we're comfortable with that target. >> thank you for being here. fun two hours. >> thank you, sarah. >> thanks for having me. >> first-time outing with us. >> comfortable. >> looks like you've done a show before. show on tv before. >> at this hour. >> never heard of it. >> make sure you join us. "squawk on the street" is next. ♪ good monday morning, congratulations to daft punk on their grammy wins. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. at of the worst week for stocks in a year and a half, we might get a breather from selling. caterpillar beats on earnings. ten-year yields around 2.75. the two-day fed begins tomorrow. bernanke's last day on the job friday. asia continued to get hit overnight. nikkei below 15,000 for the

first time since november but settled just above that. road map begins with the dow looking to work back its worst week in over two years. >> caterpillar results beating estimates. the company announcing a new $10 billion stock repurchase program. cisco slapped with a dow downgrade by jpmorgan. apple slated release results after the bell today. we'll preview how the all-important holiday sales season has impacted its quarter. first up, stocks are looking to bounce back from a rough week which ended with the dow 318-point sell-off on friday. the s&p coming off the worst weekly percentage loss since june of 2012. this, on worries about emerging markets and concerns that may further scale back stimulus at the fed meeting beginning tomorrow. turkey has an emergency meeting planned tomorrow. turkish lira, one we're watching. you said on friday, jim, when

panic is in vehicogue, everybod wants to join in. >> there's typically a big downturn in gdp, i'm not saying that religious versus nonreligious should be the way they should be. i'm saying economically you don't want to invest in a country like that. money pull back. argentina going the way of venezuela but not willing to say that because venezuela's been a pariah for years. people thought cat would miss, why bother to cover shorts going into the weekend knowing the worst dow stock from last year is going to disappoint again? they did, which is causing a different scenario, it's harder to be short here. >> how much is riding on the fed meeting? >> i think the commentary will be very -- will regard it as being very important. but we're in the midst of earnings season. we forget what these earnings, what the companies are saying. now the companies uniformly are saying, the big spur in their

growth is china. now, they are almost all long cycle chinese. in other words, these are things that will not be kept back by a chinese trust bank that did not collapse over the weekend. once again, if you think that china's going to collapse because of a bank, you come in and you see they bailed out the piece of paper, if you're inclined to be as negative, you're kind of being stupid. i mean, i hate to say that, i know it's all great to be able to have many different views, but not if the facts change. in facts change, change with them. >> we go through periods increased focused on these kind of conceivable things that could disrupt the markets. >> that's fine. >> we seem to move through them. suddenly they're no longer in vogue. and you'll find on the other end of the phone people saying, why aren't they focused on italian borrowing costs? >> right. >> it's interesting how that happens. now we're focused on shadow banking system in china. >> right. >> larger growth or lack therefore of the economy and the

turkish leer ra only to perhaps pass through that in the next few weeks where people say here's the best place to be. >> same dynamic, overdue for a correction. we fall 3%, people lose their minds. >> a lot of stocks really did break down last week. i mean, for instance, probably the strongest group that no one ever talks about, because they're so incredibly boring to talk about, the insurance stocks. they had an unbelievable year last year. first quarter, they've been the most horrendous group so far this year. some is fischman being honest saying there's price war, that -- >> and travelers, one of the worst performing. >> and that has been just terrible. retail, howard schultz's comments ringing in my head, the quarter where things shifted to the internet from bricks and mortar. there are definitely issues here. they tend not to be issues people are talking. really, i went over argentina closely, there's a also of companies that have a lot riding

on argentina. 40l 40 million people. we can make a great deal of argentina and saying it's the beginning of the end. argentina's been imploding for four straight months. we finally have what i thought overdue correction -- not a correction, a seminal change in currency, not unlike what happened to venezuela. when you listen to what the minister's saying, he wants to adopt very much a venezuela model, which has been difficult. strangely enough, procter & gamble talked about how to make money in venezuela. but when you change your government and go hard socialist, that takes you out of the meeemerging market quotient. you have a lot of children, that's a reason a diaper company would like to be there. argentina is going socialist marxist. the idea, oh, the emerging markets are bad. if a 40 million country goes marxist because they believe that's the way to go --

>> stepping out -- >> they're going price control, they're going -- trying to change equality in the country. they're also corrupt. corrupt meaning that there's difficult for american companies to be there without trying to augment what they do to be able to stay strong in that country. >> right. without running afoul, of course, of -- >> corrupt being a term in our country, but over there would be fairness. >> sure. >> all of these concerns aside, you do sometimes, you can forgive people and if they get overly concerned, i remember '07 people saying don't worry about the credit markets, everything's fine. remember the outgoing fed chairman saying subprime is contained. >> it was very wrong. i think the system's stronger now. >> i don't know if the chinese shadow banking system will bring down everything. i doubt very much it will. it's not that many years ago. >> when you're building the number of coal plants, say coal plants, though caterpillar was not striong on mine, you're not going to stop the coal plant

building. news out of china last night, trying to get away from the heavy duty pollution causing industries. china's gripped with the idea there's a tremendous amount of dying there, respiratory illness that leads to fatalities. they're not interested in earnings per share, they're interested in revolution per person and they do not want a revolution and they're going to get it from medical and health if not careful. >> let's move tonight earnings reports. we've gotten our share of ones that weren't impressive, caterpillar reports earnings of 1.54 a share, well above estimates. revenue ahead of consensus, despite 10% drop in sales. announcing a new $10 billion stock buyback program. they have 1.7 billion remaining, which they will conclude during the first quarter. buying back a lot of stock. this was a big number, in terms

of where people thought they'd come. >> biggest beat since july 2012. >> when you look at company, which has been poorly managed, and the buying of the excavating company at the top of the cycle, really stupid, buying a chinese company that didn't exist, another poor move, but they laid off a lot of people, boosted what they make per machine. selling fewer machines, they're doing better. this is a story of declining inventory in the united states. they try to dance around the inventory issue. but there's replenishment going on and it's a story of nonresidential construction which is something that united technology said last week we kind of forgot. united technologies is otis elevate somewhere heating ventilation, air-conditioning, two boring topics not as interesting as talking about yellen and transition to fed. yellen and transition to fed, i like the seahawks here, but when you start talking about united

technologies you're talking about whether richard sherman will have impact against peyton. i like the line, i'll take denver. >> more granular. >> espn-like way of looking at companies far better than a broadcast way of looking at it. sorry. >> the buy-back is big news at cat. $10 billion authorization, 18% of the flow, and i read this morning cat's flow is among the lowest of the dow components, but critics argue it's trying to mask order backlog $2 billion lower than last year. >> look, i think caterpillar, if you look at share count over the last five years you see no diminishment. it's a company that's not able to did i'll a directv, being there a better stock than caterpillar, i like the fact caterpillar is presenting a face which says inventories are low, which gives them a chance to say good things about 2014, china's a stand out there. that's counterintuitive, all we

ever talk about is how china's had the downtick from 7.8 down to 7.6, which is meaningless as ours going from 2.2 to 2, but china's always worrisome. the china bears were out this weekend in a way that really was, they were not pandas, they switched to grizzlies. but when i look, they don't have a lot of -- it's not a heavy grizzly bear segment. >> i don't believe there's grizzlies in the continent. >> out west. canada. >> yes, alaska as well. i don't think they made their way to china. >> i'd love to shout fire in crowd -- in 2008 i shouted fire in the crowd. on the "today" show i said there could be a fire, maybe you have to beat it. last week, ppg, the ceo, we're trying figure out how business could be strong and the stock go down nine points in a heartbeat. i was trying to describe, chuck, 190 stock, that's a large dollar

number, people are like, whoa, short them, ppg, they're not doing anything good. they actually are, but now they don't report for a while, but i look at ppg and -- >> people short stocks based on high dollar numbers? >> i'm saying stocks can be knocked over quite es ily. >> different from last year. >> yes, yes. >> nobody could knock anything over and nobody could short anything and hedge funds trying to take risk down. >> so true. >> and didn't put up the numbers. >> caterpillar was heavily shorted stock going in. >> yeah. of course. we know why. different story for cisco, jpmorgan cutting rate on the dow component to underweight from neutral citing weak innocence emerging markets and delayed spending in the switching market, software -- software developed networking i knew product and they think spending will come down in advance of that. >> f-5, a big customer with cisco, reported really beautiful number, obviously, reported on a

horrendous day. the stock was up ten. but cisco's had a series of tremendous misses. but as always had a halo. this was the beginning of what you could begin to get a bottom in cisco, the halo was being undone. john chambers has always been given the benefit of the doubt. this is one where i'm sure john chambers says, you know what? those guys, they are writing a story which basically says, we are doing poorly in these emerging markets, but when you look at some of the conference calls last week, they're the only one. cisco's got a real management problem, but you're not supposed to say that. >> why? what does that mean? you say it all the time. >> because, well, i don't know, i'm not fearful. perhaps i should be. a lot of times i feel in my career when you speak freely, you're making a very big mistake. to read the downgrade, they're not doing as well as their competitors, and they're -- true, china's bad.

it's like ibm, you're not supposed to say anything bad about ibm and warren buffett likes ibm. there was a horrendous call, ibm. sometimes you've got to call it. times you've got to call it. an al gui an al guise it to sports. horrendous quarter for cisco but it didn't get blasted to oblivion because there's a benefit to the doubt. this could be the beginning of the end of the benefit of the doubt, more realistic view of this company losing to juniper, which, by the way, had an amazing quarter. are we supposed to decide that juniper's the outlier? i think cisco is losing business to a lot of companies. and that juniper quarter was as good as what cisco was bad. >> bad. >> but juniper's not talked about because juniper was viewed as a dumb company. >> a nice piece about the new ceo and howell out and janna having an impact on the way he think. >> beautiful preannouncement. >> it was. the stock was extremely strong, last week it was.

cisco shares don't look to-ing down meaningfully, say 40, 50 cents, not nothing on a $22 stock. >> and the buy-back in there. speaking of buy-backs ineffe ineffective, the flow has shrunk but the buy-back done as an average price of a hedge fund manager who would have been taken out and shot by now. wall street bracing for a big after the bell earnings from apple. find out what cramer thinks about the iphonemaker after the break. also ahead, royal caribbean getting a boost on earnings but faces challenges after a stomach illness strikes hundreds of passengers on one of the company's ships. we'll talk to the ceo of the kruse operator later this morning around 11:00 a.m. futures here, s&p is 3. 3% below its january 15 high of 1850. more "squawk on the street" live from post 9 when we return.

♪ we'll never be royals apple set to report earnings after the bell today. analysts expect the tech giant to report fiscal first quarter numbers 14.07 a share, revenues of almost $57.5 billion. figures among the issues in the spotlight. despite all of the estimates, the big discussions will be

china, though phones may not be booked for december quarter and icon, right? is it going to overshadow the business? >> i think it could. china going forward they don't -- they're conservative in their projects but china will be a a dominant theme, people who did not like lack of china initiative, have to do crow eating. i'm concerned about the retail stores in the united states because retail mall traffic, which they have a lot, is down, but you know, samsung did poorly, and nokia did poorly. now, maybe this is share taking and we don't talk much of share take because apple had been losing share for so long. >> it's possible, although -- i mean, it operates at the higher end. i don't know if we can expect that's going to be -- i mean that they will gain significant share. >> we have to know what -- we have to know what china's subsidizing. i don't know whether china will be difficult to tell that. >> that's not going to be anything in these results.

>> but people want to look forward. are there people who are going to say, there's no new big refresh? >> china mobile i meant. >> we're all kind -- we all kind of know, it's set in at $500, okay, they haven't figured out a car that runs on water yet. you know, the day there is something out there is a nice thought. >> it's 2014, man, come on, where's the tv? talking about it for years now. get on it. >> we all twhan want that tv. >> i was trying. >> if we have smoke detectors that we can wave our hand and say hello to, we'd like to wave our hand and say hello to thursday night football. >> i want my iphone to expand so i can stick it on the wall and then it will contract and i can put it back in my pocket. >> no matter what they do in phones say it's 56 million, that will be a record, barring a massive surprise. the previous record, 47, back in

q12013. >> are they in the dog house still? i feel like there's a dog house element. >> i don't know if they're in the dog house. the multiple is extremely low. by the way, there will be a focus on how much cash they generated during quarter, it's always, frankly, stunning. >> yes. >> that cash making abilities of this company have truly never been equalled. and that will go to the capital allocation question yet again, so they may get questions, what about it? they'll probably answer the same way they have been, we'll let you know. early this year, at some point, we'll let you know. we've returned a plan of $100 billion in determines dividend and buybacks. the low, greatest debt offer of all time. >> they are -- they tend not to be great work of art, people who have really studied the great -- i think they studied the breaking bad, they delivered these cable-like arcs on their conference call. this is, apple, has not done it.

>> doing daytime drama. >> it's as if someone said, let's me coach you how do a cable-like "homeland" to a conference call. some calls are disjointed, guys, get a script. there's other calls that developed into a magisterial -- >> full story. >> we'll get some of those with amazon google, facebook. >> amazon, he gives it 27 -- google they have developed a good conference. facebook is "breaking bad" an emmy-like conference call. >> what role is sanburg? zuckerberg is walter white? >> claire danes. >> she's claire danes. >> we'll all over the place. >> i want to know who the true detective's going to be. >> talented. >> who is matthew mcconaughey. >> you love that show. you really do. >> you know who -- amy hood. >> amy hood.

>> the best, new actress on the scene. >> microsoft cfo. i'm tell you, a star in the making. >> got it. rising star, amy hood. >> we'll get cramer's "mad dash" as we count to the opening bell. we'll get the futures and get monday started. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro. there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order.

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♪ ♪ all right. 5:30 before the opening bell on a monday. want to talk merck. >> yes. an interesting reordering coming in the drug group. merck, we had such low expectations for down here, and

this morning we get a morgan stanley upgrade that's kind of rather startling, saying, you know what? merck has momentum. that has not been the case for a long time. the company that had momentum was bristol meyers. bristol-myers said something on the conference call, they acknowledged they had a, quote, nice valuation and that made people -- it's like, oh, my! remember when reid hatings said my stock's too expensive. >> or elon musk and tesla. >> i like -- merck is inexpensive stock and done a lot of things wrong and now can go right. bristol, when i go over the quart, rerating itself as biotech and acknowledging, one point someone said are you rolling the dice? i think bristol didn't handle the question well. i think the answer should have been, we're going to become the cancer, doing our best to emore

yor rate cancer around the globe. merck has low expectations, david that they basically can put numbers down and people say, merck could be back. i remember when merck was st. merck. but, maybe merck's getting momentum back a little bit of love where there had been a lot of hate. >> regenero, you manage to get that in there. >> 5 to 300. >> $7 billion market value. more ahead of course on "squawk on the street" including, yes, opening bell. 3:30 from now. bulldog: oh boy!

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[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading.

♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. on the street" monday live from the financial capital of the world, the opening bell in 40 seconds or so. jim, it's been said you can time your watch by some of these midmorning sell-offs. and i wonder if we're in storer to that again. >> i don't like an early morning up because what happens there are a lot of people who say i didn't get a chance to get out on friday when it was down 300, they're giving you another chance, i want to take it. that's usually the case between, say, 10:00 and 12:00.

>> yeah. we'll see. you're not a fan generally of up openings on a monday? >> no. they've been foolish. >> we'll continue to watch that. by the way, the dow has not had five straight days down since thanksgiving, essentially. today, it would be five in a row. >> it's funny, most of the dow stocks reported stellar numbers with the exception of ibm. when you go over line by line of the dow stocks, there's a lot to like. but remember, that -- those were splitting hairs on friday. but they get, as things get more granular, people pick and choose ones that did well. >> there's a look at s&p at the top of the screen. big board today, k-12 ink and new york preparatory charter school kicking off national school choice week. norwegian cruise line holdings celebrating the launch of the norwegian getaway and first anniversary of its ipo. we'll talk to the head of royal caribbean later in the explorer

passengers and crew sick. they'll turn around, come home early. again, industries manage to survive a lot of the episodes, jim. >> buys every time. royal did put up fantastic numbers. take a look at carnival, come back all the way. two very good companies. and weathered a lot of storm and brought an affordable luxury vacation, and that is a big theme for, i'd say, for the middle class around the world, affordable luxury vacations. >> you mentioned carnival, second biggest gainer on the s&p. is there a sense when these things happen it may not be bad for the industry, but you want to buy a competitor who might benefit from lack of bad head. >> it put up good numbers today. the notion of the cruise, for those of white house haus famil them -- it's like something that is a love -- after the terrible italian accident, i thought for sure the people would decide

these things are too dangerous. no. no. not at all. >> another theme we've talked about here, strength to grow. we always tyalk strength to gro. a $5 billion market cap company, ryn. take a look. stocks up almost 9%. >> what's going on? >> the company's splitting into its performance fibers business, specialty chemicals, and as far as resources and real estate business. so it owns a lot of forest land, consolidated there, sold new york timberlands, make significant acquisitions in north america and new zealand. and it's got a separate business, these are on different growth trajectories, different capital investment needs and don't belong together any longer. >> holy cow. people have been saying, why is this company underperforming? it's not a bad company, by the way. it's had a good yield. a company that basically looking what warehouser did not long

ago, what international paper had to do. had to do self-examination. nice for shareholders. >> yeah, performance fibers, they haven't named it what it's going to, the world's leading producer of high specialty cellulose fibers. >> interesting if it's a kimberly supplier. >> interesting to note in that case, they are splitting. brings to mind ebay and arguments from last week, as to whether those two businesses should be together, as management clearly states they believe is the case. >> seems like years ago, ebay, right? because of the market decline, it got lost in the shuffle. but that was a not great guidance and it was -- and carl icahn's not tweeted today, has he? >> it's still early. >> he isn't up yet. >> should be like wall street research. icahn will hold a buy on twitter today. >> by the way, seeing a lot of the industrials, jim, the deeres, on the back of

caterpillar, which is up 6%, best performing s&p name. >> a lot of belief if you go through line by line of cat, they're positive about mining, which is hard to believe, mining we know is slow, when you think of coal mining, copper prices held in, 39, 40, on the jjc. i think there's an element of gold mining. when you're doing gold mining you might have planned your gold mine when gold was at 1600 and you don't scrap the plan because it's at 1200. gold mining stocks have bottomed, i'm not recommending any of them. but it's been an interesting bottom in gold. >> yeah. it's been painful getting there. >> painful. finally broke the whole streak of gold outperformance. but, cat sold -- said good things about engines, so people want to extrapolate. the idea of extrapolating cat to deere, okay, i mean, if you read through the calls you wouldn't do that, but people like to do those kind of things, traders like to. >> liberty global, our big

acquirer of the day, if you will. it's a monday be it's not merger monday. this deal's been in the works for quite some time but announce a deal to acquire the netherlands ziggo, which will reach 7 million or over 90% of dutch homes. liberty global, of course, continues to grow dramatically through acquisition, remember, virgin media its largest deal, that was completed last year. >> right. >> if anybody out there using generous capital markets and low rates to his advantage, it's john malone, who controls liberty global. interesting to see whether it detracts interest down the road, i mean down the road, of a large u.s.-based cable company that might have interest one day expanding internationally. >> wow, where did you get that? >> i just -- one day. i'm saying, way down the road. liberty global has an interesting group of assets as we know.

ziggo significant one, talking $13 billion, that includes debt. this is not an insignificant acquisition. >> it's occurring at a time when the chatter's all that the evaluations for different companies are going down. because of europe. someone like malone, who is not under pressure from activist can take a longer term view. he caught the bottom in europe with big buy. companies we've been reading about, caterpillar not much, because they're not as important in europe, but a lot of the technology companies have a lot of good things to say. abnet, came on "mad money" europe as a definitive term, 100,000 customers, doing business with server companies and they're saying europe has gotten, quite, well, much better than before. it's important to point out, malone was the first. >> he was. >> bought into the bottom. >> he did. the charter, of course, continued attempts to acquire time warner cable, use of generous capital markets, bank

debt at low rates. he's one of the guy whose said, i'm all in. >> he's a visionary. >> yeah. he's not afraid of leverage, which is important. >> he's got the tax system, too. the guy, look, a financial engineer, also an operator. we tend not to have people who can do both. if you look at the ibm conference call, you are conscious they are financial engineers now. >> that's the criticism of a number of companies. mike freeze who runs liberty globing is regarded as operator and joined us last week from davos. >> the bounce, whatever, if you call it a bounce, quickly faded, up 23 on the dow. mary thompson on the floor this morning. >> as you mentioned, the bounce is modest, at least for the dow, which last week posted its worst week since november 2011. we're seeing weakness in the nasdaq now, off 2.5 point. decline in semiconductors, that's contributing to weakness in the nasdaq. a little bit of weak innocence oil services stocks and utilities, they've turned

around, they were weaker at the open. the market's steady. after last week's plunge, triggered by concerns of the emerging markets and sell-offs, hoping to steady emerging markets or currencies overnight. one piece of news there, that this emeremergency meeting, the could raise rates, that helped to steady the markets. the fact that an investment vehicle used by wealthy chinese did not default, that helped to steady markets. germany's ifo business confidence index troesrose to 2 year side. state side, caterpillar came in with better than expected earnings, as you've been mentioning throughout the morning, the company announcing buyback plan. keeping watch on the yen. last week, of course, the yen soared as investors sought this as safe haven. seeing the dollar strengthen today as investors start to pull away from the yen as that safe haven. again, more optimism coming into

today's session. keeping watch on the s&p 500, dropped below the 50-day moving average. when you see the drop recently, there's typically a strong bounceback there. it's still well below it by 12 -- excuse me, by 20 points or so. we'll be watching that. let's take a look at some of the dow components keeping watch on. we mentioned caterpillar. pfizer, disappointing results on an experimental drug for nonsmall cell lung cancer. cisco systems cut underweight, citing val situation, that's impacting the nasdaq. at&t notvodafone. royal caribbean, over the weekend, news that hundreds of passengers sick on one of its cruise lines, nevertheless, the company came out with stronger than expected reports. and raises its earnings estimates this year, expecting earnings of 3.20, 3.40 a share.

continuing to see a mixed market right now. weakness in the nasdaq. s&p looking stronger. dow holding on to 41-point gain. >> mary mentioned vodafone. to europe, shares were down as was mentioned, observe the weekend, at&t, asked by the uk takeover panel to response. and this is takeover law in the uk, to various news reports, sky news being one of the key ones, about randle stevenson, at&t ceo, and the possibility of not just having his having met with many regulators but potential bid for vodafone. when asked, at&t responded as they are forced to under rule 2.8 under the uk takeover code saying, we are not planning to make a bid at this time. in fact, they will not make a bid, most likely, for the next se six months.

there are carveats. it will complete the sale of the 45% interest in verizon wireless. of course, great speculation, given the comments that we have watched from at&t ceo randall stevenson that the company is interested in acquisitions in europe, he continues to meet with regulators there, trying to get a lay of the land, trying to understand whether the concerns about the nsa, wiretapping, for example, will hurt any for ray that at&t might make. but again, news not taken out too badly on vodafone. thoughts being, it doesn't mean it's not coming, it may not come immediately when they conclude the verizon wireless transaction. for his part, steffanson can feel pretty good, out there getting his shareholder base accustomed to the idea he may do something in europe, and it may be large. and the stock has held up fairly well since then. you know, we know he's a believer in europe. >> such a great move for him.

>> oh my. >> you think so. >> others wonder, why would you want to get involved? whether it's vodafone or another property, why would you want to do that? >> 700 million people right now, down on their luck. i think that you could -- we talk about china being 1.3. we've got 700 million people, developed country, developed continent, there could be a turn. it's not just germany. i know that europe has gotten out of favor, but uk's had good numbers. i just think that -- if we're going against sprint, t-mobile, verizon, you've got to give us something else. you've got to give us some growth. at&t did lag verizon. people liked the verizon deal. i mean i think at&t could get the benefit of the doubt. >> you do? >> i do. >> with any challenges? >> i think -- >> it's brutal in european telecom. >> it is. >> he's of the belief it's going to get better, regulators are going to see how much they've fallen behind after they balkanization of the systems

across the continent that doesn't work. >> if you look at stories about worries about carbon climate change, they've been ratcheting back their worry about that because they want to promote growth. there's a battle going on in europe between job creation and the greens. and the greens, who had been in -- been winning fight after fight after fight, find themselves on the ropes. now i don't think people recognizing those countries, how much the cost of energy has made it so they're in a major disadvantage versus our nation, just important. >> it is. final thought on vodafone, the ceo, he's got a lot of credibility with his shareholder base, don't forget. they were after him for some time, he held out and held out on selling the verizon wireless stake, and he sold at a very, very good price. nobody's going to be pressuring him to do a deal at this point. he's, again, got good traction with his own shareholders and they believe if there's a deal to be done, he'll do a good one. move from stocks to bonds.

rick santelli in chicago. rick? >> thanks, david. well if you look at intraday, two day of tens, rates have moved higher but the two-day especially shows us that in the context of the way we traded friday, we are still in the thick of that range. if you open the chart up, this is fascinating. as you open the chart up to november, what you should garner from this chart is the apex on the right side the beginning of the year. yields have been moving down. it isn't just here. look at a bund. start all of the other sovereign ten-years back to august. see what the apex is, yields down. yields down. but the next one is interesting. spanish, even though yields are down they've turned up on the greater context of the chart. they've made serious progress. just like the italian ten-year. but the problem is, look at italian banks, how they're trading today. look at spanish banks, see how they've been trading. an issue of last week isn't

about end of the world, it's about the new world and how things like banks that don't look very good on paper could be in countries that don't look good on paper and seem to be holding on based on the germany eurozone in its entirety. other big issue, foreign exchange about as we're looking at dollar/yen, look at the chart or the euro/yen, big moves and maybe they do shadow, give you the information we're all trying to garner as to the trade in its longevity but the correction's been small in the context of the grand picture. really, tip of the iceberg or maybe no ice at all. carl, back to you. >> rick, thank you so much. it's going to be cold outside during super bowl xlviii but the event's a hot ticket. what kind of price can you expect on the secondary market? we'll talk with the ceo of one ticket resale website. meanti meantime, cramer embracing his

inner richard sherman. >> there was good football this weekend, wasn't there? >> don't you ever talk -- don't you ever talk about me! don't you open your mouth about the best stock picker in the game! >> all right.

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welcome back to "squawk on the street." reporting from the nymex this morning. watching crude futures mixed this morning, seeing selling pressure in brent crude, because of the concerns over the emerging markets. right now and also potential liquidity issues in china. we are seeing buying in west texas intermediate, hovering around $97 a barrel. that's supported by the colder temperatures outside. meantime, speaking of cold temperatures, nat gas hovering around four-year highs. looking for the polar vortex to continue into the east coast. traders saying a heating oil shortage only the east coast supportive to nat gas but heating oil a small portion of the market. last touch on gold, selling

pressure today, stronger dollar, most of the gold traders saying it's all about the fed this week, all eyes on that. carl, back you. the rant heard around the world, part ii. james cramer channelling the seahawks' richard sherman on vine. >> i'm the best quarter in the game. don't open your mouth. i'm going to shove you real quick. >> six seconds of madness, vined on friday? >> within a few minutes after richard sherman did retweet and said i had, frankly, i i'll quo him, he's the best in the game, ha, ha, that's awesome. great execution. multiple, multiple imitations. many hundreds of thousands and i was honored he selected mine as being the great execution. a great back story. >> could be a argument made he chose his execution from your previous executions. >> that could be. >> which came first? the sherman or the cramer. >> familiar with that kind of -- >> we have a similar

temperament. i will be dough naturii donatin charitable trust fund, about what he does to be able to -- this is a special man. 4.2 at his high school, had been to his high school when i was a reporter covering homicide. and very high gpa. >> you like the seahawks, don't you? >> very much. the money's going the other way. i really do. i like pete carroll very much. i do think that in this particular game, marshawn lunch, i know denver was able to stop the run game from the patriots but i thought it was overestimated because i'm not a blunt fan. it's hard to stop mar shon lynch. >> peyton is 85/35. when the temperature is 40 or above. pointing that out. >> hom. i have an 18 signed jersey. >> jim's 6 stocks in 60 seconds.

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jim's 6 in 60. lululemon. >> saying they got lulu too excited. things are falter, wouldn't touch this. >> maryland peabody. >> destockpiling. you need more coal and peabody's a beneficiary, too cold. >> ksu hit on friday. >> horrendous conference call. they lost a major train going to the gulf that is now going to east. and the other's mexican start-up plants in auto did not come through. >> toll, barclays cut them. >> one of the things bernanke wanted to do was cool price of housing. barclays saying they've succeeded, sell toll. i don't understand the love affair with ag. >> walk me through the news ch p polt lay. >> this is taking an attack against the food chain. why to use.

one point to take a jab at mcdonald's which was their owner. >> take a listen to this. >> don't know what caused it to explode? >> if it wasn't jihad, the petroleum. >> they pay us fix their image, not cattle. >> supposed to make sure this doesn't get out. >> cow explosion video. >> why are my cows exploding all over the internet? >> it's such a brilliant -- it's going to be four half hour movies. they understand the food chain very well. the commercial, it's the derek coleman trust your inner power ad about the absolute death seattle running back who is playing this weekend, such a great story, proctor & gamble, dura sell, talking about business going up because of that commercial. >> interesting new world we're in. companies have leveraged that media. what's coming up tonight? >> this is very important, because when we hear talk about

furniture, we hear about whetherth the stock market is hurting people. showrooms have a decline when the market goes down. i want to know how the weekend went. >> see you tonight. "mad money" with jim cramer. breaking news on new home sales and reaction at the top of the hour. ceo of royal caribbean after that incident on "explorer of the seas". back in a minute. [ male announcer ] there is no substitute for experience. for what reality teaches you firsthand. in the face of danger, and under the most demanding circumstances. experience builds character. experience builds confidence. and experience... has built this. introducing the 2014 glk. the engineering and the experience of mercedes-benz. see your authorized dealer for exceptional offers through mercedes-benz financial services.

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welcome back to "squawk on the street." new home sales dropped, they dropped, 7%, to 414,000. that seasonally adjusted, annualized from a revised 464 that became 445. put this in context. if you look at october and november, october, 474, that was the best since the summer of '08. so we continue to monitor this. somebody who always monitors, will give us a granule look at the number, let's go to washington, and diana olick. >> this is obviously a big disappoint, rick. we were looking for 455,000.

we got down 7%, more, we were looking for 3%. but remember, these numbers are based on signed contracts, not closings, and they are very volatile, especially looking at december, which has low sales volume in general. so you're really seasonally adjusting these off a tiny number, so they're going to be volatile. we're seeing supply at five-month supply, up from last month. starting to see inventory on the market. the big question, though, pricing. home builders had been raising prices and that was pushing some out of the market. seeding median home price in december 272,000. now that's way up from the 258,000 that we saw one year ago. home builders continuing to raise prices because they have higher cost for land, labor, materials. that's going to hurt sales. going forward we want to see if this more volume in the market, this more inventory, will push sales higher, as we get towards spring. again, december, very volatile. >> diana, good explanation.

thank you. diana olick on housing. the markets, mixed. nasdaq a laggard. dow hanging on to modest gains after friday's drubbing. s&p, 1792. the chief market strategist and alec young with s&p capital i.q. good monday morning. >> good morning. >> nick, we've talked for so long about the new normal. we're going back to the old normal. what does that mean? >> the old normal is the paradigm we'll see through 20 shand beyond. it's a combination of higher volatility, as we've seen, combined with lower correlation, which is healthy. we had correlations between sectors in the s&p north of 95% over the past couple yof yeof y. they're down 80%. that will give people a better chance then the past couple of years. more volatility but also more tune. >> do you agree?

do we have to go through some ugly period with regard to the sell-off? >> we came into the year, looking for 1940 by the end of the year, that's only 5% upside from the 1848 where we started. so we have been expecting more volatility this year. we haven't had a correction, 10% or more, since 2011. historically, we have them every 18 months and it's been 30. so, we're definitely expecting a pickup in volatility. as far as emerging market story goes, we'll have to see how to plays out. bad news priced in. we're vulnerable in the short term, especially with chinese news. the way to hedge that domestic sectors and small caps, looking at 15% international revenue footprint versus 33% for the s&p 500. >> nick, it's kelly. good morning. i wonder, if what you're talking about we have i two-way market, we're healthy and fine, wasn't

it the nature of the sell-off on friday that raised alarm, the fact that it but weffectively something that shifted people out of positions and raised doubts what kind of paradigm we'll be in for the months ahead? >> friday and all of last week a wake-up call. for example, the worst, the most hated trade in the u.s. was being long bonds. bonds up over a percent this year. the second-most hated trade gold, up 5% for the year. i think these shocks are healthy and force us to re-establish some semblance of normality and diversing it of portfolio. only way you got hurt last week was to be 100% in emerging markets or a heavy dose in emerging markets and high risk u.s. this resets the line to something more normal, more rational. >> alec, there's cynics who believe that we're all checked into the hotel california, that we're going to get through the fed meeting this week, and they're going to give us the opium yet again. how -- what is -- what is yellen's tolerance for pain?

how willing is the commcommitte back and let markets work out what they have to work out? >> they've made it clear they're going to begin the taper this week. i think we're expecting that. i think the markets have factored that in in a way a validation of the recovery. they wouldn't do it if they thought recovery was so weak it couldn't handle it. i'm not sure the recent emerging market volatility's enough to move the needle for the fed and keep them from tapering. i think the bigger problem would be an acceleration in u.s. growth that had people accelerating how quickly they expected the fed to taper. the 10 billion meeting increments are factored into the market. that's a high-class program. if growth is too strong and we have to worry about fed tightening, that's a high-class problem given that we're getting fits and starts in terms of the recovery. >> at the same time it would be easier to envision a janet

yellen-led fed with inflation falling, deciding we're going to take a pause with the taper. if that doesn't happen, if for all sorts of reasons inflation is stickier, the parts of the unemployment mark looking healthier, that would be a fascinating challenge for her in terms of guiding central bank policy. >> absolutely will be. it will be intriguing to see what happens first half of year. even this meeting wednesday will be very interesting, because we're coming off a weak december jobs number. if the fed knows january number is better, you might see another 10 billion taper on the back of the fact for the next ten days markets will be confused why they did that until they see the stronger jobs number a week from friday. >> guys, that's going to be a heck of a week to get through. thanks for your time. see you next time. currencies, which are so important in the market with the spike in emerging market currency volatility, some drawing parallels to what's happening now and what happened in the late 1990s when there were memorable pricings.

let's bring in allen ruskin at deutsche bank with us. welcome. >> thank you. >> a great note this weekend. what was clear, people must have been calling you left and right, is it 1997 all over again? answer was long and not entirely -- it sound likes it's too soon to tell. what are you watching here? >> the big worry is that the em currencies and the em countries share of gdp, larger than it was in 1997 and 1998. you had developing countries, roughly 20% of gdp then. it's now 40% of gdp. so the ripple effects can be much larger. at the same time, a slow burn crisis. i know it doesn't feel like that it doesn't feel like that if you're trading turkey now. i think it's going to be with us for the next 18 months to two years, in fact. >> somebody said that argentina has perfected art of the slow motion train crash. how much of a worry is our reserves for some of the countries? >> i think argentina's a special

case. i think you've got to take it country by country. turkey's pretty much out of reserves in a credible sense. they can't use reserves, if they're going to run out. brazil, lots of reserves, russia, lots of reserves. it's a smoothing exercise. so they don't have to use interest rates. if they have to use interest rates, banking sector will run into problems and credit cycle will turn vicious, and that's the big worry, i think, out there. >> the credit cycle turning vicious. what would it look like? how do we get a sense it's occurring? >> you see private sector credit slow down, both on the demand side and on the supply side. the real estate market starts to turn. real estate has been very, very buoyant, all of the em space. all of the accidents that are happening now, all of those property markets were going up rapidly through the end of last year. so i think those are going to turn sharply, really, in a way. you have to watch local data, really on the property side but

it's going to turn hard. >> investors are remember '97-'98. alan greenspan came to the rescue, 50 basis points, a great year in equity markets from september through the end of the year. >> right. the greenspan put was in place. i don't think we're in that space. the u.s. did develop because beyond yelleds cushions the equity market. the u.s. is better placed in a relative sense to much of the rest of the world. >> could potentially, if the same thing were to play out and the fed had to come in with a response, talking about a dangerous overvalued potentially situation yard to equities or high yield. before we get to that point, i wonder, how much leverage is there within the foreign exchange market? in other words, how much are people using funding currencies like the yen or other places to take positions and is that part of what's happening here? did we learn something about that on friday? >> i think there's substantial yen carried positions out there.

the counterport to that on the em side, people washed out of those trades. i don't think there's a long, long em position. speculative accounts inclined to be short em. the big worry i have is china's got a large carry trade. that could wash out effectively. a lot of capital that's come back into china and that's the point of maximum vulnerability. >> wow. domestic carry trade. we have to bring you back, talk more about that one. thanks for your time. last-minute restructuring of a troubled $500 million investment product issued by china credit trust company, one of the biggest trust companies in the country, appears to be preventing investor losses but the close call sparking concern about the stability of the shadow banking industry and appropriateness of government bailouts within the sector. eunice, great to see you. what can you tell us? >> reporter: kelly, i can tell

you that china really dodged a bullet today. a lot of people worried here that we would see a default in the shadow banking industry which could have had a ripple effect around the world. however, that did not happen. to give you background about it what we saw was that a wealth management product worth $500 million u.s. was coming due this week. the company associated with it, a coal mining company, said it couldn't pay the money back, and investors were going to be stuck in some way, shape or form. so there are a lot of people who are wondering how the authorities were going to treat this current situation. as it turns out, the shadow lender, which is a company called a china credit trust, did put up a notice today and said that they have worked out a deal. they said that there was going to be an investment in the coal mining company. we've been hearing that investors are going to be getting at least principal back and potentially some of their

interest. now, the larger question has been, you know, just exactly what does this mean for the future and how the authorities work these out. and because this is such a precarious sector, right now people are saying that possibly when you see bigger defaults to come, this is probably going to be the way that the government is going to be able to treat some of these issues and work out some of the deals. kelly? >> i'll take it. thank you very much. when we return, one of the worst performers in the dow friday. today a different story. cat is up almost 6%, after its fourth quarter numbers, having its best day in more than two years. biggest beat in almost a year and a half. should you be a buyer? more on that when "squawk on the street" continues. can ke you in. tdd# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action

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machinery and analyst. great to see you both. andy, to start with you, do you describe this, obvious shares are loving it, but is it about the buyback and cost cutting or fundamental strength in caterpillar's key marks. >> i think that construction is a big highlight here in the quarter. construction mark margins higher than we thought they would be and revenue across the company higher than we thought it would be. it's the things that you mentioned, cash flow was strong and buyback is there but the quarter was pretty good and the outlook surprised people. >> has it changed your view on the shares at this point? >> we've been arguing that construction would stop the stocking we've seen a big inventory of destocking cycle here. we've been arguing we'd see restocking in the channel and that's what we're seeing. we've been positive, especially lately on the stock. and i think you know, this sort of backs up that thinking.

>> eli, what about you? the same question, whether this is fundamental strength and encouraging in terms of share performance from here. >> it's clear that this is a water shed event that the worst is behind caterpillar. and that was the big fear going into the quarter, not only the fourth quarter be a miss, but they'd have a down year in '14 and people kept extrapolating the downturn. what we saw in the quarter was that, yes, mining is weak and remains weak but the other parts, construct, would more than offset it and headwinds you can have a better year in '14. the company peaked in 12, downturn in 13, transin addition '14, improving growth in '15 and beyond. this changes the outlook for caterpillar to a positive se scenario for the next couple of years. >> discussed about the size of the float, small among other dow components and going get smaller. continues to see resilient support in the low 80s.

does that change the way you look at the fundamentals, the long-term fundamentals? >> i think you bring up a good point, actually. when you market to investors, i think investors steered clear of the stock. if you look at large global pms that we talked to, they're underweight caterpillar. you've mentioned that this company's underperformer here over last two years. if we can use this quarter as a springboard toward some growth, i think you're going -- the global pm vs to look at the name and that could mean a big snapback in the stock, relatively quickly. >> eli, what is your view on the shares at this poemt? moment? >> we have a buy recommendation. we saw some of it coming with surveys, the fourth quarter's better than people thought. the share buyback, strong balance sheet, best in 25 year, the company's getting ready to

not only return capital to shareholders but improve mountain outlook. you have to look at, remember, '14's a transition year, but things are put in place for caterpillar to have a very good couple of years in front of it. not quite back to where it qaim from, but getting better. >> andy, a question here. for investors who may not like the china story, worried about growth in the country or potential for credit crisis or whatever. can they own caterpillar and feel confident that the stock will do well, despite what happens in china? >> let me say this i think we'll need some emerging markets stability for cat to work going forward. we can't have what we had last week. china's a small portion of the overall caterpillar business. obviously affects their mining business a bit. but the thing is, with last two years of mining downturn, i think the bad news is in the stock. certainly in our neumber. we have 50% overall downturn in

our numbers now in mining, and that includes the aftermark which is more stable. that's pretty bad already in the numbers. if we can get stability in emerging markets that's where you see the stock perform well. >> all right. we'll wait and see. andy, eli, thank you both for your time. a big move on caterpillar. >> dow's up less than ten points. a quick market flash. >> take a look at shares of tata motors, car slim, respective executive, died over the weekend. police say he may have committed suicide. analysts say the death could slow the domestic unit's recovery. >> thanks? when we come back, buying bitcoins you need a secure place to store them. how do you begin doing that? that's where coin base comes in. find out how the digital wallet works when we talk to the co-founder here on post 9 in a moment.

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the co-founder and president of coinbase, a bit coin wallet start upp participating in the hearings. >> we're expecting new york regular later to blaze new territory here. bitcoinfully kind of breaks all of the traditional money transmitter products. bitcoin doesn't fit on the books and new york's trying to fix that. >> is it going to be contentious? do you feel v. to defend it? >> not really, to be frank. rewind the clock two or three months to the federal senate hearings on bitcoin and the tone alty was positive. a number of states looking at bitcoin and it's fact finding and positive. we expect a good outcome. >> those not familiar, if i'm new and want exposure, how do i work through you? how many accounts do you have? >> we're quickly nearing 1

million consumer wallets on coinbase. the idea to make it use for the average consumer, like paypal. hook up your account, start buying bitcoin. >> global number? >> so technically, it is cloegl. it's a global cur rent sy. but for the purposes of buying and selling the boy coin, it only hook up to u.s. base accounts. >> i'm amazed the openness, the federal, sound likes state level, demonstrated towards bitcoin because regulators who might typically be thought of taking a cautious approach to anything that would undermine the monopoly of currency, for example, have indicated a willingness to kind of see what happens. we saw bitcoin rally sharply after the senate hearings, you mentioned in the past. >> that's right. >> even in the last couple of months, there have been more concerns about how stable it is, how legitimate it is, the black market activity it may facilitate, they seem open? >> yeah.

you know we have the great benefit of coming after the internet. there were very -- a number of things in the early days of the internet that seemed scary and regulators, at the time, were unsure what would happen. now bitcoin comes along, it's a new, open network that allows a number of great things to happen but in the early days, with any new technology, a number of scary things, too. regulators have seen that pattern in the past and hopefully are now being more forward thinking in applying it to bitcoin. >> you were a trader at goldman, where you not? >> that's right. >> why did you decide to get involved with coinbase? why do you believe in the future of the boy coin? >> i believe in bitcoin it's the first open network for all financial transactions. bitcoin does what the internet did for distributing data, brought the cost down by an order of magnitude. compare it to current financial rails like credit card networks where it's 3%, or western union, fees are higher.

>> you know the fees are hidden. the second people are to start mining in order to rare fi the order of those transactions from party a to b to c, to make sure it's not double counting, it's going to get expensive and the costs will become transparent and exceed the traditional payments. >> mining, it's -- that should be better in the future, right? it's economies of scale, the larger the network gets, the lower each transaction goes. >> you've gotten backing from an dresen. >> right. >> how long term is his commitment. >> very long term. the guy who invented the web browser says the original sin of the internet was not embedding economics into it it's a strong vote of confidence. >> next time, bring him along. >> i'll try do that. >> good to see you. >> straight ahead, senior vice president at morgan stanley wealth management telling us what his wealthiest clients are doing. why he thinks the economy could

reach real gdp growth of 3% during the first half of the year. to manage your money. that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you. but with less energy, moodiness, and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer, worsening prostate symptoms,

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[ breath of relief ] nwas the most watchedage otelevision event ever.s so, what's next? the upcoming winter games from sochi. where every second of nbc universal's coverage will be available on every device. on tv, online or streaming on the nbc sports live extra app. beginning february 6th, experience the winter games everywhere. welcome to what's next. comcast nbcuniversal . about an hour into trading. some of the stories we're talking about 7:30 on the west coast. new home sales falling for a

second consecutive month, down 7% in december, to a seasonally adjusted rate to 414,000. economists expecting 455,000. merck the number two gainer on the dow and the s&p, up 3.5%. morgan stanley upgrading the drugmaker from overweight to underweight, expecting projections to rise and likes steps management is taking to improve the outlook. autozone hitting new highs, above the $507 market. markets try to recover from last week's sell-off, where are high net worth individuals put their money? welcome. >> thank you very much. >> you've described yourself ace financial quarterback. do you work with actual quarterbacks? as well, your clients include entrepreneurs, silicon valley types, athletes, by chance? >> our clients are not -- we don't have athletes. we work primarily with corporate executives, physicians, and social entrepreneurs, silicon

valley. >> were you getting phone calls from people saying, what happens going on? do i need to be worried about investments here. >> we are not focused on the short term. for a lot of them, we are -- trying to take the stress out of their lives and for investors the stress is not having a plan, not having what a goal should be their goals and layering what the markets are on top of it. clients in general, when we talk about equity portfolios, tend to be longer term in nature. our job is to take the stress levels out from them. >> you must have done a good job if no one's freaked out. i wonder what advice are you giving? what are key investments you're making for 20 sh? >> when we look at clients they come in different shapes and sizes but the most important thing we're trying to get across is to have a plan. sit down and look at what your goals are. are you looking for education planning for your children? retirement planning? all of those things. make sure you are focussed on

where your goals are and you have help to get towards the goals. then where you have longer term portfolios, your 401(k)s, retirement. look where equities play a part in that. let's look to the long term. that takes stress out of what's happening on a day to day basis. >> emerging markets? assuming you have allocation for clients to be diverse fifiedive getting calls from people saying get me out? >> no calls so far. talking about emerging markets or asset class, we come back to what's the time frame? if our time frame is two months or three months from now, we look at this. if we're longer term in nature, and part of investment mix where you have emerging markets i'm not anything happening changing fundamentals or demographics we see in the emerging markets. even what u.s. companies are doing with their -- >> does coming off 29% in the s&p change your clients' approach or recommendations to

them in terms of their equity allocation? >> i think, again, the short term things in the market don't affect us as much as looking at long-term picture. what does it change for clients? we may have portfolios where we'll tackically have conversations what's happening. it's important we are having discussions and people are looking at what's important to them and when are the goals for when money is needed. >> is the stigma coming out of being in cash? what ms yo what's your advice, i'm neutral on equitieses, i don't have a problem of being in cash or a large portion of the allocation in cash. >> when we look at overall portfolios and people's wealth, there's a place for cash and a place for balance. the real question's going to be, how much cash is appropriate. when is the need for cash? if i'm buying a house in three months i may need to be in cash. if this is money longer term, talk about 401(k)s for retirement plans, we say what

can we be doing with that cash that makes sense per your risk tolerance and needs for the money. >> a zen-like approach. thank you for joining us. >> thank you. straight ahead, royal caribbean seeing strong results for its fourth quarter. will that be overshadowed by the recent outbreak of a stomg bug on one of its kruses? the ceo will join us to address all of that. announcer: where car be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates. life's an adventure and it always has been. but your erectile dysfunction - it could be a question of blood flow.

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the markets hoovvering arou the flatline on the dow. the nasdaq down a percent or so. a quick market flash. >> i've got one winner, united technologies. spiking up more than 2.5%, after defense news in industry publication cited sources saying that the company is considering options for its sikorsky

helicopter unit. some could include a sale, a spin-off. the more likely option, a sale or tax-free spin-off. the m&a trend could be continuing. rick santelli joins us with the santelli exchange. good morning, rick. >> good morning. you know, what happened last week? everybody's trying to scratch their head. but i really done think it's as complicated as everybody wants to make it. look at word solve, everything's about the word solve. the chinese government, the federal reserve, the bank of japan, bank of england, all trying to solve the issue, and the issue, in my opinion, is insolvency. that's what they're trying to solve. they're trying to solve invol ven si. now if you think about, 2007, you had roubini, one of the first, speaking out about how the primary dealers and the

investment bankers, in particular, investment banks were insolvent. then we saw a lot of changes, whether it was in the accounting, fasbe, everything changed but they didn't solve it. they papered over it. and i think what's go on, whether it's in the italian banks, spanish banks, the loans in southern europe, how there's a new notion that mario draghi's going to do a form of qe for the problematic loans, china gives us a great example about the issue here, and the issue really is insolvency. consider this, for 2013, and ongoing sense we've had, you know, huge double digit gdp in china, it's now, you know, close to half of what it was in its hey day. that means something. out of all of the loans made, the actual government through the proper channels is trying to curtail credit a bit. what you end up withes a shadow banking system that ends up

participating more in throwing in money into the hopper. so when we look at what happened with the chinese credit trust, basically you had a coal miner, energy company, that wanted loans. it's like the junk bond market here. but their insolvency is at root of this and it's also at the solution. for 2013, most economists agree, about one-third of all of the credit, one-third of all of the cred knit china, came from the shadow banking side. when you hear the word "shadow" it's not a good thing. shadow brings offbalance sheet and accounting gimmicks. but in the end, insolvency is insolvency. this time around there was a bailout, and it seems there's always going to be bailouts. if you're betting on the end of the world financially, my advice to you, don't trade off of it. listen to people like jim cramer, go with it, invest, try to pick the best you can. but in the end, trying to postpone insolvency forever with

shadowy issues or accounting gimmicks or fed or central bank programs, there's going to come one time where we don't bounce back because in the end, what we're doing is, we're lopping off the variance of the reality of the output of economies to shadowy issues that sooner or later may catch up with us, and i hope they don't. carl, back to you. >> rick santelli in chicago, thank you for that. breaking news on southwest airlines. for that, we turn to phil lebeau. >> a long time coming but southwest announced that it will begin international flights starting on july 1st, going to the bahamas, aruba, jamaica, just the beginning. initial flights out of atlanta and then eventually over the next year they're go doing a rapid expansion into destinations in the caribbean, eventually latin america. southwest airlines no longer a domestic carrier. it will begin international flights starting july 1st. back to you. >> phil, thanks. think about this, for the average price of a super bowl

ticket during that same week in new york city you could do all of this, see the knicks play the heat, see the black keys in concert, see billy joel live at garden and take in hockey watching the rangers play the islanders. want to go to the big game? we'll talk to the ceo how to get there when we come right back. [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.

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comcast nbcuniversal it's a live shot of what's called super bowl boulevard in new york city. the super bowl around the corner this sunday, said to be the most expensive ever. what about ticket prices? the average list price for this sun's game $3,019.99. jesse lawrence, ceo of tickiq. he joins us at post 9. great to see you. >> good morning. >> everybody thinks it's -- it's prohibitively expensive to go to the games. is that true all the time. >> it is relatively speaking. compared to other super bowls this is one of the cheapest in

the five years we've been tracking the market. >> the cheapest in five years? >> yeah. >> why is that? weather, some other dynamics. >> a combination of weather. new york's not selling itself. distance a big factor. combined teams have 4600 miles to go to get to new york. people are waiting. people are sitting and letting the market drop. >> what do you mean, new york isn't selling it self-? its been snowing, digging out from ten inches of snow over the last week or so. >> it's not as if the committee behind the super bowl has been doing something different. >> mother nature. >> no, no, absolutely. >> not only is it relatively cheap, the actual spread of prices between the highs and the lows is different than years past. >> absolutely. the lower level seats are going for than average of $1800 and in the past that's been $2500 seat. if you're thinking about going, you want to sort of get out of the elements a bit, lower levels are a good option.

>> suites, speaking of getting out of the elements, those are expensive. >> more expensive than ever. the new york new jersey super bowl committee gave them to sponsors. usually jets giants fans can sell their tickets. they are 5x. >> roughly? >> $500,000. >> wow. is it normal for this late in the season, late in the game, to borrow the phrase, for companies to be making that kind of decision? >> i think people are probably also looking at the market and suite were listing over $1 million last week. i think people who are thinking about going, probably got airlines set up and are watching the suite market tick down. but inventory's low. there's only two or three left. >> for your business, people say, it's the super bowl of such and such. is this the super bowl of watching ticket prices? >> absolutely. this is the super bowl of tickets overall. the biggest goal event of the year for ticket sellers, without

a doubt. you know, coverage of the event from a ticket data stand point, something we do a lot of, unprecedented it's always interesting to see what happens. new york is one of the more interesting events we've seen. >> any contingency plans built into a ticket purchase or taking a gamble on the weather and conditions being in your favor? >> the super bowl did talk about a contingency plan last week, could be friday to monday. friday's a disaster, month is a total disaster. >> saturday would be okay? >> saturday wouldn't impact it tremendously. friday or month, you'd see prices under $500. >> they could give everyone the day off. >> travel plans are the issue. people coming in, going out. >> we've talk about, especially in music and the grammys were last night, the emphasis on live, what live entertainment has done for ticket prices and the industry. billy joel doing an artist in residence at the garden and sold

out for months. how long can that last? >> i'm contributor at forbes and i did a piece two or three weeks ago about how long the residency can last. for each subsequent show, we think three years to go. >> three years? >> wow. >> at a concert per month? >> concert, give or take a concert per month. but, you know, he's the ultimate new york performer. his record before was 12. >> practically outlive msg at this point. >> he could. >> i wonder if we're going to start to see other artists bake in some sort of recurring revenue stream like that at other venues around the country. >> britney spears is doing it in vegas. >> right. >> nothing like the stage of the gashden, which is the world's most famous arena. i think this is unique, but it wouldn't be surprising to see other artists do this model. it's not a bad gig. you get to sleep at home and, you know. >> that was his whole point. stay at home in long island and come in once a month. >> that's right. >> it terms of the game are you

seeing an even split or do you track whether or not people are buying for the broncos or buying to come see their seahawks? >> seahawks are predominantly about 2-1 seahawks to broncos right now. >> wow. >> the 12th man is not only voting with their voices as they do so often, but, you know, buying in greater quantity, it would be the first super bowl they're a really rabid fan base. >> i like when their plane showed up on the tarmac and the pilot flew a 12 flag out the window as they were coming in. that will be a factor in the game. >> probably not as much as at centurylink where they play their home games, but it will certainly be a factor. based on ticket sales we've seen, there will be more seahawks fans than broncos fans. >> are we going to see a last-minute push? could prices change 48 hours before the game? >> an interesting question. we looked at the 2010-11 super bowl in dallas. it was awful weather the week before, but prices dropped 20% the first week, raised 10% in the second week leading up.

so i don't think we'll see that, but i do think we could see a little bit of a bump in this week. and i think now's the time to buy. if you're thinking about buying, there's a good bit of inventory. you don't want to get stuck with no inventory and prices going up. i'd say the next few days are probably a good time. >> a lot of our viewers could actually go. >> i was going to say especially if the market holds up at these levels. >> that's right. >> jesse, that's great stuff. thank you. >> thank you. >> twitter though is falling sharply today despite the fact that as we said the dow is up about 28 points at this hour. we'll get you details on that decline. a little less than 6% now, when we come back. keep it right here.

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welcome back to "squawk on the street." i'm here to talk about career education. that stock is falling more than 4.5% after the company said it received 12 inquiries from state attorney generals related to its enrollment practices and student loans. u.s. education companies have come under great scrutiny for high student dealt loans with low rates of graduation and job placement, career education is certainly the latest in that string. it is a small cap company, carl. >> sheila, thank you for that. look at twitter this morning

down sharply. i think about 6% at last check. recommending to short the stock in yesterday's ber answer. they report on february 59. that will be the first time reporting as a public company. the street doesn't have a good handle. that will be a day of clarity. >> yeah. it took a couple quarters to really work things out. the stock underperformed and finally started to find some stability. interesting on twitter sell out, volumes nothing like we saw at the entd of the year when it was memorably having big moves. >> of course facebook reports after the bell on wednesday, so it's a big week for social in general. big week for cruises too. this news about the explorer of the seas, the royal caribbean ship coming home early because about 600 passengers and crew became ill. it was on a ten-day trip of the caribbean. earnings were good not having a massive effect on the stock. we've seen the industry bounce back again and again. >> that seems to be the big point as that stock is up almost 3%.

we'll be talking to the ceo in just a little bit. it will be interesting to ask him as some are describing this, carl, as an inflection point for the cruise industry generally and as you say the recent sickness on the trip will do anything to thwart it. >> caterpillar actually helping the dow, but the dow potentially looking at a fifth consecutive day down today. we haven't done that since thanksgiving of last year, november 29th through december 12th. we've obviously come down from our highs for the year. we'll see. i thought interesting comments earlier hour about emerging markets, the concerns, degree to which rates come into play what happens to real estate and banks in some of these foreign countries at that point. >> and talking to the journal out in dabos was making the point, i think some forget even the pros don't know what's going on until they know. you can't really trade this with any pre, you know, with any

conclusion in mind. look at today maybe a pause unless you're looking at the nasdaq. >> by the way, if you're just joining us this morning, here's what you missed earlier on. >> welcome to "squawk on the street," here's what's happened so far. >> it's a time where people are sending their money into sort of short-term assets into the u.s. so if there's a pop they can then move. but in the meantime they're getting out of the riskiest things. >> we are going to be moving to the higher range, not way up by 30 of course which at 2,000, the higher range of those historical ranges of p/e, 18, 19, that gives us another 10%, 12% on this market. >> you think china's going to collapse because of a bank and you see they've come in and bailed out on paper, if you decline to be as negative, then you're being kind of stupid. i hate to say that because i know it's good to have many different views, varying views

are fine, but not if the facts change. >> december new home sales dropped. they dropped about 7%. >> we haven't had a correction 10% or more since 2011. historically we have them every 18 months and it's been 30. so we're definitely expecting a pickup in volatility. >> the big worry i have is that china's got a large carry trade, it's a domestic carry trade. that could washout effect ily. there's a lot of capital that's come back into china. that's the point of maximum vulnerability. good monday morning. we're live at post 9 at the new york stock exchange watching the markets. it did appear we were going to get a breather from some of the selling, but that mid-morning bounce didn't last too long. the dow up 18 points, s&p gone negative to 1786. and nasdaq by far the laggard down by 34 points. look at shares of caterpillar

rallying after fourth quarter profit revenue in above estimates. also announced a new $10 billion buyback. the stock adding some 34 points to the dow. and then shares of merck seeing a nice move to the upside after the drugmaker was upgraded to overweight over at morgan stanley talking about some of the things they're doing to fix things like r & d and potentially weighing strategic moves. >> road map begins with the markets. stocks miked after the dow posted worst week in over two years. what to watch for. and with all that volatility people are watching this week's fed meeting very closely. is there actually a chance the fed could put the taper on hold? "the wall street journal" is here to answer that question. and this doesn't sound like a dream vacation, a royal caribbean ship forced to turn around early after 600 people on board have come down sick with a gastro intestinal virus. is this bad news for caribbean's bottom line? we'll ask the ceo, richard fain, in a cnbc exclusive later this hour. markets mixed during this

morning's trading. dow coming off more than a 300-point drop on friday, the worst weekly decline in more than two years. and all these emerging market jitters continue to worry investors. where's the best place for your money now? jerry castellini, good to see you this morning. >> good morning. >> you seem to think this corrective phase isn't over yet. >> no, but don't get too in love with it either. we're down three or four, maybe, five or six. but this is the kind of thing we all talked about at the end of last year. if the market pulled back some, would we get our chance to put capital to work? and now you see us trying to worry about all the different merging market issues and kind of neglecting what's going on with the u.s. economy and the u.s. stocks. i mean, we haven't yet gotten any significant outlooks from companies because we're still in the quiet period. but wait until you get the real earnings reports rolling in here in the next couple weeks. you're going to see a lot of visibility on earnings for 2014. that's likely the bottom in this

corrective phase. >> david, we are getting some initial guidance for the year. i don't know, would you argue it's been especially impressive or not? >> i think you're starting to see some building momentum. obviously the imf raising expectations for developed market economies last year creates a better external environment for many of the exporters around the world. i think you'll get some positive surprises like we saw with caterpillar and other names in the coming weeks. i agree that sets a stage for a stronger 2014. >> david, it's so interesting since this very moment that the imf and the world bank and everyone at davos everyone come out and talked about how great the outlook is for 2014 and currencies which those markets frankly are kind of the leading gauge of where this is all going unraveling in the last couple trading sessions. people are understandably here trying to look and discern whether this signal tells us there's going to be trouble ahead for a lot of the people optimistic this year. >> well, i think you need to look at where those currency pressures came. turkey, political problems.

argentina, political mismanagement. south africa, labor unrest. i mean, those are really the currencies that got hit the hardest. you have to look at what the drivers were last week to start this and get people's attention. and really they're peripheral markets that aren't core to most people's portfolios. china's numbers at the end of last year were better than expected. we expect that to continue to improve as the external environment around the world improves in you were and the u.s. >> jerry, what levels do you think stocks get markedly more interesting than they are right now? >> well, the markedly point is probably that 1750 mark on the s&p. the question is whether we'll break the levels where we're holding at here. and i think a lot of people expect to get down to there pretty quickly. boy, you're going to need more than a trust in china going sour. and i agree with the comments these are peripheral countries. we've been through this a couple times, right? we've been through these, you

know, one-off currency issues. and all they are is distractions. i would suggest to you that there's more people waiting for the buying point. and most of them generally miss that. most investors will be buying higher throughout the year than probably even right now because they'll just be too anxious to try to call a bottom. >> jerry, at the same time a lot of countries in the past that have been responsible for triggering broader global crises, if you will, have never been a big portion of gdp. so i just wonder as you say this still appears to be an environment where the thesis, the growth story is still in tact. but what would tell you that it was really breaking down? i mean, what's kind of your worry point here? >> sure. let's look at all the interbank -- all the libors around the world, make sure those aren't moving up. the vix, which has been a decent forecaster of problems, is still in the teens. and, boy, we haven't seen issues with more structural problems until that gets close to 30.

so those are bigger leading indicators that we're not even close to trigger points on yet. and broadly speaking the global monetary system is still just pouring capital into the global economy. and that's what we all have to focus on. there's still plenty of liquidity out there to drive this and collect people up 3%, 4%, 5% down from here. >> finally, david, it's a long week ahead, we're going to get a fed statement, advanced q-4 gdp, guidance of the year likely for amazon or google. how effectively do you think we can navigate po tenl shl land mines over the next few sessions? >> i think if people focus on fundamentals, folk cuss on the stronger markets like china, hong kong, look at korea, other parts of east asia, poland, mexico, some of these countries are in much better shape than the ones grabbing headlines. there are some we need to be careful in like indonesia, india, turkey, argentina, those are going to be some problem

areas. but let's -- moment of sober reflection i think will remind people that many of these economies are in the best shape they've been in in years. >> david rediel, jerry, thank you so much. >> thank you. we have a news alert. ad adobe releasing information on social media intelligence. >> facebook and a few others cht i want to point out this is not just a little bit of point data. it's a $240 billion facebook ad impressions this is based on. more than 500 million social networking site visits. here's what's adobe is saying. we should read through into facebook earnings and perhaps moves into social stocks we're seeing. it's not just twitter that's down nearly 7% this morning. yelp is down about 6%. net suite down 4%, jive down 4%. li linkedin down 3.5%.

facebook at click through rate was up 365% year over year, 41% quarter on quarter. cpn ad rates up quite a bit. but costs per click was flat year over year, up 29% quarter over quarter, that's lower than expected. so they'll give and take there. and some interesting data for other social networks. they're starting to get more share of valuable traffic into retailers. so when people leave twitter, click through to a site, this is measuring how much they actually spend when they click through from a twitter link or a tumblr link. for tumblr up 43%. these are probably blogs, fashion blogs or whatever people are clicking on. but shows the potential for tumblr to make revenue on. pinterest up 240%. they're going to try to start

monetizing more this year. facebook, 72%. so they're losing some overall social share of those valuable retail clicks, but then again facebook is the one that knows how to monetize these thus far. >> yeah, i think people are looking for reasons why twitter is down 6% today. i wonder if that could be potentially one way of looking at the glass half empty. >> or maybe it's a glass half full if you see the valuable customers are actually clicking through on twitter to these sites and buying stuff, so the opportunity is there if twitter can figure out how to monetize those folks for them to do that. >> again, apple tonight, right? >> yep. >> everybody knows it's not just going to be about iphone shipments but how china's coming along and how carl's coming along. >> yeah. and, you know, i think the emerging markets are important to apple's story, particularly because of guidance. the holiday quarter is very much weighted toward developed markets and greater china, but after that say last year we saw asia pacific go from a little over 7% of revenue to around 12%

of revenue. so if asia pacific, the rest of asia pacific, is not as strong this year, that could effect what we see from apple. also want to watch gross margin guidance because we see them projecting a lot of capital spending this year. we expect to see a new design on the iphone. that always costs them because they retool for it. >> that's what i was going to ask. most of the broader public all they want to know are we getting an iphone with a bigger screen. >> i don't know if we'll be able to read quite that much into it, but this is after an s year. we've got the 5s now, after you get a new number you get a new design. now would be the time to come out with a bigger phone. >> we don't expect any china mobile phones to be booked this quarter, correct? or very few? >> i guess we'll see. you mean in the quarter they reported? >> yes, the december quarter. >> right. we don't expect to see much in the december quarter, but they are giving guidance. so we should expect questions from analysts about just how bullish they are. >> cramer's point this morning is their conference call in his words tend not to be works of

art. do you go along with that? >> i would say they tend not to be works of science. they are works of art. you've got to read between the lines. >> that's exactly how it goes. busy night ahead for you, jon, thanks. >> see you on "closing bell." >> that will be a lot of fun. thank you. it was quite the week for the markets after the major moves to the downside on thursday and friday. as we approach the next fed meeting of course which begins tomorrow is that taper still on as planned? we will talk to the man in just a moment. but first, rick santelli watching some technicals this morning. >> absolutely, carl. you know, cnbc does a wonderful job of showcasing widely held stocks. well, when it comes to technicians, nobody's held more highly than tom demark. he's going to look at three charts with us, u.s. stocks, shanghai index, chinese stocks and the gold market. and at the end of last year he was one of the few who called for a bounce. don't miss tom demark and his technical magic bottom of the hour.

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buyback program. investors liking that news. also in the news is honeywell, textron and ingersoll-rand. after last week's market volatility, some are expecting we could see a change in the fed's bond buying program. our man, steve liesman is back with that. >> nor currency volatility or a weak december employment report will stave the federal reserve policymakers from their not so swift qe-3 this years. everyone thinks the fed will taper by $10 billion at this meeting. and probably continue for the rest of the year. here's the way of thinking about how the fed considers a crisis like this. first, does it change the forecast for growth, inflation and unemployment? answer, probably not. second, does it represent systemic risk to the financial system? again, answer probably not. and, third and finally, are underlying macroeconomics

troubling? officials i spoke with see the events of the past several days as more episodic than upheavals and long standing changes within the policy. they add there's a big difference in the selloff compared to earlier this year in may and june where the countries affected will be connected. >> some will have very key elections. most of these elections have a high level of uncertainty attached to them. india's having elections, turkey's having elections. brazil's having elections for just to name a few. these are all very complicated. >> that's bob former treasury at goldman sachs. external debt as percent of gdp. you can see the rise for south africa. this is the external debt, the debt in dollars for example. and turkey, you know, pretty much consistent. no big change. and when you look at relative to the ten-year average, percent

again of gdp, some quite a bit higher, some just a little higher. this is fed chairman ben bernanke's last meeting after eight years as fed chair. janet yellin takes over as chair on february 1st. her first meeting will be in march when there will be a press conference. i have to think far more than the ar genergentina pe so -- fe likely to address through guidance rather than more or less qe. >> we want to stay with the fed. our next guest saying it's likely the fed will use framing interest rate guidance as a tool to address what's going on in markets. the chief economics correspondent for "the wall street journal." john, great to see you. >> great to be here. >> i wonder what kind of conversations you think the fomc might have had over the weekend watching what happened to the markets on friday? >> you know, i think they talked about it. jong they're going to be very alarmed by it. obviously it's going to come up, it's going to be part of their discussions tuesday and

wednesday. but i think steve laid it out, i think he hit the nail on the head. this doesn't look like something that is going to fundamentally change the fed's forecast for the economy. and looks like something that really is a systemic problem in the u.s. so i think they stay on the course that they've set out. >> which is interesting, jon, because if this were a fed that was in 2011, 2012 maybe even looking at an unsteady global growth, markets might say better safe than sorry. this doesn't feel like a better safe than sorry fed anymore, is it? >> well, no. in part because they think the economic backdrop is improving and that it's not getting worse. you know, we saw a pretty decent pickup in economic growth in the second half of last year. and they think that's going to carry through into 2014. you know, the headwinds that really worried them last year were things like fiscal policy in the united states. that looks like it will be less

of a headwind in 2014 than 2014. that's why i think they look past this. the other thing about the selloff we're seeing in emerging marketing is, you know, it's only been a few days here in which it was really intense. i think you have to see more evidence that it's long lasting and systemic before it really gets your attention. >> at the same time, steve, did we learn something about the global financial system? and did we learn that it's in facted overleveraged or perhaps too much hot money, however you want to describe it? if i'm the fed and said before i'm worried about financial stability, do you think this is part of the fed testing the the markets here as much as markets trying to test the fed especially under the new incoming chair? >> i think that's a great question, kelly. i think the fed is prepared for and thought about what kind of reaction it will get from emerging markets. i think the reaction is not a total surprise to them. i don't think it is to guys who really follow these markets. at the same time it's really hard to know what the leverage is. i don't think we've progressed

to the point where i think we can see for example there's x amount of systemic risk in the u.s. banking system or the global system from leverage trades in argentina. one way you can look at it is through price action. i don't think the price action so far, i have to underscore, suggests that there is tremendous leverage out there in the carry trade. there are people left unwanted positions and one of the interesting things is bernanke said from the may selloff that he was pleased with one aspect of it is he thought it shook out some of the excess leverage in the system. >> exactly. jon, what do you think about that? >> again, i think steve is right on. i think one of the big questions right now is whether the markets really did shake out all of that leverage last year. there's a question of whether investors put it back on as we got into this tapering and they saw that the markets were behaving. maybe they relevered on this. i think one of the things that people can't forget is that, yes, the fed is pulling back on this bond buying, but they've said that we're going to have

interest rates near zero, you know, probably into 2015. and then even after 2015 they're going to stay very low. i mean, that really encourages risk taking and leverage far out into the future. and i think that's something that they're going to have to watch very carefully. >> steven, walk us through the degree to which the fed is probably communicating with central banks out of turkey and argentina. >> there is communication, but i'm not -- i think the communication is basically, look, we're going to pursue our policy that we believe is best for the united states. and we understand that pursuing a policy that iss inorder nantl damaging to the global economy is not for the u.s. but i think there's been a consistent message. that message has come more so from christine lagarde from the imf who has come forward and said, you know what, guys, don't waste this time that you've bought with quantitative easing to not reform either your monetary policy or your fiscal

policy. i think that's one of the dangers here that's probably coming home to roost is that they haven't used that time to reform their policies. and so there is going to be some knock-on effect from the tapering here. i'm not sure the fed chairman goes on the phone with the turkish central bank and says we're going to change our policy because of what's happening in your markets. >> i think there's a debate that underlines what's going on among central bankers. a lot of the emerging market central bankers have pressed the fed over the last couple years. they were unhappy with qe-2 and qe-3 because they thought it created hot money flows into their markets. >> right. >> and then they were unhappy when the fed said they were pulling back because they thought it was pulling hot money flows out of their mashlgts. the central bank of india has been arguing this for a while that the fed needs to take into account the global spillovers their policies -- it needs to be a bigger factor in their thinking. but bernanke's argument all along is you have to take care

of your own business. we're taking care of our own business. and, you know, it's your responsibility to take care of your domestic markets. and i think that's the fed's attitude going into this meeting is that, you know, if china's got growth problems right now, well that's china's problem. and if turkey and these other central banks have problems, then they should have been more aggressive about managing their whatever imbalances they had a couple years ago. >> sounds like a game theory problem. jon, great to see you. steve, thanks so much. we'll move on as we watch these markets try to make heads and tails of all. thanks, guys. >> meantime breaking news regarding an early exchange operator at bitcoin. >> hey, carl. the department of financial services of new york holding a two-day hearing on bitcoin tomorrow. u.s. attorney of the new york southern district announcing charges against two individuals, robert faella and charlie shrim,

an underground bitcoin exchange, shrim is the compliance officer of bitcoin exchange company. they are charged with engaging in a scheme to sell over $1 million in bitcoin to users of silk road, which is an underground website that allowed some of its users to buy drugs and engage in other nefarious activities. the two were conspireing to commit money laundering. we want to note that cnbc did interview shrim a while back because he was part owner of a bar that had started accepting bitcoin, this was some time last year. but again, two individuals charged in that scheme. back to you. >> thank you very much, mary thompson on the floor watching that. jon joining us onset. from u.s. attorney, it's a startling collision between this new cyber currency and the underground world of illegal drugs. >> it's a really puzzling moment, i think, for bitcoin. on one hand you have folks like

noted silicone entrepreneur and on the other hand you have silk road and things like this, actually the company charlie shrim was ceo of, i believe the winkle vos twins back in their investment. they have an heir of legitimacy whatever you think of facebook. so you have this "good money," names that we know excited about bitcoin and then things like this happening and silk road and questions about just how much bitcoin is involved in this murky underworld of not so straightforward transactions. it will be very important i think for the future of this currency to see how this turns out. >> and the statement says truly innovative business models don't need to resort to old fashion law breaking and when bitcoin or any other untraditional currency are used to fuse criminal activity, law enforcement has no

choice but to act. >> i think this is always the way with technology, right? there are lots of different ways to use it. we'll have to see how some of these backers like an drees and har ro wits come behind this and build some legitimate businesses on top of bitcoin to restore confidence and maybe even add some confidence to what's going on here. i think just these companies, your subways, your car dealerships accepting payment in bitcoin isn't going to cut it to really push this currency forward. >> and we are having new york with their hearings regarding the currency, which i can't imagine it's timed to coincide with those. >> it's so interesting. >> the arrest happened last night at jfk. interesting. thank you very much, jon fortt. we'll continue to try to make sense of that story. when we come back, this was not the luxury many people hoping for, royal caribbean ship explorer of the seas returning to port two days early after an outbreak of a gastrointestinal

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we talk a lot about etfs here on cnbc, but for the uninitiated, what does an etf do and why should you consider owning one? bob pisani is live from the etf conference in hollywood, florida. good morning, bob. >> hey, carl. i'm in etf heaven. 1600 advisors here, all the big etf players. if you don't know a lot about etfs, there's some good reasons why you should consider adding them to your portfolio. here's why. an exchange traded fund or etf is a fund that holds stocks, bonds or commodities. most etfs track indexes like the s&p 500. but you can invest in almost any asset class, tech stocks, industrial stocks, municipal

bonds, japanese stocks, physical gold or silver. the big attraction is that unlike mutual funds etfs trade like stocks and can be bought and sold during the trading day. etfs are also more tax efficient and usually have lower costs than mutual funds. thanks to these advantages, investments in etfs have surged in the last few years. at the end of 2013 there were a little more than 1300 funds in the u.s. with a combined value of $1.7 trillion. that's only about one-tenth of the money in mutual funds, but it's jumping quickly, up 26% last year. trading in tefzs are growing fast as well. they now account for 15% of the volume of stocks listed across all exchanges. so let me tell you what's hot at this conference. two, three things are really hot. number one, who do you do with emerging market etfs? there's a lot of questions here that put a lot of people into

these market etfs, and they've been very successful but there's questions about how long that can go on and whether we're in for a move to the downside. interest now is currency-hedged etfs. remember that dxj? japan hedged etf last year. that was really popular. deutsche bank is getting a lot of inquiries about the series of hedged currency etfs they have in mexico, south korea and other emerging markets. that's a hot topic. second big topic, actively managed etfs. we've talked about it for a few years, but the managers don't want to show every day what kind of holdings they have. they hope the s.e.c. will make a ruling in the next few months allowing them not to publish every day what their holdings are to hold for a short period of time. finally, pimco just announced 19 new funds, carl, whole mix of emerging markets, some also in bonds and some in the equities area. i'll get you a list of that very shortly on trader talk. back to you. >> all right. bob pisani in etf heaven today. thanks so much, bob.

markets are closing across continental europe. it's about 11:30 on the east coast. worries about emerging markets and disappointing corporate news combining to weigh on stocks. a pair of british blue chips dragging the ftse to five-week lows. bg group tumbling partly due to some turmoil in egypt. and as for vodaphone, it does not intend to bid for the mobile operator, that in response to speculation about a potential deal. speaking of m&a, john malone acquiring zigo for $13.7 in cash and stock after ziggo rejected an earlier offer. we know malone has been interested in europe for a long time. >> the data out of germany, carl, was stronger than expected today. not doing too much for the market there though. coming up, royal caribbean making headlines after one of its ships had to turn back

early. today, royal caribbean stock rallying after reporting strong earnings in the fourth quarter. it's up almost 2%. could this latest news overshadow that? we'll ask the ceo of royal caribbean in a cnbc exclusive in just a moment. ♪

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trouble ahead. michelle caruso-cabrera is back at headquarters with more details. >> two countries of the corner stone of the selloff that started last week. the turkish leer recovering a little bit today. remember when you look at these currency charts they're a little counterintuitive. you're looking at a chart of a dollar versus leer. you can see the dollar getting stronger and stronger and then peaking early this morning. switch to the two-day chart to explain what happens next. like i said the dollar peaks, the leer bottoms early this morning. as soon as turkey's central bank announces they're going to hold an emergency meeting tomorrow and they will announce the outcome of that meeting at midnight in turkey. why? because that's 5:00 p.m. in new york after the u.s. market closes. put that on your pile under tomorrow 5:00 p.m. eastern time. the reason the currency is strengthening now because of that announcement, it's assumed they're going to announce a hike in interest rates, a big one. anywhere from 2.5%, some economists hazarding the

possibility of a 4.25% hike from current rates of 7.75%. overnight anywhere between 10% and 12%. arrange tina we're waiting to see what happens today because it's the first time in two years arj tines can go to a bank and get dollars rather than having to buy the dollars on the black market. the central bank has allowed the official rate to weaken so much that once you add in the 20% taxes, the cost of the u.s. dollar either at the bank or on the black market pretty much equal to the official rate. why on earth do argentinas want to own dollars? because as you know, carl and kelly, for years that economy has stunk so bad the currency is horrendous and much prefer to hold dollars which they have a lot more confidence in. >> that's true, michelle. as you say these are two countries that are going to be the focal point for people not necessarily because they themselves represent any kind of con teenageon, but a litmus test. >> absolutely.

>> michelle caruso-cabrera back at headquarters. let's get to rick santelli in chicago. looking at key levels here, rick. >> absolutely. and thank you. three widely followed markets, the s&p, shanghai composite and gold market. one widely followed technical analyst, tom demark. tom, welcome. take it away. >> great to be back, rick. i appreciate it. >> thank you. >> i think on october 9th we came out with a release comparing the stock market at that time with 1929, the august 9th low. we forecasted 12% move and on the air december 19th with you we forecasted the top of january 14th. as it turned out the s&p cash topped on january 15th. whereas the dow jones average topped on december 31st. at that time we said that the -- we had identified a comparison which seemed to be pretty correct at the time. we still feel that way that the

dow jones 1929 and current markets were almost in overlay. by reality a 12% move they were exactly an overlay. now we want this to be very critical. we've got to watch this decline. it's unfolding as we expected. what we've got to monitor very closely is 1767.20 on the s&p cash and 1762.20 on the futures. if we were to break those two levels in unison ideally with the prior close being an up close, the prior day to the break being an up close, then we've got something that looks pretty significant on a downside. we're still qualified. this is the most critical stage. we've had three swats or three attempts at the pinata on this move up in the last year and a half. all three times we suspected a top the market unfolded quickly, sold off but then recovered. >> well, tom, let's switch gears here a little bit. now, you are spot-on and i think that chart gives me the chills

going back against '29. give me something on the shanghai composite here quickly for viewers. >> okay. december 2012 to the exact date of the low we called the bottom on the shanghai index on december 4th. subsequent to february 6th high we called the high. we were looking for a 48% rally, we only accomplished a 25%. we adapted to the supply-demand of the market. we forecasted the decline into the june low, the day of the low in fact, we identify what we call a 13. so it was perfect through those three points. and in fact the september high was called right to the day. now, last week -- last sunday we identified a bottom, potential bottom. we think the shanghai still go down to 1959. we think it will hold. we're confident it will hold. people are correlating that the with the u.s. markets. there's really no correlation. >> tom, there's never enough time. we're going to have to stop there. we're going to bring you back and concentrate only on gold.

squawk on the street gang back to you. thank you. shares of royal caribbean rallying today, but there may be trouble on the horizon. the ship explorer on the seas is returning to port several days early after over 600 people got sick with a gastrointestinal virus. how much of an impact on the company could that have? we'll ask the ceo in a cnbc exclusive in just a moment. and it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab.

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coming up at the top of the hour, the emerging market threat leading to heavy losses last week, so what now? well, we've assembled a panel of experts including energy expert mark fisher to help answer the most important questions you need to know. and we are trading apple with only hours left ahead of its earnings release this afternoon. shares of cat flying high today, but is the company too focused on china? we have a full and a fair battling it out over cat. it's all straight ahead at the top of the hour. see you in about 15. >> sounds good, scott, thanks. royal caribbean reporting forty quarter earnings that did beat estimates this morning and delivering upbeat guidance for the year. could that be overshadowed by the news of an illness outbreak on one of its cruises? richard fain, the chairman and ceo of royal caribbean, richard, great to have you. thank you so much for coming on. >> thank you, it's good to be back. >> i want to get to the quarter in a second, but is there an update on the explorer of the

seas either from you or the cdc this morning? >> well, yes. it was a very unfortunate incident, of course. we're lucky that it's so rare and our people responded very quickly, very aggressively. and so now the issue is waning. it is coming back early. so we have a chance to really do a thorough cleaning. obviously we will be compensating the passengers. our people really do feel very badly that something like this happens, but unfortunately this is a bad time of year. >> i went back, the cdc keeps a list of all the outbreaks that qualify as being basically major outbreaks. and i went back over the past few years. in 2009, 15. the next year 14. 14, 16, 9. i mean, this is happening with some regularity, when if ever is it going to have a significant impact on bookings? >> well, i don't think it has a big impact on bookings because

most people understand just how common this thing is. it's the second most common illness in america. of course you up in the north are having bad weather and the winter this kind of thing does occur. unfortunately, an outbreak is defined as only 3% of the people. and it's still a very rare occurrence. so we don't think it's going to have a big impact on our year. and we just released our expectations for the year and they're looking pretty good. >> and, richard, just to talk about that for a second. a lot of people have been looking for an inflection point, i guess, both in the u.s. cruise industry and for better trends out of asia. i just wonder as we look at a china which continues to defy those growth expectations, struggle a little bit with demand internally, how confident are you that there will be a growing -- a booming market for cruising in china and across asia? >> you know, asia has been one of our big success stories. and we're not really dependent

on the overall growth of china per se because cruising is so new. so you're starting with something we're getting great growth, but we're starting from such a small base that the middle class that's already grown there is more than sufficient to absorb us and continue to grow at very high rates. i think china is one of our big success stories in 2013 and '14 looks even better. >> what about though -- i mean, we know there are lots of airborne illnesses, viruses that have come out of asia over the last decade or so. we know that there are a lot of concerns about air quality and about health generally. so if the u.s. is struggling with these outbreaks on cruise ships, how do you know that consumers or cruisers in china won't be sometitymied by their concerns that they're going to get sick? >> the good news it is very rare here and it's very rare there.

and the chinese of course are very conscious of all kinds of safety issues. but the beauty of cruising when it comes to health and everything else is it's extraordinarily safe. it has an amazing track record. so they are comfortable, they are booking the cruise. they continue to do so. and i think as we look at our current bookings and our forward bookings, we think this is going to be another truly strong year in china, and actually the rest of asia. we shouldn't only focus on china. australia is a very powerful market for us. hong kong has been terrific. so the whole asian area is a growth market for us. >> even when we don't see an impact on bookings, sometimes we do see a short impact on pricing. and i wonder if you think 2014 will be the year where because of these outbreaks you do have to give customers a little bit more of a break than you're used to. >> i think what we're seeing is people think that when these

things do happen, we react quickly and aggressively and we compensate very fairly. so we're really not expecting this to have a big impact. the timing is unfortunate. i think if we were doing this on anything other than the day that we are having our earnings announcement, we probably wouldn't be having this conversation. >> is there -- will there be any attempt to -- i know when you take a cruise you basically have to testify that you haven't been sick for a certain period of time leading up to that cruise. is the screening of passengers going to have to change over time? >> well, we do screen our passengers to the extent we can. but you live up in the northeast. you know how difficult it is. illness, particularly in the wintertime, is a factor. it's a factor of life everywhere. the cruise ship is maybe a little different because people are more aware of it because we report it better. when you go to the movie theater and you get ill, you don't report you got it in a movie theater, so that distinguishes us. but as a practical matter we do

and we will continue the screening, but the real thing we do is we do an amazing job of helping those guests who do get ill of cleaning so that the likelihood of contamination is low. and i think people recognize that. >> and, richard, just quickly as well, can't let you go without asking about the u.s. consumer here in the early part of the year as we're, you know, markets casting around for a little bit of direction, what can you tell us about the demand trends that you're seeing? >> well, we actually think that we are a good indicator of what's happening because this is our biggest booking period. and if people are feeling good, they're booking their cruise, we book fairly far out in advance. we start the year with more than half of our year already booked. and january's been a big booking year for us. and it's been a solid booking year so far. it's off to a decent start. we're seeing people who are booking and i think that does well not only for us but i think it says that the consumer is feeling good, is making

purchases, is looking forward. and i think that probably well for not only the cruise industry but also the economy as a whole. >> richard fain joining us from miami today. richard, thanks so much for your time. >> thank you. i enjoyed it. >> when we come back with the dow down about 18 points this morning. not quite to the session lows, but we'll see. long afternoon session ahead, kelly. >> we have given up those early gains. trading in mixed territory across these major indexes. is this the end of the pullback? or is it continuing? the one and only art cashin is here. we'll have insight next. we know we're not the center of your life,

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stocks are mixed this morning after dow posted its biggest decline in the last two years. never thought we'd say thank goodness for caterpillar, but we are. >> it is. it's a saving grace. well, we've got a couple of saving graces. as a matter of fact, one thing the viewers should keep in the back of their mind for the next two weeks is that the polar vortex, the big freeze up north, it's turning into a get out of jail free card. even the housing data this morning you're already hearing people say, well, part of it is the big freeze. you're going to get a free card going into the payroll number. >> an excuse. >> it's the perfect excuse. and nobody can rebut it. anyway, caterpillar as you say is helping.

a bit of a strange market. the ten-year and dollar index were both virtually motionless this morning, which tells you that the crisis was not continuing to spiral. also other currency markets were flat. equity markets throughout still look at people trying to pair risk. i want to cut down my risk. i'm not certain that everything's there. and that's where we are. so i would watch the ten-year as a signal that maybe this could turn into something bigger. >> you know, futures at least for the dow, the s&p too actually, we opened up okay and we've sen broken down. i wondered if that was the new home sales report or is something else going on? >> was partly the new home sales report, but we've developed a kind of pattern recently in 2014 where you open and even if you open better, it tends to get wasted. and as you move into the european close, prices go weaker. we've bottomed around the european close several times. will be interesting to see if they do that again today.

>> great point, art. thank you so much for joining us this morning. art cashin. check out shares of twitter in the meantime down big this morning. we'll try to explain what's going on here and with some other social media names when we come back. keep it right here. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. (voseeker of the sublime.ro. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental

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take a look at shares of twitter. we know it's volatile, but that's an interesting intraday chart here down almost 8% to 57.10. talked with jon fortt earlier in the hour about some metrics coming out from adobe about social companies in general. but seems like february 5th when they report is a long ways away still. >>is aays away. and those numbers from adobe are actually promising for companies like twitter that could stand to monetize more. basically saying when people click through, not necessarily on an ad, but on somebody's tweet about a product, those people actually tend to buy. but i'm looking at a lot of the stocks i watch and name off a few, workday, splunt, linkedin, rag space, open table, jive. all of those down nearly 3% or more. a lot have to do with the cloud. a lot have pretty lofty valuations. so not exactly sure what's getting all of those down, socl is down quite a bit, the social

media etf. maybe that's to do with it. but rough day for them. >> have to watch that and your emerging markets and currencies this afternoon. >> you'll just have to stay tuned. >> and apple by the way. >> fortt will be rejoining us, those hit around 4:30. >> of course we'll send it over to scott wapner who will take over with the "halftime". >> lows of the day still feels like a sell first market, doesn't it to you guys down there? all these dips were being bought last year. not a lot of buyers out there yet. still waiting for them. >> yeah, cramer's point this morning was for those who couldn't get out on friday they took this morning as another chance. and clearly that led to some weakness today. >> yep. we're at the lows of the day right now. guys, see you again tomorrow. thanks so much. welcome to "the halftime" show. we're following big stories on the street today, core holding, what will apple deliver after the bell and will it be enough to jump start that stock? big cat after earnings beat expectations and the stock rips, what happens now to this battleground name? perfect storm with nat gas