it's a pleasure to be here. >> we're a fan of you. one word for 2014, what do you think? >> i think steadily improving economic conditions. >> okay. >> and growing stock market. >> we will see you in davos. that does it for us today. make sure you keep it locked on cnbc all day. it's time for "squawk on the street." ♪ mustang sally >> good monday morning. hope you had a great weekend. welcome to "squawk on the street." i'm carl quintanilla. david faber and jim cramer. earnings from the big banks headed our way, detroit auto show, m&a action, target ceo speaking to cnbc. ten-year down to 2.85 ahead of inflation data and regional surveys later. europe hanging on to green as

well. road map begins with retailers suffering the same fate as target. neiman-marcus is among those whose customer data also breached. hear what target's ceo told becky quick, next. >> ford unveiling a big change to f-150 pickup truck, using aluminum in the body. alan mulally will join us in a moment. suntory planning to buy u.s.-based beam for $14 billion after accounting for assumed debt. target is not alone when it comes to data breaches. neiman marcus says mack hacker may have stolen information. in an exclusive interview, target ceo telling becky quick, the retailer's accountable for the data breach that affects 10 million customers. the full extent is not known but malware installed on the point of stale registers. target working with law enforcement to determine who did

it and when it was done. also steinhafel says target has work to do regaining customers' trust. >> challenging times for target, i can tell you that. it's a real. . in the gut. throughout the crisis, we've had a singular focus on doing the right thing by the guest. we're a company that has been here for 51 years. and we've focused on the guest and made the guest our priority for that entire time. we knew -- we know that our guests trust in us is shaken. but we know they love our stores, they love our brand and we're going to learn from this experience and work really hard to become even a better retailer over time. >> nice job by becky, guys, talking to him about what they knew and, clearly, they did know before they let us know. his excuse, they had to get call centers and stores ready. digging is not done, by any stretch. >> no. this has become, when you say neiman, it's commonplace.

you hear people talk, stevenson, saying we'll get information on your phone. you know, i'm losing trust in the system. i don't want to put all of my information in this phone. they already got my information in credit card. i do believe this is kind of like when i listen to what happened to a-rod, they're all juicing. maybe until i find customers literally going to someone who hasn't been hacked, it hasn't happened yet, i'm not going to pay as much attention. the goldman upgrade to target's working. target's going higher, not lower. >> right. i mean, listen, this is a concern, a continued concern, only growing, as time goes on, one would imagine. think about the different venders who have your credit card information. >> everybody's got it. >> it's everywhere. and we know the thieves are only getting more sophisticated, as are the defenses against them. but all they have to be right is once, as they often say, in terms of attempts to make to try to breach a network or anything else. not to mention, there's a lot of

cost here, of course, for the credit card issuers and that's something of a dispute in huge breaches like the one we saw at target. >> i don't want to make any investments based for or against this kind of story. i continue to also believe that, when you get your credit card, you feel terrific, not because of the retailers but because of the banks. everyone hates the banks, completely hatable. i'm indicting right here, i'll get $2 billion from jpmorgan, before i file the indictment mg if they pay me $2 million, i'll drop the indictment. in the end you get your credit card, if there's a problem, it's adjusted. it's a great system where the banks protect you. i think the banks don't get enough credit. if you say something good about the banks, you might as well be trying to stop traffic, i don't know how, in lincoln tunnel, trying to redirect traffic. i'm not going to get into receipt direct traffic game. >> certainly not doing much. the target story's not doing much to make up for the weakness in consumer names today. bad news out of express, bad

news out of soda, bad news out of lulu, cutting outlook for the fourth quarter, january meaningfully weak. >> wow. >> negative comp, slow to single digit. >> my favorite, bonton, i remember when it was hess. adverse weather, treacherous travel conditions, december. i mean, lululemon did well in december it wasn't treacherous. you read these releases they all have the same category, same qualifications, which is that where was the customer? this that is traffic issue that howard schultz wrote a week ago, now we're starting to hear about it. no issues at macy's. why? maybe if omni channel, macy's is combatting against amazon. i think lululemon, new ceo, clearly problems there. express, very well-run company, not doing it. l brands, very well -- the very

well-run companies are being hit. >> they are being hit. >> they are being hit. in the mall. >> those who jump to the larger thesis, a major diversion where retail's going, it's really just about online and amazon and others competing. >> it is. >> but you can do that when you think about macy's and, therefore, done that argue against the idea that it isn't just about execution to getting it right? >> i think that macy's somehow, the omni channel's working. i think this is store traffic. people didn't shop as much. now we can blame the weather or say it's something secular. they shop on amazon. >> walk around with mobile devices and, right -- >> check that. >> going to the mall -- >> does that explain soda? soda's going to open 16, 17. >> we should have figured that after we saw bed, bath and beyond did a bad number. bed bath sells a lot of the soda system. people like our friend herb greenberg, he's been saying it's a matter of time that soda hits the wall. soda really hit the wall.

and you know it they used the term disappointing to describe themselves. typically you let others describe that as disappointing. >> margins hit, higher cost, hope to restore historical margins some time in 2014. express news, what's disconce disconcerting to some, it's not a comment on holiday, it's about january. january they're saying, meaningfully weak traffic. >> i know. i met with express -- i was surprised stock isn't down more, but it's a well-run retailer. and these are all about traffic. that's a big mall base play. honestly, sodastream, a lot of hype. i think there's a lot of hype involved with sodastream. it's a gadget, i think the gadget, everybody who has one, i personally believe has one, and i don't think, by the way, let's be honest, soda has peaked. take a look at -- one of great conference calls -- you know i like clause -- hating me for

liking him. i don't like the number but i like clause. clause is overrated because of you, fine. sister, mother. but here's the problem, he said that stop it -- he said soda's doing badly. but guess what's doing well? >> tell me. >> monster. monster beverage. monster! those kind of drinks. >> monster's doing well? >> yeah. >> i would have thought the wellness side but that ain't wellness. >> teenage, i think a split between vegans and people who like high octane. like my nephew. >> namely you. >> i do not drink -- one of those five-hour energy drinks. i tried it on a friday and went to bed on monday, that was it, the whole weekend. >> save your energy for this. ford making a big splash at the detroit auto show with its new f-150 pickup truck. the best-selling vehicle in the country for 32 straight years. will this lighter aluminum truck be what ford stock has been

looking for? phil lebeau joins us with alan mulally, ceo of ford motor. good morning, phil. >> good morning, carl. as we talk with alan mulally here, you just showed the new aluminum f-150, and a lot of people at home are say, is it durable enough? will it hold uf? give us perspective on testing you've done there. >> sure. also i know a lot about aluminum, as you know. >> that's true, with your background. >> to your point, we just revealed today. response has been fantastic. a value proposition for the series is the aluminum cab and box. it will save us over 700 pounds then we can downsize engines, improve fuel efficiency. aluminum, pound for pound is tougher than steel. in the past we've not had volume and pricing has been higher. we'll introduce on the highest volume vehicle that would benefit from it the most. i think customers are going to value the toughness. >> how close do you get to 30

miles per gallon? many have said it's the holy grail mark. >> our objective to lead in fuel mileage. >> you're at 23 now. >> we'll continue to do that. we'll release those closer to when we release the vehicle, the actual numbers. remember the ecoboost engines improve fuel feshts efficiency >> you won't gives a firm name? >> we won't release that today. >> our first chance to talk to you since you made the announcement last week, i'm done considered for the possibility of ceo of microsoft. not getting into details about the conversations, is what you said, but you wanted to remove any kind of question about your future at ford. do you feel like the last several months were a distraction, as this was playing out with microsoft? >> no, i really don't, phil. the ford team has been laser focused. but clearly, i'm very pleases to get speculation behind us. i love serving ford and i'm committed to the ford team and

the ford plan. this year's so exciting for us. 23 new vehicles, twice the number we've ever done. and we are now filling out that complete family of vehicles worldwide. i'm pleased about serving ford. >> will you stay just this year or do you stay beyond this year? >> we haven't changed our guidance. i'll stew through at least 2014. >> at least? >> that's the guidance. >> jim cramer has a question. >> jim. f-150. >> it's beautiful. i'm a 350 guy. super duty guy. i like this. there's one out front. what's the year profitable growth for all? what is the plan dividend ultimately? remember, this week, three years ago, stock was at 18. i believe that the dividend is the driver, how high can it go. >> our plan, jim to continue the dividend, even through a downturn, even as we had last time. we'll increase dividend, because

it's very important part of the return to the shareholders, as you know. but we are getting guidance about what that maximum amount would be. clearly, our intent to continue to do dividend, no matter what, going forward with the environment. >> china, very positive commentary. >> yes. >> europe talking about bottoming, latin america doing better, worse. story, overseas? united states you're hitting on all cylinders. >> i think china continues to be a really fantastic opportunity for us to serve, jim. our sales in china alone, last year in 2013, were up over 50%. we're also increasing our production cape ability with the new assembly plan in chong ching and accelerating new vehicles in china. it's a very important market and they love the ford brand. i think the industry will be around 22.5 million to 24.5 million, jim, this year in 2014. with the economy growing around 7. 5%. i think we're well positioned to

serve china. >> alan, thank you. phil, take it over. >> welcome. >> you talked about the china economy. talk about the u.s. economy. the jobs report last month had a lot of people saying, whoa, what's going on? are we ready for a bumpy 2014? what's your view about the economy and prospect of greater job growth? >> you bet. well, everything we see now between the fiscal and monetary policy, we think the u.s. economy's going to expand upwards of 2.5% for next year. in ford's case, we still have tremendous pentup demand, as you reported, nearly 11 years average age. with our family of vehicles and the quality and the fuel efficiency and safety and value, you can economically obsolete your vehicle by buying a new ford. we see a good, expanding economy. >> do we see job growth kick in more? >> we are going to high another 11,000 employees worldwide, another 5,000 employees to support our increasing production in the united states.

>> you see a broader economy, the job growth growing, beyond ford and auto industry? >> absolutely. we're seeing it in all sectors which we support, especially housing and construction business, energy sector. and they love, as you know, they love the ford trucks. >> an aluminum one. i can't wait to drive this. it's going to be fun. we'll see what mpgs wind up being. >> phil lebeau in detroit at the north american international auto show. when we come back, costco's co-founder and former ceo, what's his take on the data breaches involving target and neiman marcus? a look at feutures s&p and nasdq with a positive week last week, but the dow's had two winning sessions this year. more "squawk on the street."

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business, namely, talking whiskey. but jim beam, certainly. bourbon, this area a key growth market. a very big price. 20.4 times,ebida, paying 20 years' worth of ebida. the two companies began talking seriously about a deal after thanksgiving, although suntory's been around the block a little bit, is my understanding, having spoken to people close to the situation on both sides with this company. remember, beam was spun from fortune brands, ackman took an activist stake, fortune brands had moene faucets. >> and of course beam. spin beam. and from the time it was spun, it was a takeover candidate as a large company in this area that is independent, that was not controlled by a family. so you have this deal getting done. they started, one would expect,

lower price than where they got to. a full price, many will tell you. >> yes. >> the idea that a pernault would be able to compete -- they'd have to spin or sell brands. perault a fair balanced sheet so the idea to take on the necessary funds to do this deal, unlikely. a very high multiple, which is the reason they were willing to sell. >> a lot of people in twitter saying jim beam, not a great mand. no, this ismaker's mark. this is salsa, a tequila, we serve -- looking at me, the restaurant, i'm involved in sales, a lot of sauza. >>en expert in tequila. >> the great growth. sauza was on "squawk" last week, asking is it a fad? i can tell you, this is the

fastest-growing clear beverage. a lot here. once beam spun off the fortune home and security, people said, remember, the old american brands. once they deconglomertize, it's a very, very fast growing business. remember, constellation last week had a great number. >> suntory's a private company, we should point out. shareholders are not going to get upset for paying what seems to be a full price. beam shareholders we haven't heard from mr. ackman, who i believe holds a stake here. one expect they will be happy with it. >> they have to be, geez. >> i don't want to prejudge. premium over what was a strong stock price. >> they're having repisado. two years. >> that is say? >> after a while it takes like sherry. >> two companies already had a

distribution agreement where suntory was distributing beam in japan and i think beam was distributing suntory products in singapore. they have some history together. but that's a real one. $14 billion, premium. >> almost willing to say, we've got a merger -- >> a consumer -- >> you can't get the second word out. >> i want two. >> we don't talk about foster wheeler, so it's tiny $3 billion deal. beam is a big name. >> and cross border, which we heard there will be a lot of. japan into u.s., china into u.s., it's important. >> you're making me bullish. boy, this year started really tepid. it's started like beam, it's moving tomakers mark. >> yeah. some are saying, let's hope this isn't the biggest deal of the year to come. >> please, no. >> last year we got heinz, all excited and that was it. >> when we come back, heating up your portfolio. cramer's on the case. we'll get his "mad dash," as jim

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the sell call last week, reporting better than expected numbers. big accelerated buyback good news. wendy's is the third way between panera and mcdonald's, fresh and juicy, i love going there. >> fresh and juicy. >> they've remodeled. they've got tv. the game on yesterday. i like buying short hills, a fantastic one, had a great meal there yesterday. >> what did you eat? >> the double -- not the baconator. double cheese i eat half. >> 50 milligrams of lipitor or 100. >> you need the new regenero when lipitor doesn't do the job. twitter, this is accelerating the pace of product innovation, remain a buy. goldman sachs saying over the past quarter, significant acceleration in twitter product innovation.

so we're back. twitter, suddenly -- >> product invnovation. >> the banker, david, they're the banker. >> they are. banking analysis or -- >> well, glad you brought up, very separate, yes. they're like a 31-year-old and 56-year-old getting together, that's how far, they're separate from each other. >> so far. >> it's an illusion to the man who stopped research from being -- monetization, early stage. it's not happening yet. it's not happening yet in terms of earnings but ebida, get this, david, raising our ebida 2013, 2015, by 10% and 9% on average and revenues raise. something to hang your hat on. >> perhaps go with a higher price target for a stock up 121% since its initial public offering, the opening bell a few minutes away on monday morning. let's see how stocks do. "squawk on the street" coming back after this.

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seconds. hope you had a good weekend of football, golden globes last night, of course. getting back to work, though, as the market continues to be tepid, as jim said. only record so far this year, the dow transports and russell 2000. >> i think this is good news. i hate openings on mondays. i like down openings, buyers will come in. >> a look at s&p at the top of the screen. down here at big board, ford motor company, highlighting its new ford f-150 aluminum truck. shaved 700 pounds off of the truck. >> the new plans that alcoa's opening in order to meet demand for this. >> interesting. >> davenport. >> at nasdaq, royal bank america celebratingi its 50th anniversary. >> juniper networks, urged to buy back more shares. >> a 13-d filed his this morning, elliott, aggressive

hedge fund in any variety of asset classes. we know them in distress but extraordinarily active in technology to wit river bed last week, for example, making a bid there. here, 6.2% stake, call it 31.4 million shares, saying they believe, juniper should drive lo long-term value on product portfolio on timization with the steps. the stock could get as high as 35 to 40 bucks a share. take a look at paul singer. a younger guy, jesse cohen. both activist as elliott in many of cases, quote, we hope we can work with management and the board in a friendly and collaborative manner to institute necessary changes and put juniper back on the track to success, jim. >> juniper was 35, $40 stock. one time the highest flyer. people felt they had better

technology than cisco but weren't implementing it well. great balance sheet. all of the tech companies remind me of the old consumer products companies that had -- they had a lot of cash on the balance sheet, weren't doing what was necessary to bring out values. maybe they should merge. juniper, put together river bed, juniper, a couple of others, you might be able to have a powerhouse. it's not what people think about with technology, but alcatel and lucent did that, that's on the mend. i think this is a substantial story. tech companies with good balance sheets that haven't executed, look out. look out. >> seem to be a number of them out there. elliott, by the way, making a case going one by one to some of the names, whether it be a co compuware or juniper. >> compuware undervalued to me. but all of these share the

characteristic, they have -- randle stevenson talked about the huge, huge amount of honey that his company spends just to go from 3g to 4g. all companies in foot race to get more. my travel trust owns siena, they have momentum but they're spending a fortune to get the business. they are going to get it. a lot of money up for grabs from carriers and people have said, why isn't juniper getting more than its fair share. what the activism is saying, yeah, is it management's fault. >> i think it's really novel. >> wow, tech, it gets obsolete quickly. but these are big. river bed, people had a sell. juniper, people have given up. don't give up on techs there's a new sheriff out there. >> for today, some are giving up on various consumer names, soda,

express, lulu. but costco, gap, housing stocks are down, sherwin-williams, whirlpool, leading the losers today. >> i think a lot of those are mistaken. i think whirlpool's doing well. i think home depot's doing well. the secular trend for housing being built, i wouldn't be surprises if the stocks reverse. when you have express and bonton a lot of outliers. costco reported a good number. i would not be a seller of costco. commerce is doing fine. i think that we don't want to get lost in the fact that some of the companies are gimmicky that are, i think soda's a gimmick. i think it's a gimmicky thing. people aren't drinking soda the a they used to. a declining category, that's very difficult. >> you mentions wendy's earlier. q

4 north america company operated comps up. they see 150 basis points of margin. upped earnings guidance ass s as they get a right hook. >> i want to point out, nelson pelts the drive of wendy's. >> a long time. >> but i think one of the things to think about is why, the heck was everyone negative about this one? i think there's a lot of people feel there's no room for them. untrue, plenty of room. plenty of room. one that is stresses out is mcdonald's, mcdonald's has to come up with a formula that feel it's fresher products. >> some i would say creeping skepticism on starbucks down a half percent today. >> yes, yes. >> dunkin' donuts saying the whole state of california's open to franchises, as they make their westward push. >> it's about time. they've been really darrell lick

moving east to west. >> star bucks, people concerns it's not a strong quarter. i'm not concerned. starbucks moved up a lot. this is where the sogginess is, people say, what's going on with retail? amazon, when i get my cappuccino, even when delivered by helicopter everybody it's still late. still late. >> you want it fast. >> i don't get chopper -- when it's ice coffee, it's okay. howard shut is not being amazoned. >> goldman ups price target to 65, raise revenue projections -- >> nobody is shortening it today. >> the company in their words, accelerating pace of innovation. that is enough? >> i think that twitter is one of those companies that people want to own. when i sign books, people want

to own -- know more about google, not twitter. they feel twitter is -- people have -- some have gotten religious. when they hear there's no valuation that you can pin on twitter, they're neverorve nerv. they don't want to get hurt by twitter. ebida going up, banker inspires people to take another look at it. >> you mentioned google. 1138, as onnen himer takes price target from 1067 to 1220. >> waiting for them to monetize youtube. when they do, look out. >> the idea of mall traffic being down, i have noticed shares of sears continue to fall. below $4 billion market value is sears. the stock down about 11.7% for the last 12 months, $36.11, down 1.6% today. >> yeah. >> i don't see a secret weapon there. >> every time there's a great deal of weak innocence that

stock, given it's controlled, there does seem to be something, although at this point they're already exploring the auto centers, lands end, all of those things in process. >> selling good things. >> what would the good news be? >> worth more than we think -- >> other than a strong earnings report. that's what would help. >> macy's and costco the stronger ones. one that i'm kind of really miffed about is noodles, they did a big secondary, noodles, in the first week of december. this morning they report very, very soggy numbers, stock's down five from when they did the secondary. this is a stock i had great hopes for. i think the food has -- trying to figure out where panera is, where chipotle, where's mcdonald's, burger king. i thought noodles could be in the middle. maybe it's a craze. >> calling the end of the ramen

craze already? >> that's a big limb to go out on. >> you want to do that? >> i can't. ramen place, land office bis, business. that was the first lease i wanted and they heard it was cramer. >> thought it was cosmo cramer? >> i wish it were. i'm paying real rent. noodles and company is simply not executing well. initially we heard that the colorado storms he they are denver-based company, was responsible for the weakness. now i'm suspicious and skeptical. maybe the model isn't as good. a lot of restaurant companies came public and maybe not all created equal. >> the education curve on the new issues is a steep one. >> someone telling me, jim, time to look at blooming, which is outbreak steak. blooming was at 16, is it time to look? have a bloomin onion, for heaven

sake. take life savers. >> binaca what happened? >> they use things, you know, breath mints. >> i guess. >> they have good ones at starbucks. starbucks is done. >> let's see what's moving. >> flat open if you look at the dow. health care's the leader. banks to a lesser extent but health care the leader. utilities, energy, material on the weak side. also weaker, retailers. i'm getting concerned about the level of comment tear from the big retailers that are out there. you know the whole story? good thanksgiving, weakens, promegsle, extended promotions for a while, now going through into january. lululemon, not only cutting earnings in revenue guidance, but the ceo saying we've seen traffic and sales trends decelerate meaningfully. express came out, cut current quarter outlook. ceo there, mike weiss, january traffic to date has been weak,

and we have remained promotional and expect to maintain the stance throughout the month. pbh didn't cut their full-year earnings outlook, they reaffirmed but cut full-year revenue guidance, due to discounting during the holiday season. so the trend continues. remember last thursday and wednesday night we got earnings essentially warnings from bed, bath and beyond cignet, american dollar, down noticeably last week. bed, bath, beyond hasn't recovered, down 12%. cignet's down notably. those stocks are in trouble. retailers in general have had a rough time. you see the numbers for the last few days. not all, american eagle bounced back a bit. tale of two restaurants, wendy's and noodles, wendy's jumping after raising its 2013 guidance. noodles falling after

preliminary fourth quarter results below the street's view. general motors doing very well today. considering they announced recall of 370,000 pickups for a fire issue. cfo saying this is the closest they have been in a long time to reinstating a dividend. that's in important because a lot of firms institutional companies will be able to own it once they start paying some kind of dividend. kudos to them. north american truck and car of the year, corvette and silverado. corvette, they said sold out. when was the last time you heard about a car sold snout every car, corvette, sold out right now. good for them. ford's got a new f-150 pickup truck here. talking about suntory. i won't belabor the point other than to note, it's trading up, should be up 25%. exactly what the premium was there for it. beam was taken over. when was that? fortune brands, i think 2011, that was $50. since then it's gone nowhere but

up. alcoholic companies trading to the upside. diageo the exception. >> when we come back, netflix gets a message from the golden globe awards involves a popular social media name, next. santa fee making news. a live interview with the ceo. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪

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♪ ♪ everything tonight everything tonight♪ >> a lot of nominated shows tonight are actually on netflix this year. >> netflix, big deal. >> "house of cards," "orange is the new black," yes. and enjoy it while it lasts, because you're not feeling smug in a couple of years when snapchat is accepting best drama.

>> amy poehler and tina fey at golden globes last night. who's smug is those who held it last year. >> poehler not able to cover her short. nice attempt, obviously, if she disclosed she was short, i would have liked her more. >> robin wright did win. >> fabulous. >> they are bringing back lilly hammer, stevie van zandt series. interesting to see how much they commit, what original content strategy turns into, how it changes and so forth. >> i think that netflix is, again, look at entirety of the company, if it continues to maintain, the subscriber growth, stock is going higher, it is. >> recent downgrades argue otherwise. we talked about that. >> we did. the idea being, how can you -- with heightened competition, now

some argue compatible services, but some point they may be more competitive. amazon prime, not to mention goog google. >> netflix trends are star. countering the poehler post. snapchat probably worth a gazillion. just the insider trading thing. >> talking about snapchat all all in two years. >> no, it will be acquired by somebody. >> we'll see for how much. >> i still think back to when i interviewed the u.s. attorney and didn't know what snapchat was. snapchat has a corporate version to say, i hear that beam's going to get a bid from suntory this weekend and disappears so you have no evidence trail. >> yeah. >> nsa will figure out a way. >> nsa will? >> absolutely. >> do you think they're -- >> snapchat will not be able to avoid the nsa. they'll grab it in ten seconds. >> what happens if the nsa is behind target hacking? >> don't even.

>> where are you going? oh, three days in the condor here. >> bring back nixon. he would have been spying, said, i want these people spied on, not them, these people. >> that's right. he has horse sense that nixon. >> yes, he did. >> he had horse sense. >> bertha coombs looking at commodities with crude back to 92. good morning. >> good morning. i'm trying to wrap my head of praise for nixon. oil lower following the iran deal set to begin january 20th, easing sanctions on iran but not put iranian oil back in the market right away. we are seeing oil lower across the board. but funds have gotten a bit more bearish on oil. last week cftc reporting funds cut net long positions on wti nymex crude by 9.5%. gasoline, by 12%. demand not meeting up on those

numbers. as far as nat gas, outlier and looking better, holding up above $4 as we have seen the forecast for the second half of january. now become more bullish for nat gas with more cold weather forecast, despite the fact that we are expecting warnl temperatures on the east coast this afternoon. back to you. >> thanks so much. here what's next on "squawk on the street." >> coming up, are you having trouble paddling through the market? well, you are certainly not alone. cramer's here to help you stay afloat. six stocks in 60 seconds. mine was earned orbiting the moon in 1971.

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it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal. monday morning with jim, 6 stocks in 60 seconds. let's get it going with a sell on marriott. >> jpmorgan goes buy. >> price up at stratus. >> 3d, they don't quit. the most loved stocks in the

market. so much momentum, i don't want to get in front. >> ubs cuts jacobs. >> they go to buy. we didn't mention the foster wheeler acquisition, just like jacobs engineering, the business doing quite well. >> jci selling some businesses. >> that's my fault. why is this important? this is a company that i said honestly, in get rich, i think can divide itself up. selling automative electronics business. keep security companies in front of you, fort net, hold the buy. people love the group. i love it, it's cheap. >> finish line. >> don't worry about it the margin's okay. they are on "mad money" tonight. i want to find out how good the margins are. >> what else? >> we have a company, you might have seen the ad in the second football game, h&r block. >> the green bow tie guy in the

stands. >> they've got continue together. one of the amazing stocks for 2014 because it's so hard to figure out your taxes with affordable care act. it's incredible. i don't know if a soul and do their taxes, it's too hard. >> is there is a springtime hope trade around hrb the way there is around housing? >> there is. if you want tax credit on your -- to get back from the government for health care, it's -- i don't know how to do it other than go to an outfit like h&r block or accountant. i think you might miss it otherwise. >> interesting. one thing we have not talked about today, jim, banks that are going to report. 3 of the big 4, jpmorgan and wells tomorrow. review going? >> what's interesting, the bank stocks in general have been down for about six straight days. typically they come in hot and nen disappoint. it's a ver interesting thing to see whether people want higher rates, what banks need, versus

possibility, the loan losses down and return of capital in 2014. this is a battleground group. i can't even tell myself, but i do -- which is going to win -- but i like the fact they're coming in cold to the quarter as opposed to the last time they came in hot. >> dove tails with the conversation last week, risen about the journal, whether trading structure is fundamentally flawed if that's ever going to to turn. >> i don't know. companies are able to return capital, they will come back being favored. it's on the precipe, these stocks. >> see you tonight. "mad money" 6:00 and 11:00 eastern time. simon with a look at 10:00. >> good morning. we'll return live to detroit motor show with the head of toyota in the country. talk about his products live on the program. sanofi ceo how to block certain genes making certain proteins, a big buy.

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welcome back to "squawk on the street." road map for the next hour, retail, target ceo speak out in an exclusiveness view with cnbc. what he knew about the data breach, when he knew it. >> are retailers the primary target for cybercriminals? we saw them hit the banks last year. this year it's all about retail. find out how you can protect yourself. see of sanofi joins us for an exclusive interview on the heels of $700 million. we'll talk about what's in the pipeline. toyota unveiling a new concept car that hints at a new sports car for the automoti automotivemaker, we'll get details when the ceo of toyota north america joins us live interest the detroit auto show. >> an exclusive. ceo of target sitting down with becky quick, opening up about the data breach that now affects as many as 110 million customers. becky joins us with more on that interview. a busy within for you, beck. good morning. >> good morning. it's been almost a month since

target first disclosed information about the breach. and while target ceo says there is some information they can share at this point, there are still a lot of unanswered questions. >> we're in the middle of a criminal investigation, as you can appreciate. we can only share so much. but as time goes on, we are going to get down to the bottom of this. we're not going to rest until we understand what happened and how that happened. clearly, we're accountable. and we're responsible. but we're going to come out at the end of this a better company and we're going to make significant changes. that's what you do when you go through a period like this. you have to learn from it and you have to apply those learnings. and we're committed to doing that. >> what can you share? a point of service, outside vendor, what happened? >> we don't know the full extent of what transpired but what we do know was there was malware installed on our point of sale registers. that much, we've established. we removed that malware so we could provide a safe and secure shopping environment. this investigation is ongoing.

and it's going to take some time before we understand the full extent of what's happened. >> who did you think did it? >> i have no idea. i think -- i think -- i hope that we find out in time, and we are working closely with law enforcement to determine who did it, when did they do it, how did they do it. >> target's top priority is trying to make sure that its customers feel safe. it is taking out ads leak this one in "the new york times." ads in "the new york times," "wall street journal," and other newspapers to reassure customers that they will have zero liability for any fraudulent charges racked up as a result of the breach. critics blaming target waiting four days before telling consumers what happened, revelations from neiman-marcus, disclosures made on friday that makes target's disclosure look speedy by comparison. >> a discussion i read from the journal who is liable between the retailers and banks. banks no longer willing to say

we'll foot the bill for this. >> it's a huge point of contention. we asked the ceo about that. he said it's something negotiated between the banks and target, depends on the different credit card companies which all have different policies for what they'll cover and how. >> an interesting interview. thank you very much. back to the markets. in the red. the eighth trading session of the year. the dow down about 0.8%. analysis on what this tells us about the year ahead. the chief investment officer with frank asset management. good morning. >> good morning. >> so, john, when you see the market here stalled slightly declining after the phenomenal 2 1/2 year rally, many people questioning if we're about to change direction. what would you say to them? >> well, we came a long way very fast last year. and of course, we've got into the new year now and there's a lot of portfolio rebalancing going on. obviously bonds did poorly,

equities did fantastic. it's difficult to read a lot into the first couple weeks of the year. people are now waiting for the start of earnings season. we'll know more after we get into earnings season. i'm not overly concerned about the lackluster start to the year. frankly, i thought we might be down even more so far in 2014. >> on friday, goldman put ow a note where they said that we were fairly lofty valuations, as things stand at the moment. you were unlikely to get a further expansion, you'd have to have profits growth. today the global strategists at goldman have issued another note in which they say down grading u.s. equities to underweight for the next three months and that they believe there's a possibility of a 10% correction and that that would create a more attractive entry point for investors later in the year. what would you say to those goldman assessments? >> i think valuations are on the upper enof the spectrum. keep in mind where we are.

think of money market funds, they're not alternatives for equity but you're getting one or two basis points on a money market fund today. previous market highs in 2000 and 2007, you were getting 5%, 500 basis points. you have to weigh that into the equation as well. of course where we are in the bond market -- >> john, you know as well as i do, people in the equity market for that reason, the question is do they book profits here or stay in for fear they're going to miss out on a further rally. that's the conversation most people will be having. >> absolutely. the folks who have a long-term time horizon should stick with. think where else you can put your money. bonds have not rewarded folks and yields are not strong. commodities good whacked last year. stocks look like a very attractive place to be, especially when dividend yields are in 2%, 3% range. equities are a place to be. >> joined by mike santolli a senior columnist with yahoo!

finance. what are you hearing? what are you writing? >> valuation is no longer the reason to be bullish on the market right here. i do kind of agree with the general goldman take that you know, valuations are above expectation or history and i think one of the key points, the median stock, is at a higher valuation than index. wait out is a second wind to earnings growth especially among the cyclical sector of the economy. i think there's a chance to mitigate the high valuation with an uptick in the earnings growth case which we're set up for a positive surprise here, but that being said, i don't think stocks are cheap is the reason that you're interested in buying at these levels right now. >> what makes you think this is earnings -- this their time, michael? >> mainly that expectations have been kind of beaten down and also the global growth exposed segments of the market last year did actually sort of sit out the last phase of the rally.

i do think that's where you might have the source of a little upside in the next couple of quarters. i don't know if it's going to blow anybody's you know doors off with the pace of growth in the first quarter. but i think that when you fixate on exactly what sectors can perform reasonably well, we'll have a hand-off from domestic consumer based stuff to the more globally exposed areas. >> we'll leave it there for the moment. thank you for kicking your week off for us. >> from santoli to sanofi, expanding its role in research for genetic diseases with $700 million deal this morning. the ceo of sanofi will join us for an exclusive after the break. ♪ ♪ [ male announcer ] eeny, meeny, miny, go. ♪ ♪ more adventures await

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welcome back to "squawk on the street." the wild right for intercept pharmaceuticals continues. stock down 15%, 17% after its immediate orric rise last week. could be profit taking or that late friday news came out that its experimental liver disease drug experienced more abnormal cholesterol levels than those taking a placebo. the stock had rose 550% last week. now off the session lows here but, still decent sized moves to the downside, david, for those intercept pharmaceutical chairs. >> incredible, dom. truly extraordinary the moves in that stock. certainly the up move, as well. talk about another stock actually related to sanofi which

announced $700 million investment deal with alnylam. that's a company that its genzyme unit invested in $700 million in stock. also having a very positive impact on those shares which are up over 50%. the investment made at 80 bucks a share. we'll continue the company's focus on genetic diseases, joining in on an exclusive interview, sanofi's ceo, chris viehbacher. nice to have you with us. start on the deal this morning. you pay $700 million. in an equity up vestment at 80 bucks a share, why? >> well, you know a number of years ago, we decided to redefine innovation model. we moved away from the campus in the forest and moved to implanting research in major ecosystems. and the acquisition of genzyme did that for us in the boston/cambridge area. alnylam is across the street

from genzyme. so when we acquired genzyme, a clear commitment to rare diseases. and this model gives us access to a portfolio of new treatments for rare diseases. but it's also, i think, different model in the sense that you know, alnylam also announced an acquisition of patents from a company called cerna that merck acquired. the technology always hasn't done that well. so this is an opportunity for us to participate as a partner, shareholder, but to also leave alnylam not only as an autonomous company but grow from being research and development company to fully-fledged, integrated commercial company. that's the logic behind that. >> is that a new strategy in the sense of, many offo our viewers recall the large acquisition of genzyme. are those deals not going to happen in the future, as opposed to replaced with the like of this transaction or your

ownership in regeneron, for example. >> it was the model for this transaction. soed, sano today, sanofi has one of the top five pipelines in the industry today. a large coming from regenero. there's a positive relationship between the r&d expertise in regeneron and the global scale and commercial of sanofi. we don't just invest as a passive investor. but equally we want -- we don't want to particularize, as the ceo of regeneron likes to say we don't want to sanofize anybody either. there's an opportunity for both to contribute what they can do best and grow businesses. but you know, often we want to control in this industry and own and the people who are inside these companies, really driving the science, are not really happy with that arrangement and tend to leave. this is a way of sanofi

participating in very cutting-edge science. it's right in the sweet spot of where genzyme is. genzyme is the leading rare disease company worldwide. i think both of our businesses can grow out of this relationship. >> i have two questions for you first is the degree to which you feel personal pressure to be seen to be doing something because of course genzyme's new multiple sclerosis drug rejected by u.s. authorities last month. the second question, whether you can flesh out what new technology is in the acquisition today, the idea that you can provent genes from being designated proteins. >> so, i mean, if you look at genzyme, it's our second biggest growth driver after diabetes. we have been able to successfully address the manufacturing issues and the rare diseases franchises growing at strong double digits within genzyme. multiple sclerosis franchise is doing extremely well. and obagio has approved by over

30 countries in the world. the fda is an outlier on this. look at multiple sclerosis mark, it's a rare mark where there's more patients, for example in europe than in the united states. so genzyme is going to continue to do well. we're clearly disappointed with the decision, and we intend to appeal because i think this is an important medicine that needs to be accessible to patients. even without the united states, genzyme is on a strong growth track. and then, this partnership with alnylam really expands our horizon in rare diseases. there are 7,000 rare diseases that we can't treat more than 300. so this is part of our underlying commitment. now to the science, this is where the science is very interesting. you know, disease is often created by whether a protein is created or not. and in rare diseases you often have well-defined genetic targets. the relationship between the gene and the protein is better defined. so, this r&a interference, which

can turn the gene on and off, and stop production of the bad proteins, is actually an ideal place for this technology to be used. alnylam -- alnylam is the first company to figure out how to deliver these r&a interference therapeutic. >> an exciting technology. i guess the question is what sort of scale do you get here? i understand there's work for hemophiliacs which is a huge group. is it always a small number of people and an expensive drug, or does it have potential to, for example, cure alzheimer's? >> well, we're only interested in the rare disease piece. i mean, r&a interference could affect a number of different diseases. but you know, nochb other diseases that relationship between genes and proteins is not as clear. so, this is why you know we're developing that technology through rare diseases. that's our area of interest. alnylam has other areas of therapeutic interest. for us, rare diseases talking

about handfuls of patients around the world and some countries, you know, most of genzyme's 2 billion euro plus business is done with less than 10,000 patients around the world. it's expensive to produce the drugs. it's expensive to develop these drugs. you'll have a model of relatively individual high cost. but when you look at overall health care system, most governments are spending far less on rare diseases than they are on actually diseases that are caused -- that could be prevented if people actually looked better, took better care of themselves. >> before we let you go, some say you're in the top five in terms of pipeline and wonder at that comment. what gives you confidence that you do through the various deals and of course through what you own completely, have a pipeline that is going to produce the kinds of breakthroughs that we've seen in the past, many of those which of course have fallen off patent? >> yeah, i think it's most

underappreciated part of sanofi today. take a pcs, a big class. aisle 6 developing rheumatoid arthritis. il-4, exclusive in the area. we've demonstrated outstanding results at atopic dermatitis, severe asthma, another 14 indications in autoimmune diseases. we have a dengi vaccine. most think it's in poor countries. it's a big issue in places like singapore, affects over 350 million every year. a next generation insulin product with u-300. 100% of late stage development is in biologics. now a lot of these are cutting edge science. you can't look up and see where's the market for these because the drugs are actually pretty innovative. so and we need to educate

investors about opportunities i'm confident in this. the partnership in regeneron provided three medicine mz i think the partnership with alnylam demonstrates the collaboration model we've built in r&d. >> appreciate your time. thanks for joining us this morning. >> thank you. >> chris viehbacher, ceo of sanofi. next on the program, apple's new commercial has some people asking, why so serious? gone are the days of the upbeat music and dancing silhouettes. we'll talk about the new trend in apple advertising says about the company with buzzfeed, after the quick break. conversation abr mortgage didn't start here. it began on her vacation in europe. someone stole her identity and opened some credit cards in her name. checking her experian credit report and score allowed her to better address the issue...and move right in. experian. a body at rest tends to stay at rest... while a body in motion tends to stay in motion.

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during the football games and golden globes. excerpts of robin williams from "dead poet's society" and quotes walt whitman. why so serious? jon steinberg, a cnbc contributor joins us at post 9. >> good morning. >> why so serious. >> everybody making fun of it on twitter, it was cheesy, using "dead poet's society". apple is a smart company. a report out last week, 2009, 8% enterprise spin. it will be 11% in a few years. massive growth from 1% five years ago, right? >> so emotional. how is this aimed at companies. >> look at what people are doing. professional hockey team, professional photographer on top of a wind turbine, professional photographer on a mountain, right? creating a story about professionals that we want to aspire to, right? none of us are going to be on mountains or piloting helicopters but why would apple want to show a commercial of

somebody working on an ipad at a desk? >> i'm interested you frame it like that. i thought it was about human ambition and adults trying to expand their own lives and actually steering clear of any value proposition. >> right. >> which has dominated the market for so long. this is more about branding and saying, we are the high margin player in the market. we don't need to worry about whether it's 159. >> simon, every one of the examples, even the deejay, someone doing something quasi profession. it's the creative professionalism but introduce the ipad pro this year. a report out that the supply chain shows they're working on 12 to 13 inch model. they could have shown people dancing around with ear buds. >> or reading a book but it's people doing creative professionalism. >> it's accompanied by a web page called your verse. >> right. >> referring to the theme that robin williams is reading about. where does it fit in the

narrative of the think different ads. >> think different is a good example. think different was the most creative story about education, right? they didn't say use our tools to do your school work, great for kids to do homework. kids aspiring to the great inventors of our time. this is exactly the same thing. it is deja vu all over again. we aren't seeing candy colored imaths spinning around. byod, bring your own device to work, right? that number i cited, the 8% going to 11%, it doesn't include iphones, right. >> so they're trying to get people to bring these devices to the workplace to do professionalism and aspire to being the most creative. >> we've seen that trend for some time. >> yes. >> our guests on cnbc many of them chief executives bringing ipads with them for years. >> right. >> is that -- i mean is it accelerating at a greater extent? >> it's not just the c suite.

fortune 500 companies telling employees part of their job to bring their own device to work. >> that's what i was going to say. not only do you get a pay rise, you've got supply your own hardware. >> they offer a credit to buy your device. >> some don't from what you're saying. >> some people have such archaic hardware they prefer to bring in their own ipad instead of using terrible equipment in that they have. i want everything to be in the cloud. i talked to crimer about the cloud-based applications. when employees are laying on the couch on saturday i want them to access everything that they want easily from the device. i don't want to make it hard if they want to look something up or fire off an e-mail with a little piece of datdata. this plays into that. >> i think of the tim cook quote, we're not in the junk business. there's a junk business but they don't want to play in that. you're arguing this feeds into that. >> thinking about being here on

set with you, you don't have blackberries, there are iphones sitting on the desk now and blackberry is saying that our big push is more keyboards, right? do you want to -- if you're a professional looking for tools to be productive, do you want to be associated with keyboards or with the guy on the mountaintop to do the profession? it's about brand association. >> another reason why pc sales were down last year. >> the 12-inch ipad can be a replacement. i think it's a revolutionary. apple will do a tv, i big enterprise decision to consumer. >> see if they hold 540. >> we are going straight ahead to detroit. toyota stocks struggling over last few months, down almost 10%. what does the automotivemaker have in its pipeline to get investors on board? we'll talk to the ceo of toyota north america when he joins us live shortly. ...for the year. hi. sorry. just want to say,

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japan for 83.50. merck biggest gainer, up 4%. a review by the fard says the experimental treatment to prevent blood clots should be pursued. and macy's among the stocks hitting new highs, up 31% in three months. >> toyota trying to break out of the functional conservative car mole by invaulti vaulvau unveil car. phil lebeau with a cnbc first on cnbc interview. good morning. >> thank you very much. joined by jim lenz, head of toyota north america and ft-1. we'll show you pictures. wow! >> an exciting car. we went to our designers who are passionate about sports cars and said, clean sheet of paper, give us what you think the ultimate sports car is. and ft-1 is what they came up wirth. >> the core of what toyota talked about, we've got to get more passionate? >> it's all about his definition

of heartpounding, passionate excitement and that's what it represents. >> behind us, you have the fcv, fuel cell vehicle. >> yes. >> when do we start to see fuel cells take-off in but for the masses it's available. >> i think late 2014 from some manufacturers. we begin our sales in 2015. so we think it's the real deal. it's going to depend a lot of infrastructure. states like california that have a plan for infrastructure, i think you'll see strong acceptance. >> this gets to what we were talking about before we went on air, fuel prices. you have a different view than everybody else. you think we're in a range where it's going to plateau, right? >> i think that's what we're seeing. interesting to see what happens this spring. in the spring we see increase in fuel prices. but today, fuel prices are hovering around $3, $3.20 a

gallon. it's going to make the acceptance of some alternative fuel vehicles more difficult if we see a long-term, stable price of fuel. >> you think we see that flattening out for a while? >> i think we do. look at how much more drilling, advent of oil shale. there's a lot more supply of oil than we thought. >> brings up the question, does that limit growth in sales of the preous and other vehicles? >> i'm not sure. if you look at last year, low fuel prices we sold 345,000 hybrid vehicles, the most we've ever sold. it's become a conventional mainstream type of technology. so i don't think we're going to see that happening. >> simon has a question for you back in the studio. >> good morning. there's an interesting article in the financial times that draws attention to the fact, as an industry, you're investing all of you at a record level. it says, google is snapping at your heels and you want to be seen as innovators and not manufacturers. so it brings me to two

questions. is there enough profit out there for you all to recoup this massive cost of r&d, and my second question would be, in the future, do you become more like consumer electronics plays? in other words, if you launch a car that done have the must-have factor, do you end up having massive write-offs because it simply doesn't sell and everybody goes elsewhere? >> you know, i picked up half of your question. but you know, we see the industry growing now based on the strength of the economy overall. and not necessarily based on the pent-up demand we've seen in the past. r&d is going to continue into all of the alternative fuel type vehicles. so we see not only hybrid, fuel cells, and possibly other technologies into the future, that are going to be the mainstay. >> but to get to simon's point, there too much capacity? we've got everybody building plants around the world. too much capacity? >> i don't think there's too

much capacity at all. if you look at north america as an example, we will see 17 million markets again. if you look at the way most are getting to that, they're running three shifts in some cases in their plants. so i think there is room for more capacity. i can't tell you about china or europe. but in the u.s., i don't think we've reach the top of capacity yet. >> interesting perspectives, guys, when it comes to not only capacity but gasoline prices. people would be happy to hear he thinks they'll flatten out for a while. >> phil lebeau in detroit. when we return, a pairing fit for the 21st century nbc news teaming up with video start upnow this news. details from one of the people behind the deal. after the break. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪

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journalism for digital audiences. the two companies co-produce original short form news videos distributed across mobile and social platforms. now it's a start-up and portfolio company, the managing director at lara ventures joins us at post 9. good morning. >> good to be here. >> a tipping point of sorts. >> i think so. i think teaming up with nbc universal news group with all of the great television brands that the group has is fantastic. and hopefully it will be great for nbc as well. >> you're not new, you've done 10,000 of these essentially, these news updates. >> it's short form. produce 50 a day. 10,000 sounds right. short form, we really mean short form, 6, 10, 15 seconds. to go on new distribution networks such as instagram, vine, snapchat, that's where the

growth is. news is a growth business. and because of technology and all of the growth, a lot of the growth, is on the new platforms. >> give us a sense of what the growth rates are and what viewer ship is like, as best you can tell. >> instagram over 150 million users. they are 400 million snaps short videos that are being sent every day on snapchat. these numbers keep growing at tremendous rate. >> eric, this is video, this isn't text. do you see video as future of communication here? >> if you look at how people want to get their information, it's increasingly on the mobile device. and the best way to deliver content of mobile device through video. >> advertisers want that opportunity as well? >> advisers are, you know, beating down the door because they want to learn, they want to reach. this is a desirable audience. >> where is the sweet spot in term of duration? you mentioned 6 or 10 seconds. i know a lot of viewership is

younger, so to speak. seems hard to imagine people can get any sense of anything from something they watch for 6 to 10 seconds. >> now this news is doing this over a year now. we've learned art of producing that kind of content. probably not exactly there yet, but we have evolved. we can tell really serious news stories in this short form. >> we spent our lives questioning tech companies whether they monetize what they're doing and it seems right and proper we ask that of our own chairwoman. she says we can't be pressured with having in-house and platforms, can she monetize outside the nbc news website or nbc the network? >> we believe so. this is taking the content to where people want to watch it. this is not building a destination site. this is putting content in a mobile world, in a social world. >> how do you monetize? >> advertisers want to sponsor content, create their content.

>> created content is different what nbc news would do. that's in association with advertiser, isn't it? >> it's sponsored content. the content is clearly labeled that it's sponsored. but it goes in the flow of the rest of the content which is all journalistically produced content. >> are the cpms attractive as others would have us believe? >> very attractive. >> by a function of how many versus different kinds? >> it's by a function of maybe ten at the moment. now, as more and more content is produced, that will probably come down but it's very attractive. >> how dependent are ow on the distribution platforms? could they -- i know -- i assume they're common carriers but what is that relationship like between the likes of what we're doing now and instagram/facebook or twitter or any other platform. >> the relationship has been excellent. you know we've been with our others like "huffington post,"

buzzfe buzzfeed, of course they own instagram. they recognize content is king. they're always looking for high quality, well-produced content, which is what we're doing, what we're doing with nbc. >> congratulations. do we have to call him boss now? i don't know. >> no. partner. >> yes, partner. >> there you go. >> partnerships work out great. don't you worry. >> eric, thank you. >> thank you. >> of now this news and lehr. >> scripps networks, slammed on discussions that it and discovery communications broken down. "wall street journal" is saying, talks of a potential merger didn't make it past the exploratory stage. for discovery communications, you can see, just off about .9% here or -- sorry, .1%. check out the shares both moving. back over to you. >> thank you. next on the show, if banks were last year's targets for

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welcome back to "squawk on the street." looking for the next hot biotech stock keeping an eye on clovis oncology, after citi group analyst appeared on cnbc's fast money and said clovis could be the next intercept pharmaceuticals. intercept scored 500% last week after a successful test for liver drug. both companies slated to report at jpmorgan's conference today and tomorrow. cnbc's brian sullivan is live at the conference today in san francisco with interviews throughout the day. we'll stay tuned for headlines out of that. back over to you. >> thank you. in the meantime, let's note that the market really is going nowhere. it's been i think disappointing start to the year. our eighth trading session. we're flat to negative, down 0.8% on the dow, after of course we surged for 2 1/2 years and that's got a lot of people scratch their heads. today, typically you say the big

money would return. this is when most people are back from holiday. everybody's fully up and staffed. we'll see where they take it from here. >> interesting. dom talking about health care, and there's that jpmorgan conference. but it's been pointed out already this morning, health care the second best performing group in the s&p last year, so far this year it is up the most. up 2.4%. not saying much. but simon's point what everything else has done, doesn't take much to take leadership in the market now. >> no. it's interesting, we spoke to sanofi earlier, that investment in that small biotechnology company sparks 50% rise. you've seen a number of deal-related data points that have helped greatly in that sector. >> m&a volume, year to date, in the u.s. $55 billion, the best at this stage of the year. the best since 2000 which was of course aol time warner. >> that was a big year. that was a very big year. we'll see.

that will keep that pace. nice start. >> in the meantime, target and neiman-marcus the latest victims of cybersecurity. in an interview with cnbc with squawk's becky quick, target's ceo says he was devastated by the attack. here what happens he had to say about customer liability. >> as zero liable, zero liability, which means that target is paying for any fraudulent, any possible fraudulent activity on anybody's credit card and providing free credit monitoring service. so the guest has no liability whatsoever. >> next guest says more retailers can expect to be the target of cyberattacks this year. david kennedy, an ethical hacker who consults for fortune 10s and 100s major retailers. >> good morning. >> what is an ethical hacker? you go in, find floors and say you've got this floor sorted out

we simulate everything that happened to target. as good guys we find out vulnerabilities, hack systems, try to take money out, simulated. we simulate what bad guys do to good guys protect against it. >> you told a researcher normals sort of attack at target back to eastern europe, but it is so sophisticated you believe it originates from here in this country? >> well, what we're seeing if you look at the different companies being targeted, there's another three smaller retailers now coming out that they have been breached. it looks very sophisticated, very planned and orchestrated. and they all have the same type of similarities from target to neiman marcus to all the other ones out there. so, yes, it looks very sophisticated. this is not something we would typically see from organized crime in eastern european countries. this really seems to be more focused here central in the united states. >> you know, there was some criticism of target taking, i think, it was four days to come out and go public on what had happened. neiman marcus doesn't seem to be saying very much at the moment. from a technical perspective, what do you read into that and

this idea that other retailers, unnamed retailers, may also have been the subject of attack but still have yet to come forward? >> from neiman marcus, looks like they knew it several weeks before the closing of december. and they didn't report until january. the reasoning was they were still gaining information about what actually occurred. target took the exact opposite which is giving as much information as possible. we keep seeing the number continues to grow and other systems appear to be compromised. what i would read into this is either they didn't want to impact their q-4 sales or they're really having a tough time and struggling with identifying how this breach actually occurred and how big it actually was. they haven't released any numbers, how extensive this actual breach was. it's pretty alarming in the security industry not seeing this information yet. >> david, at the outset you indicated there's going to be more of this rather than fewer perhaps in the financials area. i mean breaches and attacks, why is that? why have retailers suddenly become more of a focus? >> few you look at a lot of --

they've moved to env, the you insert your pin and then transaction. we haven't moved that far in the united states. it's estimated 2020 before we get to this type of technology. right now the united states is extremely vulnerable to these si type of attacks where they can look at the actual data itself and actually grab that. it's a huge opportunity for attackers. attackers go where the money's at. and right now the united states happens to be one of the largest, you know, credit card providers in the entire world. so the attacks are going to continue to be here. and retail industry is way behind a lot of other industries out there. they view their point of sales is isolated in a way. >> david, what do i do today to protect myself? >> well, for these specific breaches right now, you know, my best recommendation is just cancel your credit card. that's the easiest way, you get a new card issued in a couple days, don't worry about monitoring your transactions or credit cards. but the problem right now is

we're even seeing phishing attacks where people are sending scams and e-mails originating from target or other companies being targeted and saying click here to see if you've been compromised and they hack your computer. don't click on things that you don't know come from the actual company themselves and also cancel your credit card. >> you want me to cancel all my credit cards today? >> the ones that you used at neiman marcus and target as well, yes. those are the only two i'd be concerned with at the moment. but monitor your credit card. that's important. there's also something called google wallet which you can get a credit card that comes from google and you can only authorize specific transactions you want. it's a lot more secure. and you can incorporate all your credit cards into it as well. >> david, thank you for your advice. david kennedy joining us there the ceo of trusted sec. >> thank you so much. when we come back, facebo facebook's new investment. more on that after the break.

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energy lives here. welcome back to "squawk on the street." traders and investors looking for the next hot biostock keeping an eye on clovis. it was up much more after hours on friday. remember citi group analyst

appeared on "fast money," remember that stock has been up and down a lot over the course of the past week. keep an eye again on those clovis oncology shares. >> like deja vu all over again. thank you so much, dom. by the way, take note that facebook is buying branch, the new york-based messaging service backed by evan williams. the ceo of branch announced the deal via facebook of course this morning. he didn't disclose a purchase price, but according to to recode a person familiar with the deal put it around $15 million. we want to note that cnbc has a content sharing agreement with recode interesting for both williams and stone, on a day where twitter is up more than 3%. guys, goldman after all those sell ratings that we saw over the last couple of weeks, i think four at least, goldman does reiterate their buy, takes their price target to $65, raises their ebitda.

>> that's twitter you're talking about? >> yes. >> science and life technology overall, even old tech, hewlett packard and twitter up. we've also as you take a look at twitter of course we've also talked this morning -- >> it is interesting, i think, that the nasdaq is positive. have you read this cost note out from goldman. >> i have in terms of the multiple and arguing 17 to 18 is really where we are and not necessarily sustainable. >> the few times it's happened has gotten us into trouble. >> that's a good friday note. the note today is saying you should -- they were underweight on a global portfolio on u.s. equities and feared a 10%

correction and a better buying opportunity down the line. >> we'll see if that gets any action on traders minds. >> seemed to have been at the open but now i would call more of a mixed market though plenty of names down. >> see you in a bit. we'll talk europe in a few. 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. >> we are not going to rest until we understand what happened and how that happened. clearly we're accountable. and we're responsible. but we're going to come out at the end of this a better company. and we're going to make significant changes. >> we're going in to win the segment. we're going to make sure we understand the customer, performance, quality and knock out styling. >> are you better at doing that, you think? >> i think if you look at what we just -- the awards we just received i think that starts to tell the story. >> maybe in toy buying customers literally going to someone who hasn't been hacked, it hasn't happened yet, then i'm not going

to pay as much attention. target's working, target's going higher, not lower. >> i'm really pleased. >> will you stay just this year or beyond this year? >> we haven't changed our guidance and that is i'll stay through at least 2014. >> at least? >> that's the guidance. we'll know more after we get into earnings season. i'm not overly concerned about the lackluster start to the year. frankly i thought we might be down a little more so far in 2014. >> so this is an opportunity for us to participate as a partner, as a shareholder, but to also leave not only as an autonomous company but help it to a fully fledged integrated commercial company. good monday morning.

we're live here at post nine at the new york stock exchange. the transports set a new record today as crude has come down. shares of lululemon taking a big hit after cutting earnings of revenue guidance for the current quarter. traffic and sales trends are seeing a huge deceleration since the beginning of january. meantime, shares of wendy's rallying this morning. the restaurant chain said preliminary fourth quarter profit came in above expectations thanks to strong growth and same store sales. our road map for this morning goes like this, is this the end of the mall as we know it? according to billionaire retail moeg mogul, we'll find out why in a moment. plus gold's bull run is over. that's the head of commodities at goldman sachs. he'll tell us why in a few moments. the image of target brand took a major hit following the massive data breach next month. what canned retailer do to gain bab the public's trust? we'll talk to the former ceo of costco later this hour.

do you have a degree in computer engineering? if not, that's okay because building your own computer is now easier than ever. we're going to talk to one company trying to make coding and computing easy for everyone all for about $100. but first up, let's get to steve liesman following a new report from the new york fed. >> good morning. new york fed releasing right now results of a new national survey on consumer attitude toward finance that it will publish monthly. the survey of 1200 individuals over the internet looks at expectations on everything from inflation to home prices to wages and credit. we want to give you some taste of what's in this survey. right now what you can see is we have the current month, the last month next to it in green and the six-month average. you can see there inflation expectations over the one-year very well contained, gas up a little bit compared to last month. and then you can see the perennial medical and college, always seen as being higher. the inflation expectations in that regard are higher. but not a lot of change at all from either the prior month or the six-month attitude.

they're also asking about income and spending. income expectations down a little bit at 2% compared to 2.3. spending expectations high at 4.7%. the jobs outlook also contained in this survey. the chance of losing a job in the next 12 months just 16.8%. and finding a job, 45.9%. again, we're just giving you this an idea of what to expect in the months ahead as we report this. credit being harder to get, down a little bit. delinquency or chance of not paying a bill in the next 12 months also down a little bit. the possibility of higher savings account rates also up a little bit. we'll have to monitor these releases. see if it gives any clues to other sort of more market moving data say the conference board of university of michigan but also if they influence into fed policy. carl, you know, it takes a long time for the market to monitor this stuff, as much as five years before they even start to make a trade on it, carl. >> and still a lot of data on the way this week, steve, as we get through some inflation and jolts on friday too.

>> and retail sales as well. >> thanks, steve. steve liesman back at hq. target chairman and ceo talked to becky quick this morning. here's what he had to say. >> i was devastated. i mean, how could this happen to target? it was really a moving moment for me because we're all about the guests, we're all about the trust and relationship. this is what we've built the franchise on. >> and we're joined this morning exclusively by the founder and ceo of one of the largest privately held real estate companies in the country whose properties include the highest grossing retail centers in the world. rick carusso joins us this morning at post 9 having given a keynote yesterday. good to have you. >> good morning. thanks for having me. >> your point is the traditional mall is basically on its way out. but retail is timeless. how do those two things square? >> because i don't think the traditional indoor mall mimics the rhythm of life for how

people live their life. i think retail provides an experience that people are going to continue to want to have. online's going to be a force. brick and mortar's going to be a force if done right. but if the indoor mall isn't reinvented to create that experience and to be compelling for the consumer, there's a lot of choices out there. >> what makes it compelling. >> you see that decline today. here's an interesting statistic. since 2006 there has not been an indoor mall built in the united states. so if you were following any company that you guys follow here on this show that wasn't building a product for the last seven or eight years, you would say probably the consumer doesn't want the product anymore, right? >> what makes the malcolm peling over the next 10 years? >> great architecture, great retailers. retailers have to be more merchants and storekeepers, provide an experience when you walk into that store. listen, the most basic starbucks does it. it's warm, it's inviting, it smells good. people surf the internet, they're there all day. they don't ask you to leave. they welcome you into their

space. great retailers. nordstrom does a great job. there's many of them that do a great job, provide that great compelling experience when you walk in. great service. good products value. costco does it. you're going to have jim on the show later. >> yep. >> that makes the difference with retail. retail brick and mortar has a great future. >> does it matter what space their? does apparel, do they have a longer road to get there than say electronics or toys or some other space? >> i really don't think so, carl. because i think if you mimic the rhythm of life, if you give people a reason to come, people are always going to have a multichannel, okay. we were talking about it earlier. sears always had brick and mortar and always had a catalog. you're always going to have multichannels. online is going to have to create a great experience because that's a credit market also. so i think, you know, apple did a heck of a job building their stores. that's why their products, i think, again are so compelling to people.

because to shop that store is so interesting. >> we led the conversation with the sound out of the target ceo. what about the customer says i've had it, i'm not going to put my credit at risk, my bank account at risk. >> i think everybody has to take it seriously. i think target has done a great job in how they've dealt with it. you've got to be very transparent. i think the consumer is a little bit sort of shocked now. but it's going to come back. it's a short-term problem that needs a long-term solution. and customer confidence has to come back that their data is going to be kept confidential. >> we try to take stock of the holiday. we know the calendar was weird. we know it was promotional. looks like that's now carrying over into the new year. why is traffic so challenging? the mall dynamics you explained aside. >> well, listen, i think the consumer is more confident. i think there's still some cautiousness on their part. there's no doubt about it. but i can only talk about my properties. we had double digit growth on

our properties. the nordstroms stores aren't our properties, we're at the top of their chain in terms of growth. why is that when retailers across the country are maybe sort of flat or down a bit and our properties are up double digits? i think it goes to what i'm saying that if you create the environment and the experience, people will come. >> i think viewers understand that. i think viewers also say that sounds expensive to do that. that's going to take some money. that's going to take some cap x. >> it will. it will. but it's a good investment and you get a return on your investment. why wouldn't you do it? anybody selling a commodity -- and that's the business i'm in. whatever you buy in my property, you can buy in a thousand other places around me. why do people bypass those other shopping experiences and shop with us? it's because we've made that investment to embrace the consumer, give them great service, put them in a wonderful atmosphere. and when people feel good, they spend more money. >> finally, a question on rents. >> yeah. >> vacancies, cost, where are we

headed in 2014, do you think? >> i think rents are going to go up. i think retailers i know for a fact are expanding. good properties and good retailers see an opportunity in this market to expand and capture that customer. i think we're going to see some good growth in 2014. >> we could spend the whole hour talking to you, rick, but we'll move on. thank you for coming. >> appreciate it. >> rick caruso, the founder and ceo of carusa affiliated. let's check out aaron's which operates in the rent to own. fourth quarter results will not match october down beat forecast. to make matters worst it also forecast weak earnings in 2014 blaming a difficult economic environment. remember, these guys, carl, service that lower end shopper. so perhaps some interesting signs about the health of that market. back over to you. thank you very much. the incoming ceo of general motors, mary barre spoke to cnbc at the detroit auto show this morning talking about just how far the industry has come since the recession.

take a listen. >> since we came out of the '08-'09 timeframe, we've seen steady growth. hopefully we'll continue to see that. there will be some ups and downs, but we're looking to continue to build. again, with great products we're looking to take advantage of that as well. in the last year and this year together we have 32 new launches coming out. so, again, it's going to be about the product and how we get those into the marketplace. >> so gm certainly seems confident about the future, but what about the rest of the auto industry? we'll have more with the ceo of mercedes, steve cannon, in just a moment. [ male announcer ] here's a question for you: is your tv powered by coal? natural gas? nuclear? or renewables like solar... and wind? let's find out. this is where america's electricity comes from. a diversity of energy sources helps ensure the electricity we need is reliable.

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been talking about health care all day long and looks like we will for a while. one of the big winners on the s&p today. dom has more at hq. >> health care was the second best performing group in the s&p 500 last year up nearly 40%. so far this year they're the best performing sector up more than 2%. now, leading the way higher this morning check out shares of merck, also st. jude's medical fourth quarter earnings came in better than expected. that big strong momentum trade from last year for these health care names, biotech continues for some of the big ones, health care very much in focus today. back to you guys. mercedes unveiling all new mid-size c-class sedan. phil lebeau joins us with another exclusive interview from

the north american international auto show. hey, phil. >> thank you very much, carl. joined by steve cannon, head of mercedes usa. we used to call the c-class the baby benz. but now we have the cla. so when you look at the c-class, where does it position in the market? >> well, our baby is all grown up. this is probably our most accomplished, most intelligent execution, most beautiful execution in the c-class. the cla is that now entry point. it's bringing new buyers. we just launched it a few months ago. eight in ten of the people that bought the cla are brand new to the mercedes benz franchise. they're going to feed our overall brand for years to come. and we're going to give them a place to migrate, and that's the c-class. still our volume product here in the united states. we sold more than 75,000 this past year. >> is that luxury buyer, the new eight in ten who's coming into mercedes for the first time, are they coming from other luxury brands or from the mass market? and in essence are we seeing a growing luxury market overall? >> we're definitely seeing a growing luxury market.

they're definitely coming from the mass brands. so the cars that have been traded in for the cla are hondas, they're toyotas, they're nissans. so these are people buying highly equipped mass brands. so we're all kind of meeting in this $30,000 to $35,000 price point. and the mercedes benz is an aspirational brand that they want. >> you were telling me before we went on year you think this continues for the rest of this decade, correct? how much will luxury sales outpace general sales? >> significantly. so 2013 was an inflection point. this was the year we grew faster than the general market. mercedes benz grew 14% this past year. >> and the market was up just 8%. >> we're growing faster than the general market. and we're growing faster than the luxury market. we see this trend continuing. the economy's recovering because of housing prices are improving across the country, stock prices are improving across the country. those things feed luxury purchase. >> something i don't think people grasp is the housing, stock market -- explain that for

everybody. >> perception of wealth, comfort and confidence. and when housing prices have recovered and when stock prices are at all-time high, it feeds that confidence. >> steve cannon, head of mercedes usa, guys, on a day when they're introducing the grown-up baby benz, the c-class. >> phil's been bringing us great stuff all day from the detroit auto show. this could be an specially tough year for commodities so says the global head of commodities at goldman sachs. he'll tell us why in just a moment. mine was earned orbiting the moon in 1971.

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commodities starting off the new year with a dose of volatility. our own kay kelly joins us this morning with a special interview

with goldman's head of commodities. >> good morning, carl. i'm excited to have jeff with us. he hasn't done an interview on cnbc in a number of years. you're at market outlook conference. welcome to the show. >> good morning. >> good morning. so talk to us about the commodities picture. you're pretty bearish looking out on this year, right? i mean, you think the fed is changing stance, the stock market still has wind in its sails even though your colleague a couple days ago says the s&p is lofty by any measure. tell us about your broad outlook. >> i think it's important to separate commodities like gold where the story you just articulated is the key driver versus more the industrial commodity such as oil and copper. and first start talking about gold, our view there really is driven by the expectation of the u.s. economy reaching escape philosophy. when you think about a short on gold, which we have a target of 1050, it is essentially just a bet on a substantial recovery in the u.s. economy. in contrast, when we look at the

outlook for both crude oil and copper, the story's a little bit different. and there's two key themes. one is this rotation away from em-led demand or emerging market-led demand to developed market demand. and the second theme is what we like to call a normalization in supply. obviously the rotation away from em and 2 dm being dm less commodity intensive is more of a bearish dynamic. but couple that with normalization and supply which we see both in oil as well as in some of the key based metals, particularly copper, creates a lot of downside risk. in oil we are unwilling at this point to get very short. just given the fact you have the disruptions in libya and iran. however, in copper we believe there's downside all the way down to 6200 really driven by the fact that you have less demand from the emerging markets and we've seen a significant increase in supply from 2% all the way to 4%. >> jeff, this may be a dumb

question, but if we are looking at escape velocity back here in this country, why is gold lost its power as an inflation hedge? >> well, that's a great question because i get it all the time. why are you bearish on gold when you expect the u.s. economy to recover? i think you have to think about it in different phases of the business cycle. we're still below trend in growing. once we get above trend and growing, and you create some scarcity in the economy, then you can create inflationary pressures. but we don't see that happening for, you know, at least another two to three years. so at this point as the economy grows it leads to higher interest rates as well as high real rates which is what creates the downside pressure in gold. however, i don't want to dismiss the story you're referring to. we think further out once you start to see inflationary pressures, you can even have rising nominal rates but declining real rates which would put upper pressure on gold prices. but that's in the future. >> so you've got a year-end projection of 1050 on gold, right, jeff? which is a pretty bearish

12-month outlook although longer term looking back to the 1200s at least for a little while. let's talk about oil for a minute too. you mentioned it earlier, i know you're expecting brent to be essentially flat by the end of the year somewhere in the $110 range. on the u.s. side t.i.'s in the 90s. some people i talk to think it's going to drop much further and we're going to see more of a gap. how do you see trading those two commodities? and where do you think the spread will be based on supply issues, bottleneck issues in the u.s.? >> okay. let's start with brent. and as you pointed out our forecast is relatively benign. some people like to call it boring. but i want to emphasize that last year with brent it started the year at $111.11 and closed the year at $110.80. a 32-cent decline in the price. pretty boring. however, if you look at a strategy of being long a l roing front month, which takes advantage of the shape or forward curve in brent, you would have generated a 7% return

over that time period even though you saw a 31-cent decline in the price. i want to emphasize we still see opportunities in brent despite our benign outlook really driven by the shape of the curve. turning to wti in the u.s. market, there it's a very different story. really driven by the shale revolution. i want to go back and bring up the key theme we see across all the different commodities, which is this rotation away from e.m. towards d.m. or developed market demand. and it's more pronounced at oil than any other market. i know we've heard this theme over and over, but i really want to emphasize in oil it's striking. last year chinese demand was growing slower than that in the united states. now, people look at that and go, oh, it's not real demand because it's driven by the shale revolution and lower prices, however i want to emphasize is that the u.s. demand no longer reflects strong gdp in the u.s. but it actually drives u.s. gdp.

so when you look at this -- uh-huh? >> i just want to ask one last quick question because woe're running out of time. >> okay. >> you had an interesting soybean trade as well as copper trade. can you refresh my memory on what you're recommending? >> yeah. on soybeans there we see significant downside risk coming into the may and spring time period. again, same type of story where we see weakness in the emerging markets devaluation in emerging market currencies, particularly the brazilian rial. we expect a record harvest coming out of brazil. our ones we want to be short are primarily beans, gold and copper. and they're all really driven by, again, the same theme a rotation away from e.m. towards the d.m. >> all right. well, thank you so much, jeff. we really enjoy talking with you. thanks for coming to us. carl, over to you. >> great stuff. taking notes furiously. >> well, that 1050 gold target is really dramatic. and goldman's been smart with

their calls on gold in recent years. always interesting to hear about oil as well. especially we have news out of iran today. >> absolutely. >> it's always a geopolitical story. >> thank you. kate kelly here at post 9. back to dom chu with a quick market flash. >> we're talking netflix on fire. actress robin right now work on house of cards, netflix presented a first time a service other than a broadcast or cable network has won a major television award. the company also announcing it was going to bring back the original series lilahammer for a third season. that big juggernaut of netflix continues to run higher this year in 2014. >> february 14th house of cards, can't wait. thanks so much, dom. take a look at shares of liquor maker beam today. full-on rally mode after being acquired for about $14 billion, that's not including some of the debt. is this good news for the liquor industry? we'll talk about that in a

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the european markets are closing now. >> just about 30 seconds away from the close over there. fair amount of green, simon. >> sure is, in stark contrast to the u.s.

the banks are a clear standout today. that's partly because over the weekend pressure from some of the u.s. players like bank of america and citi group, those are loosening of the rules moving forward from the basel group of doe nnatordonators. the hugest story remains the peripheral bond market in europe. mainly it's sovrns somebacks out there raising capital by selling bonds. uk retail is real interesting. two interesting stories there. william morrison, which is one of the big supermarket chains, is reportedly thinking about selling off 10% of its supermarkets to raise about $1.3 billion and return that cash to shareholders. and also debenhams, a sportswear retailer has bought a 4.6% stake in this chain.

hoping to reinvigorate what's going on there. one more before i return you to carl. the french first lady, pictured here, is about to leave hospital. she's been in -- oh, that's not her. she's been in the hospital now -- there you go -- for three days for some rest and some tests after it was alleged that her boyfriend, the french president, francois hollande, had an affair with the french actress there. i'm not so worried about affairs as they are here in the united states opinion polls would indicate, however tomorrow mr. hollande has his annual news conference mainly to talk about the economy. which will be a very interesting watch. almost governor christie-esque in his fascination. >> fighting a two-front war. thanks, simon. let's check on energy and commodities as well. bertha's at the nymex. >> hey, carl. we've seen some prices bounce

back a bit as the dollar has edged a bit lower from its highs this morning. of course the nuclear deal with iran that will see some sanctions ease as of january 20th for six months provisionally, certainly weighing on oil prices. but brent interestingly enough, which would be the one that would be more impacted you would think today is finding a bit of a floor. that could be a bit of short covering there. the ice folks reporting that fund managers cut their net long positions on brent by 26% in the first week. overall the speculators getting a bit more bearish on energy prices particularly when it comes to oil and gasoline. but what's interesting is that we are seeing the heating fuels, both nat gas and also heating oil coming up along with it because we are expecting to see a return to the cold weather here over the next couple of weeks. and addson armstrong at tfs pointing out we could very well see a record withdrawal of nat

gas when we get the inventory numbers this week because of that polar vortex that we all suffered through in the last week. as far as precious metals with the dollar coming off of its highs of the morning, we are seeing gold a little bit higher there too as well. analysts thinking may well be some short covering. folks fairly bearish particularly when it comes to gold, but the precious metals this morning doing a little better than copper. in part as well, carl, as people speculate that last week's disappointing jobs number could have the fed take the foot off of the pedal when it comes to cutting back on its bond purchases. back to you. >> bertha, thank you for that. bertha coombs at the nymex. bob pisani is back here at post 9 still on a high after seeing neil young over the weekend. >> just one of the great concerts i've seen in the last several years. did several at carnegie hall. you'll see an album out of this. what everybody wants here at the

stock market is a little more volatility. a little more price movement. it's not people are worried, they're just a little disappointed and surprised. this has us concerned over the week. the dow transports are up nicely this year and industrials are lagging behind. obviously transports are up because oil is down and the airline stocks have been outperforming. okay, that's sort of like a dove, but it's more complicated than that. this underperformance is what i'm worried about. we've had some major sectors like telecom and energy stocks, there's telecom, at&t and verizon dragging things down, but oil stocks, chevron notably weak overlow oil, exxon's been weak and microsoft a real laggard. it's not just transports outperforming. some very big names in the dow have been weak recently. that's getting more attention. another thing getting a lot of attention is the dollar-yen. there's a correlation between the dollar-yen relationship and how the s&p 500 performs. put that up on the year and you can see the correlation is not that bad for the year. look, this is one year.

there's the s&p 500, there the dollar-yen. it works pretty well. when you start seeing this collapsing a little bit, we've seen it recently, the yen has been very strong. that creates a lot of concerns because that's the big liquidity trade. put up the relationship in the last month and it's held together. recently though, look, the yen very weak today. the japanese equity markets were closed today -- excuse jpn very strong. keep an eye on that. everybody talking about this relationship. in terms of the u.s., stocks here networking stocks have been very strong. juniper with elliott concerning a lot of stakes. i get this a lot and i can't answer that, but i hope the authorities are looking into that. f 5 networks also up an upgrade at william blare. bottom line is we're holding up well. put up retail stocks real quick and you'll see the real weakness. that's been a problem with all the companies coming out saying, guys we are not seeing any

strength continuing in january. >> that's a weak board we saw. thank you, bob. some big booze news this morning. suntory buying jim beam. the largest acquisition so tar this year. sarah isaacson's back at hq with that. >> the maker of whiskey and adding cognac to its perform. we're talking japan suntory offering to pay a 25% premium to beam's closing share price friday. in share beam trading just around the deal price after the spike. analysts i spoke to say you probably won't see other bidders coming in here because of that high premium offered, also they already have relationships, suntory and beam, and there's a $275 million breakup fee. the real big winner appears to be pershing square as of september the last filing period held the top position about 12.8% stake in beam meaning he's

made more than $370 million on the position just since friday. now, the bigger story here behind this deal, growth in the spirit market and growth in the united states. check this out. over the last five years spirit consumption in the u.s. is actually growing faster than wine drinking. and it's coming at the expense of beer drinking. if you're wondering, vodka dominates in terms of spirits and whiskey and rum. it's helped spirit sales for the entire industry grow around 5% to 6% clip this year. that's almost back to the pre-recession average, which is about 6.5% growth. that's according to bernstein research. one reason that you've seen beam's stock outperform it's nearly doubled since back in 2011 when it debuted it came out of a three-way split of fortune brands. according to analysts was seen here as one of the last remaining public spirits companies if you look across the entire industry. not many left.

diageo is market leader, suntory is actually number three. so there's been a lot of momentum in this business. spirits are high, craft is the trend, carl. and that is a high margin business. fun fact here, guess what the fastest growing segment in the united states spirit market is? >> i'm going to guess tequila, no? >> not tequila. that's a fast growing one, but actually irish whiskey. >> irish whiskey. that's so funny. i got a bottle of bailey's for christmas. >> you're on trend. >> thank you, sarah. meantime, big breach of customer data at target still on the minds of shoppers everywhere. what can target and other major retailers do to prevent it from hitting the bottom line? we'll talk to the former ceo of costco, jim sinegal, in just a moment. i'm beth...

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at the top of the hour shares of beam are soaring on acquisition news. been telling you for months on "halftime report" he's been buying it. next we'll talk to captain kelly shorting gold. find out what other hot plays she likes right now. and goldman sachs raising a red flag over u.s. stocks, but where in the world is the best place to be? it's all straight ahead on the half. carl, see you in a bit. scott, sounds good. target's brand image taking a major hit following last month's

massive data breach. ceo gregg steinhafe saying his company is working hard to regain the public's trust. >> it's very challenging times for target, i can tell you that. it's a real punch in the gut. but throughout this entire crisis we've had a singular focus on really doing the right thing by the guest. >> our courtney reagan at the national retail federations big show in new york with the founder of a store known for putting consumers before wall street, former costco ceo jim sinegal. >> that's right. i'm here with the co-founder of costco, former ceo stepped down in 2012. and the recipient of the gold medal award. so congratulations for that for all your contributions to retail. >> thank you, courtney. >> you're welcome. and everything we've been talking about here has to do with data security, protecting the consumer so they feel safe shopping in the store. as a board member on costco, do you feel confident that costco has done everything they can to

protect the consumer when they shop? >> well, we think we have. but we don't know. obviously i'm sure target and neiman marcus also felt that they had taken the precautions that are necessary. and we're going to have to take a much closer look at everything that we're doing and we have a limited exposure to credit cards because we only accept american express at our warehouses. but nonetheless we have to make sure that they haven't been compromised. >> so far holiday sales turning out good from what you've been able to release from costco? a little surprising to the market, better than expected amid a shortened season, tough weather trends, what did costco do right over the holiday season? >> well, as you might guess it was a little anxious up until the last couple of days before christmas. but things happened to open up at that point in time. the weekend before christmas and monday and tuesday were both very good days, which kind of saved the season, i think, probably for us and a lot of other retailers as well. so we had a good reaction at the end, but of course a lot of anxiety up until that last

minute. >> and weather was really blamed a lot for the traffic trends, traffic is down pretty much across the board in brick and mortar retailers. is costco concerned about what's going on with the consumer as they move to online and away from those brick and mortar shopping trips? >> well, it doesn't just rain or snow on us. >> true. >> it happens to everybody. and the consumer eventually has to come out. we have a saying that the only thing retailers never run out of is excuses. >> true. >> but the weather is something we talk about every year. but in truth you got to do your job and you got to get ready for the season. if you don't do it on tuesday, you're going to do it on wednesday and thursday. >> like you mentioned the holiday season was choppy, stronger perhaps towards the end. what does that tell you about the consumer? they're only buying when they have to when they run out of time when it's christmas? >> i think there's a little apprehension on the part of the consumer, certainly. when there's anxiety about what's happening with the economy. i think the calendar also was a shift. it was a significant shift.

there were six less shopping days between thanksgiving and christmas this year than the year before. but, you know, all of those things have a tendency to work their way through the system. and eventually did get straightened out in the last couple days before christmas. >> so costco like many other companies spend a lot of time and resources on their strategy, reaching the consumer, deploying everything correctly in store. but you have these external factors. for costco you've got fluctuating gas prices, foreign exchange rates, how much does all of that play into the bottom line when you're looking into the business? is it hard to separate out what the external factors are and internal factors as an investor would be looking at costco? >> you have to learn to deal with them. that's why they call this work. you got to be able to take what's happening and take the punches and figure out how you're going to adjust your business. and be able to be nimble. you know, that's one of the things that's very necessary for all of us in business in the whole business community, not just in retail, to be more

nimble than we've ever been in the past. >> so just sort of as a last final question, we've seen a lot of activism when it comes to consumer companies, retailers, as a board member of costco, the company you founded, do you worry about that activism investor coming in and trying to move the company in a different direction? >> no, i don't think so. we're very resolute about what we're going to do and how we're going to take care of the consumer and work with them. and so the fact of activism generally speaking is good. it makes you open your eyes and determine what it is you're doing with your business. so we don't concern ourselves about that. >> great, thank you so much, jim, for joining us. congratulations on your award, very well-deserved. >> thank you, courtney. >> thank you very much. for now back to you, carl. >> courtney, send our best. courtney reagan at the national retail federation. have you ever thought about building your own computer? thanks to today's squad breakthrough, it's easier than ever. we'll show you exactly how it works in just a moment. in my world, wall isn't a street.

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our next guest is turning the masses into makers, kind of computing lets kids build their own minicomputers using microchip raspberry pie. this diy has backers like steve wozniak and nancy strict ler. john, i believe we actually have one of these right here onset, right? >> we do. pretty cool. i mean, alex, i want to ask,

we've seen a couple of these products so far where kids can piece things together and kind of code. how big is the market for smart kids? i mean, seems like it might be kind of small particularly in the u.s. judging by the stats. so is this a labor of love? or do you think it's really going to take off? >> well, you know, you look at the raspberry pie, the kind of single board machine that powers the computer. that alone has already sold 1.5 million units in just over a year. i think there's a real urge out there and not just among kids to start tinkering and playing with technology again. which really takes us back to where computing really started. i think, you know, not only is there a big market for people who want to start making their own computers, but there will be a big secondary market down the line of people who are kids today inventing the next machines, the next devices that shape our cultures in the next decade. >> so best case scenario, what can kids do with this? and how old? are we talking second graders,

third graders, fourth graders? what are they going to be able to put together with this kit? >> so the youngest person to make the computer was 6 years old and the oldest was 81. you can make some pretty amazing things with it. you can make your basic computer. you can customize it. you can make it diy, speaker, bump your favorite tunes, you can make games like pong and game craft. you can make a secret chat room to talk to your friends. anything you would be able to do on what you might call your smartphone or a normal pc, you can do with kano, but you shaped it yourself. you control how it works. you get to design your own game characters, your own rules, your own sounds, your own movies, a totally customizable totally open spot. >> obviously the backing and endorsement of wozniak raises eyebrows, gives huge credibility to the product. what sort of aspirations does he have? and do you have for this product? how many hands can you get one

of these into? >> well, i think, you know, a lot of people are looking at the world of technology today and looking at the sort of devices we carry around in our pockets. we've all become very avid consumers of technology since the pc revolution, but only a very, very small fraction, 1% of 1% know how to actually create with technology. so, you know, i think for a lot of people right now it's not just about, you know, minting silicon valley millionaires. it's about broad based distributed growth. but a tool that's going to prompt innovation in places like sier lion. this is where the emerging generation is driving and they're going to be driving the future. we want to give them a tool that works, simple, fun and affordable as well. >> what's it going to take for us as a culture to get more into

hands on things again? google's motorola has talked about a smartphone they're working on. it seems there's a number to get afoot in terms of poking at the screen in terms of getting people hands on. but the culture seems to have moved in a different direction. is it going to take a different kind of event? what's it going to take to bring people together and get their hands dirty again? >> well, the notion we had with kano was take something that was quite complicated, a raspberry pie, an open source lennox board and make it as simple as lego. we started with just the book, we've now evolved into software, peripheral. we tested the kit in dozens of schools, different languages, different age groups. the one common factor is simplicity. speak in a human voice. build things up step by step, like your favorite video games growing up, like lego. that's something we can appreciate no matter how old you are.

tech has become for many sort of mystifying, something that only a quote/unquote geek or nerd could understand. i think we basically need to look at our devices again and get excited and say this can be an expressive media for me to be creative no matter what my job and no matter where i live. >> that is exciting with a lot of possibility. i think we need the 6-year-old on. that's the next big booking for the show. >> yeah, that's not my 6-year-old. >> nor is it mine. >> and the 81-year-old as well. >> right. alex, thanks so much. fascinating stuff. joining us this morning from kano in london. you're going to get to work on this i assume in the commercial break. >> it's probably going to take me a while. when we come back, groupon taking a shot at amazon with a new acquisition this morning. we'll tell you about that after the break. be a victim of fraud. fraud could mean lower credit scores and higher interest rates when you apply for a credit card. it's a problem waiting to happen.

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a lot of nominated shows tonight are actually on netflix this year. "house of cards,"" orange is the new black," yes. enjoy it while it lasts, netflix, you're not going to be feeling so smug in a couple years when snapchat is up here accepting best drama.

amy with a great line at the golden globes last night. we were talking during the break, john, i mean they can laugh it up in hollywood, but it's not out of the realm of possibility. >> it really isn't. i was thinking that's a nice extension because this disappearing picture thing isn't probably going to last forever. some of the news today kind of underscored that for me, groupon buying what's it called -- >> fashion flash. >> yeah. which raised $112 million, sold for $43 million. so what's interesting to me about this landscape is you've had fab and guilt group, both these kind of flash design fashion sites that have had to retrench because they try today grow too fast. then you've had groupon and living social, these local flash sites also having to retrench. groupon's trying to gobble up a fashion site, extend its brand. but these were so hot a couple years ago and now they're kind of fighting for survival.

>> yeah. and obviously companies much different size but it does bring to mind sort of the debate about valuation of a twitter. at goldman today after a series of sell ratings in the past couple weeks, goldman says we're going to keep our buy, up our price target to $65 because they're innovating at a faster pace and that's going to lead us to the ebitda others aren't so sure is coming. >> and shows what's so tricky about the stage of growth. amazon was able to start with books at the time and then have -- bezos was able to have the vision to extend in the right way at the right pace. he didn't stay stuck in the same place. he didn't grow too fast. we're seeing start-ups from snap chat to fab to guilt trying to strike that balance between not moving fast enough to extend to the next thing and moving too quickly and kind of blowing things up. so we'll see if twitter is able to do that. they've got a great base in mobile, but they're going to have to extend that, i think, to something else beyond what we know of as twitter today, beyond what we know of as vine in order to really grow into that

valuation. >> february 5th is the earnings call. we'll get a lot more information. that point's been made is you really know very little off of the ipo, the real information and data is forthcoming. john, good to see you again. thanks for sticking around for a bit. let's get back to headquarters. scott wapner and the halftime. all right, carl, thanks so much. welcome to the halftime show. starting lineup today is pete najarian, stephanie link, joe and mike murphy. let's get to our game plan for the second half. that's the spirit, beam shares soaring on news of its $14 billion deal. we're going to hear today from mario gaveli who told you on the half to buy that stock. hot commodities hedge funder kathleen kelly on why she's shorting gold and where she's making money in that space. we begin with the markets and a big call today by goldman sachs saying u.s. stocks are overstretched. the firm's global strategy team downgrading u.s. equities versus other markets. pete najarian, to you first. is that the right call? >> well, i can understand why they made the