward the end of last year. huge amounts of money went in last year. on the other hand, supply and demand of new shares of stock last year companies announced over 500 billion buybacks and cash takeovers greater than the amount of all new offerings, secondaries, and insider selling. half a trillion dollars is like 2 1/2% of the overall market cap in announced corporate buying. now, that's double the rate of corporate buying the prior year and the all-time record was '07 when the market peaked 925 billion of more corporate buying than corporate selling. so compare to half a trillion last year, last year it was 300 billion of inflows into etfs and mutual funds. so corporate buying is the big -- the key. and so what are corporations going to continue to buying this year shrinking the float? if they do that and to the extent they have, then stocks will go up regardless of earnings or anything else. >> excellent, charles.

right at the click of the last second i have for the spot. thank you for number crunching for us. and our crewers. and have a great day. thanks for being our guest. gang, simon, back to you. >> all right. thank you, rick santelli. i'll take it. there's been a lot of hype over the cool gadgets at the consumer electronic show this year but it's important to remember a lot of things making headlines this week actually end up going nowhere. the duds from the past few years just to we remind you of that next. mine was earned orbiting the moon in 1971.

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it is day two of the consumer electronics show. it's been the launchpad in years passed, a lot of them don't end up panning out. joining us live with more from las vegas, lauren. it's great to have you. good morning. >> good morning, carl and michelle. how are you? >> we're great. i mean, i'm fasz nacinated by t concept because we think of it of this launchpad for can't fail technology but there are going to be some misses if there are some hits. what comes to mind? >> well, i mean, where can i start? as you mentioned, ces in recent years has been a launchpad for some pretty cool technologies but at the same time every year we see a lot of stuff thrown out there that either is very high concept and really isn't meant to come to market any time soon or the company says it coming to market sometime in the year and it doesn't really make it. >> for example? >> for example, last year higher

put out a transparent washing machine on the show floor. this was a washing machine that you could see through entirely. it was really crazy. i think that the tech blog is motto called it appropriately the most bizarre one we will see at the show. sure enough, i not coming to market any time soon. high sense also put out on the show floor a transparent 3d tv display. you might think, what am i going to do with a see through tv. it was meant for commercial purposes. the idea was that you would put real physical objects behind the transparent display and then sort of super impose 3d images on top of it as well and maybe somebody in the retail or advertising space would get use out of this. sure enough, it was purely conceptual. behaven't seen it on the market this year. we see lots of tablets out there that don't necessarily come to market. the list goes on and on. >> the tablets, vizio, android tablet, panasonic had a tough

pad tablet that i guess won't ship for a while. you would think that we know what tablets overall are doing. why is that not fertile ground? >> tablets have become a popular product that basically everybody is trying to get their own to market. you're seeing a lot of -- not necessarily copycat tablets. seeing ones that maybe don't video the highest end processors, right? it's sort of companies are slapping together what they can saying we have a tablet, we have a tablet and racing to put it out and it doesn't always necessarily come to fruition. >> lauren, we showed a photo earlier, a woman wearing this thing on her head that looked almost like a modern day bong or something, weird laser scope thing. what was that supposed to be? is that from this year? the graphic on the screen behind her looks really old. >> i actually didn't see the image so i'm not quite sure which one you're talking about. >> okay. it's susan bach at ces in chicago. the konami laserscope headset. >> actually, that actually

predates me. but i'm really -- i have to say i'm really happy we are not all walking around wear that one. >> yeah. >> let's call it a blessing it didn't come to market. >> she looks like she's playing a version of donkey kong. >> it looks like some of the virtual reality gaming headsets we're seeing now. >> all of these kids under 30 don't remember how bad it was when graphics were so junkie. >> lauren, it is a reminder, if this show is about the internet of things as some have said, there's going to be a limit to where you can take that. like this blue tooth enabled toothbrush that someone talked about that reminds you to brush in between visits. >> yes. connectivity between things, internet of things is a really big theme at the show this year. and certainly there is probably going to be a limit to the number of internet connected things we want in our lives. and i'm going to venture and cia that maybe the blue tooth connected toothbrush might be one of those things. i don't know. there's also a happy fork out

now that tells you when you should stop eating or if you're eating too quickly. you know, we'll see. i should cia, too, i'm kind of being a debbie downer and throwing cold water on the whole thing. there are some pretty cool technologies that don't necessarily make it to market in the next year or two, they stimsz end up integrated with other technologies an appear in another way. 3d tvs come to mind. a few years ago they were like a huge thing and tv makers really pushing them and now maybe 3d tv isn't the big thing but you're seeing it as an ancillary feature. chrome books come to mind. now they're popular. so sometimes we see things come to the market in a different way. >> lauren goode, tech reporter, thank you so much. reminder, nbc news group is a stakeholder and we have a content sharing partnership. marisia mayor taking the stage last night. some of the most important things she had to say. that's coming up next. [ male announcer ] legalzoom has helped start over 1 million businesses.

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as we look to the future of mobile we believe home screen should be smarter and more personalized. >> that's marissa mayer at ces last night. a year ago today, 19 bucks. michelle? >> a lot of people despite that doesn't give her the credit for the move in the stock. >> thank you for coming in. >> let's get back to headquarters. wapner and the halftime. >> carl, thanks so much. first half now in the books. here are the highlights so far. >> 238,000 for the month of december. that's the adp's estimate of where the private sector -- what private sector will go through. big number. >> green light has been buying a position at micron. we're excited to have some of these newmicron. >> this is not an insignificant acquisition for forest labs which i believe carl icahn still has board seats. acquire stock prices continue to go higher and be well received. >> i think jcpenney bit of