and public and the world population, less salt, less sugar but more of everything else that's nice and spicy. that's where the iff and christian hanson fit. in infrastructure we need. >> mario, thank you very much. >> always a privilege. >> join us tomorrow. "squawk on the street" begins right now. good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. david faber is at the communications conference. it has been 1 1/2 months since the dow fell two days this a row. today might break that street. premarket rough on worries about the fed signaling an end. shanghai had its worst day in

five years. our road map begins with the sell-off in the markets. renewed concerns about the economy. just out, abercrombie and fitch ceo stepping down. a controversial figure on cramer's wall of shame. stock's up 8%. verizon with a warning, a surge in new subscribers, but promotions and price cuts are going to hurt profits. first up, stocks on track to extend losses the day after the s&p recorded its worst day since october. got weakness in the energy sector. got worries about the fed changing language. on december 16 and 17th. something you were tweeting about at 4:00 this morning. >> right. one of the things you have to accept is when we are doing better than everybody else, it's ridiculous for the fed to stick by the considerable time. a lot of time has passed. considerable time, there is a finite moment. if you keep saying considerable time, you are getting closer to that moment and we're there. i don't even think necessarily

that is what's causing this. china was just a big reversal. greece. we are back with greece. they were 30 but the market is down badly, a change in government. verizon has been a bedrock stock. it's jarring. even though here we are, i don't know a single person who wasn't trying to figure out whether they should switch to sprint or t-mobile so it was a natural price war. spirit air got a downgrade. people are sounding like there could be a price war in airlines. airlines, telco, greece, china. i think it's funny oil is not down a lot today yet we are talking about all the projects that will be canceled. >> that is page one of the "new york times." conocophillips, bp. conoco cutting capex 20%. >> they would be silly not to. you have to cut off some of the things.

our cash flow doesn't cover a lot. we cut it back. you have to look at these held by production clauses. what that means is if you bought land and a lot of these guys bought land, you've got to keep drilling no matter what. the lease says that. those guys are in trouble. conoco is not in trouble, but the stock is up substantially to where it was last time oil was down here. conoco is too high. >> david should make instanting discussion at the conference. >> on the verizon front is where we'll get to hear key perhaps more details. the cfo of verizon scheduled to speak at 10:00. right now john stevens is speaking in the room to my right. he's the cfo of at&t. expected to weigh if a bit perhaps and provide perspective on their quarter and how it's going. particularly in light of what we are seeing from verizon.

yes, it's sort of a good news/bad news, isn't it? they say we've got a lot of activity, but they seem to have been sucked in to what they managed to stay out of, namely the fray of having to reprice all your customer base and reprice it down. at&t has been doing that. we know what's been going on with t-mobile and sprint. it does seem verizon is not immune. >> i thought this was somewhat shocking they could get away with this. it's so sticky and everyone likes verizon. we like verizon until we look at that bill. we hear what sprint is doing. i was dealing with the chief technology guy. he said i wanted to get to sprint so fast because my monthly bill is x. this is the conversation in the country. your monthly bill in telco, you cut that, monthly bill in gasoline, suddenly you have more extra income. it's for real. it's for real. >> we'll keep our eye on that.

obviously more to come from david. we mentioned abercrombie announcing michael jeffries is retiring as ceo effective immediately. the board commenced a search for his successor. arthur martinez a name well known in retail circles going to be interim chief. jeffrey just leaving now. >> he's on the wall of shame. i said anybody on the wall of shame, i said if they were to step down, you would have immediate consequences to the stock of a rally. that is what's happening. martinez, i'm not quite sure his worth during the beginning of the destruction of sears may necessarily play into the idea of trying to have guys who hold their shirts up and have six packs. jeffries was trying to be the coolest guy in the world. martinez may be the least cool guy in the world. how about somewhere in between? abercrombie is in that difficult moment with teen apparel where nobody knows what to do.

a guy who was a very good craftsman and kenmore washer guy may not be the answer to abercrombie. tools? a bag of hammers isn't as good as a nice outfit from hollister. >> it does bring to mind upgrades, lulu, american eagle to outperform. bold bets here. >> my charitable trust holds lulu. i don't want to see any expectations. that's okay because the los angeles saved us. bank of america is taking things down right up front. now we don't have to worry that the banks will underperform since they are underperforming today. >> b of a, some slide presentations. talking about near term revenue head winds. >> i've got to believe that will apply to other banks, too. it wouldn't shock me. david and i were joking

beforehand, merck, a company i like, they had done the cutest deal. sorry, i shouldn't be laughing. this is a real american company. had merck done the real today, i don't believe they would be paying the same amount as yesterday. >> no. i'm glad you mentioned it because i talked about this yesterday. this case hospira had to try to bring their key drug, 90% of sales, to market sooner than later with a generic competitor. i'll ask the question, if you're merck and you know this case is out there and you know conceivably it will bring generic competition much sooner to the only real drug this company has. yes, it's about the pipeline, but still the only drug they have and you're paying seven years worth of sales for this company, why wouldn't you wait until you saw the results of

that case? and the fact that it actually happened the same day they announced the deal, i'm sorry. i find -- i'm almost incredulous what is merck thinking necessarily there? i don't know where this stock would have opened today if merck was not buying the company for $102 a share. it would be significantly lower. talking about a generic competitor that will come on the market june of '16 to a drug that is their main drug. yes, i know it's about the future pipeline. we are not going to have generic competition until 2018. they signed a deal with teva. it moves up the generic competition from everybody much sooner. >> this is one of those -- i could apologize for merck. was there someone waiting in the wings and they had to move faster? i'm not hearing that? >> i'm not hearing it either. i don't know the answer. good question. i don't know if they simply got played here really well.

>> right. >> did they cubist have an idea it was coming sooner than later? did they want it done before they heard the decision? when you're merck and the ceo or the board and you look at this, you think would we have had the opportunity perhaps to buy this company because we think it's a smart thing to do but come back and do it at a far lower price? again, who knows if they would have been a seller? there is no doubt in my mind. i defer to you. that stock would have been down and sharply. the one drug facing generic competition. >> the company endorsed a number that would have given you a year, 1 1/2 years more. that does matter. obviously cubist would have been downgraded by a number of firms. if merck wanted to act they would have gotten a better price. they overpaid. they must think there is something in the pipe better. i've been trying to be such a diplomat. when you're here i just want to

raise eyebrows. i'm raising both eyebrows on this at merck so no one at merck would say jim dumped on us and said we are idiots and morons and why didn't we wait. i'm not going there. i'm not calling them idiots, morons or fools, i'm just saying it raises eyebrows. >> i think that was very well stated, jim with. >> i'm not gandhi. i know that. >> no. you're not saying they got pantsed or anything like that. >> that march to the sea was nasty. >> david, what's coming up at the ubs conference later today. >> we are going to be talking to chris albrecht. a lot of takeover speculation involving starz. we'll ask about that and other things about their original

programming. netflix got that "marco polo" show. starz originally had an opportunity at that. and david zaslav who runs discovery. you want to talk about the bundle and over the top. a key issue is good old-fashioned advertising. whether it's still going to be there in the way it was previously or whether we are seeing something of a new world and ratings with it. later today jeff bewkes will be my guest. first time he's spoken on tv, i believe it is, certainly since successfully defending his company from an unsolicited bid from fox. plenty to talk about him. and an extraordinarily well-performing stock. on the targets he put out there not long ago from 2017 to 2018. >> and verizon will take a lot of oxygen out of the room. verizon down 3.5% in the premarket. that will affect the dow.

we've got targets lowered at credit suisse, cowen, macquarie lowering target. >> and bank of america. this could be consistent with a lot of banks. wouldn't be surprised to see a lot of major banks be down today. october was choppy. you have the banks. you have the telcos. you've got merck trading down off what some may say is the most stupid thing of ages. it's raising eyebrows. raymond james downgrading spirit. that had been the leader of the airline group. right now it's a little ugly. >> is the willingness to sell a gainer you had more acute because you are trying to make up for margin losses on the downside of energy, for instance? >> yeah. one of the things, we've been going consistently oil goes

down. if oil stops going down, we are not going to raise numbers. do i think oil is done? no. i think oil can go lower. saudis said $60 is the level. we'll do 10 million barrels next year in the united states. it's not a great moment. just not a great moment, other than abercrombie. new guy turns the place into washing machines, tools. sears has everything. when we come back, apple and tesla off a rough monday on wall street. tesla down seven straight days. we'll look at what's ahead for both stocks. >> under armour founder and ceo kevin plank.

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shares of apple and tesla extending loss. apple lost $42 billion in market cap since november. tesla down 5%. 25% from its all-time highs.

s&p roughly flat. apple down 6%, tesla down 13. >> apple had been the big leader. it's perfectly realistic taking profit. i think no stocks just grow to the sky this. has grown 660. it did exceed market capitalization with cisco at the top in march 2000. tesla, i know people want to say tesla has nothing to do with gasoline. gets 242 miles, saves the environment, but in the end there are a lot of people who own tesla and say as oil goes up, tesla goes up. oil goes down. it's kind of like what goes up, must come down thing. tesla never had the earnings to justify the position. apple has have earnings. tesla is a stock where we say wow, i'm filling up at $2.30.

but the people buying teslas weren't making the comparison versus gasoline. it's just hurting the psychology. >> there are some blogs, there is a website inside ep.com. sales are down from october. >> that would be something. the regular car companies are seeing very robust sales. when you deal with the regular car companies, they are saying they thought it was peak autumn and it's not. i dealt with a company that does 2/3 of all transactions. november was great. november may be gravy. maybe instead of buying a tesla i'm going to buy an x car that gets 40 miles per hour. that's not been the case. the 40 miles per hour cars are not priced similar to tesla. rich people, frankly, aren't

feeling wow, i'm strapped, you'll buy a tesla. i don't want to rely on a site i never heard of until today. i was searching that site, too it had a lot about volvos today. >> right. you talk about cold stocks as a school. >> amazon. >> we've thrown amazon, netflix in there. tesla. >> netflix, do we really -- i don't know i want to watch this new movie. >> "marco polo." >> i play it. it's a swimming game. i'm watching "homeland." i dvr "homeland." i want to watch the football championship realtime. i don't know. netflix is a cold stock and shouldn't be this high. >> james murdoch making comments how getting content on to different platforms has been frustrating, i think, is the

word he used. got the content. doesn't mean it's going to find the right pipe. >> they are making a beeline toward everything. except autozone. we can hang our hat. somehow that seems like a small consolation. abercrombie and autozone. they sell auto parts and sears. maybe this is the turn we've been looking for. >> we'll get cramer's mad dash as we count down to the opening bell in a market. take another look at the premarket. more "squawk on the street" in a second. she inspires you. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph,

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seven minutes before the opening of the bell. let's get cramer's mad dash. >> i want to say i'm a janet yellen fan. she slammed the small cap bionot unlike bluebird bio. this could be a miracle drug for sickle cell. you have companies saying things which are very, very exciting. the one place exciting and stocks have been popping is this conference. bluebird is probably the biggest winner of all.

>> i don't see yellen throwing in the towel. >> no. she will double down on her short. she wants to short this for a considerable period. i'm kidding her. i am sure she wished she never said that. >> how about c ofonn's? >> cfo, numbers very bad. huge increase in bad debts. this is a company that sells appliances. it's shocking. this had been a great growth story. i'm looking at this thinking when a cfo resigns and it says cfo is out, that is one of the most discouraging things. we want to know more. we don't. stay away from conn's. >> we are going to get housing earnings out this week. how do you know when this is execution or true demand? >> you've got to look at costco

that will report and they do a lot of house work stuff. this is a story that has a lot of question marks. lowering the down payment. there are good things happening in refinance. conn's is an outlier. >> opening bell a couple minutes away. you can bring back a lot of things

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you're watching cnbc "squawk on the street." we'll get the opening bell in a couple of minutes. coming a day after the dow and s&p had their worst loss since october22nd. haven't had two back-to-back losses for the dow in six or seven weeks. people pointing to the industrial setting a new high. the transports failing to confirm. >> i like that as an indicator. europe is weaker. china down. i was saying yesterday to joe kernan, you've got to get one of these land masses to do better

for 2015 to be a better year. there's too many companies that are international. domestically i still like restaurants and retail. conn's is different. autozone offsets that. i think what jars people is verizon. i know a lot of people in verizon. it's so great. i don't have to worry about verizon, people pay their phone bill, but sprint is disruptive. t-mobile is disruptive. suddenly they are getting to those guys. give the bears their due for a couple of days. let them take the market down. we'll get better levels. >> yes. last week or the week before you said you can have a rising stock market and rising rates at the same time like we did in the '90s. investors have to acclimate to that environment. >> right. when they raise rates, people say we used to sell bank. when we hear from bank of america it will be like citi. they have a similar book. you should be buying the bank stocks when they raise rates but

let's see how they did. i think that will be another negative way on the market today. >> all right. with that we will await the s&p at the top of your screen. the bell down here at the big board. it's rbc this morning celebrating the listings of its distribution liter. at the nasdaq it's windstream celebrating its fifth listing anniversary. >> again they are telco. telco today is in purgatory. >> jim references this slide presentation out of b of a. kayla is in new york with more on that. >> good morning. bank of america's ceo and chairman brian moynihan causing that stock to move when he began his presentation with an overview of bank of america's businesses and where it will get its revenue. he commented in particular about a slide in trading revenue in

the fourth quarter compared to third quarter of this year and fourth quarter of last year. why this is moving the stock so much and why it's so important to the banking sector is because bank of america, amid all the low volatility over the last year and slowdown other banks saw, benning of america's trading held up fairly well. for that company and that particular market to see a slowdown, that is going to cause investors to think maybe that could be endemic for this quarter as yields have retested those lows after the october volatility. other comments he made about the business. he talked about how difficult it is to be a mortgage servicer. that is the toughest business to be in from a cost perspective. at some point they will have to decide whether it's a business worth being in. imagine that being a top priority for investors to ask the company about going forward over the next several quarters. he was asked about the impact of lower oil prices and lower gas prices.

holiday spending was up slightly. they saw spend on gas on bank of america credit and debit cards fall 14% over thanksgiving weekend. any weakness on the corporate side from underwriting and possible credit breakdown of energy company based on low oil prices, that is likely to be offset by higher consumer spend and the overall effect of lower gas prices for consumer. finally, one of the big topics today at the goldman sachs financial services conference is going to be this new regulation out of the federal reserve this afternoon that will impose a higher surcharge on these top eight banks in this country. there was a question of whether banks like bank of america would just have to break up because it becomes to unprofitable to maintain all of that capital on the balance she'd. moynihan said it is still the superior plan to be a big bank. they have to wait and see what the rules will look like. it might make them less

profitable, but that at the end of the day the plan will not be to break up these institutions. more headlines from the gs financial services conference. those are the market-making headlines from moynihan. you can see those reflected in bank of america stock and across the broader financial space. >> they are all going to have that. one of the things that is going to happen, people will say they are not expensive. they can come down off october. we've got a new justice department. we are not going to see prosecutions, clean up the legal. you possibly have normalized and get rates up a bit. these things are selling ten times earnings. you can understand at a certain point people will say they're cheap and 2015 will be better. >> kayla, thank you for that. >> right. at this point -- sure. >> go ahead. >> i was going to say at this point they are barely trading

above book value. getting above book value was a big deal. if you see rates go in the only direction at this point, that will be a good thing for the banks. when, not if, that happens. >> we'll see you in a little bit. kayla tausche on b&a. then at&t down 2.75%. do we have david on that? >> i'm here. we'll be hearing from the cfo of verizon. they were presenting this morning at verizon. we heard from john stevens who is still presenting. the cfo of at&t. he did begin his presentation with a bit of news.

it may be one of the reasons the stock is down this morning. the fourth quarter will be higher than a year ago. you may recall turn levels had been extraordinarily low from the company. overall, 2014 is going to have lower churn than 2013. q-4's churn as it relates to a year ago fourth quarter is going to be higher. went on to say with growth comes cost. promotional activity has a certain cost. something we've seen from verizon. they are a part of that ecosystem whether they want to be or not. they have been drawn into having to offer consumers better deals, if you will, than what was out there previously.

>> my principal bill, telco is big, gasoline bill is big. we'll see these reflected in the economy. in the meantime, i've got companies like at&t and verizon that are regarded as bonds when interest rates are expected to rise next year. i don't want a bond that has earnings coming down. i'll take a regular bond. >> we haven't mentioned the aws-3 auctions. verizon and at&t are spending an enormous amount of money, perhaps more than people anticipated at those auctions to buy the parent spectrum they need to continue to fuel the growth overall in data traffic.

that is another potential cost. >> let them come in. there is no hurry to buy in. it's been a good year. verizon has been good. at&t has been okay. i've got to tell you, here is what i'm seeing. i'm seeing people saying this is a good reason to take profits. i didn't expect to see a price war. yet, obviously when you're at the phone store there is a big price war. >> they managed to stay out of the fray given what is clearly the best network. it's hard to do that when people are constantly revisiting one of the biggest bills they pay each month trying to figure out how to reduce it.

they did move a lot of people to the mobile share value plan. there is hope having aggregated many people there, they are going to start upgrading them in 2015 which could present upside to earnings and margins. >> all right. >> we'll talk to you in a little bit. dow is down 182. this will be the worse performance for the dow since october. mary thompson on the floor. >> only area of strength is the gold market up $25.20. other than that, utilities also fractionally higher a weaker performance early on. no surprise begin the disappointing global data we received overnight and continued concerns about oil prices. let's take a look at what happened in china overnight. that set the tone here in the u.s. or help set the tone. we had a big sell-off in china there. you see the china etf. they are no longer allowing some of these retail investors which

have been behind the big rally in the china stock market borrow cash using cheap bonds as collateral. that caused a sell-off in the china markets overnight and putting pressure on china etf. the other story continues to be oil. this morning we are seeing continued weakness despite a pullback in the dollar. we should note wti has yet to hit its intraday low of yesterday of $62.25. we are watching those levels. oil patch right now, fairly mixed. we are also watching another area. that being high yield debt. the reason being deutsche bank is out with a note today saying they expect 30% default among energy firms with oil at $60 a barrel. $62.67 is what we are seeing right now on wti. when that took out $90 yesterday, that put pressure on the markets. we are also watching airlines today. transports failing to hit a record as the dow did in yesterday's session. there was no confirmation there.

the dow was not at a record yesterday. following yesterday's weak results we are seeing weakness in airlines. spirit airlines filing an ak pointing out it's seeing increased competition at love airport but also increased competition because some of its competitors like southwest are no longer passing along or starting to pass along lower fuel costs to some of their customers through lower fares. that is putting pressure on spirit and some of the other airlines, as well. there was an expectation the lower fuel prices would be held by the airlines helping to boost their profits. keeping watch on the banks as kayla was mentioning earlier, comments from bank of america's ceo brian moynihan about the trading revenue. making comments about how these low interest rates are going to continue to put pressure on net interest margins. about 3:00 or 4:00 we should get comments from the federal reserve about the new capital

surcharges. keep watch on this group. i want to close with telecom as you heard david mention, the news out of at&t and verizon, take a look. this group very weak in today's session. dow up 166 right now. slightly off its lows of the day. back to you. >> thank you. >> xlf should be down more. i'm waiting for citi to say same thing as bank of america and jpmorgan. stocks are cheap but they could take a hit. they'll come back a couple of days from now they'll be fine. >> keep our eye on the ten-year down 221. let's get to the bond pits and rick santelli. >> we could argue about fundamentals. we could argue about the whys. the one thing not debatable is how traders have been right on top of what's going on in interest rates. they clouded, they don't look through political glasses.

they just look at the charts and look at the major stories. the major story today obviously is china and european rate. look at one day and two day of 10s. we are doing a beeline. we talked about this 214 level that closed below the market from october 15th capitulation. keeps drawing the market down because of the spreads between the bunds in europe. they are right back to guess that magic number, about 150 basis points. if you open the chart up to mid october, you could clearly see what i'm talking about. if i took the name off this chart and it was a stock, would you buy this chart? probably not. those are rates going much lower. you would buy the face value, but not the rate. if you look at china, we talked about it. look at a two-day chart. this is important. all markets we paid more attention before we started getting below yesterday's low.

dabbling with 3,000. it had a million new equity accounts signed up based on laws changing, going through hong kong to trade mainland china. yes, maybe that was it. we'll get back down towards mid summer 2006 and you can see what the issue is here. it's about halfway back. this was at 6,000. look at 20-year bund trade. we are sub70 basis points flirting with historic low yields. let's take one step back a minute. it isn't only the chinese stock market traders are talking about. look at the dollar versus the chinese currency. right now the dollar is at the strongest level since this summer around july 24, 25, in that zone. you want to watch it as a whole and continue to remember one of the biggest movers putting rates back down is that relative value trade with european rates and outlook for their economy. back to you. >> thank you very much, rick santelli. we are getting a reprieve on

west texas. brent is down. jackie deangelis at the nymex. >> before the market opened, we did see crude prices higher. weaker dollar today. seeing technical buying. after we hit five-year lows and saw a dramatic sell-off yesterday. you have a steep decline in the bough today. oil prices are down. wti trading $62.78. some traders saying we could potentially go higher from here. if we get over $63.10 we take off to $64. if we close under $63 today, that will be significant to the down side. brent prices now $65.83. watching the overnight low of $65.29. some issues adding pressure here of what we are seeing overseas, rumors hitting the market iraq discounted its oil to asia by $4. saudi arabia discounting last week. opec not cutting supply it's not a surprise to see price discounts. there was talk this morning,

have we hit a bottom? we could see a few volatile weeks ahead. i want to talk about gold prices. last i checked we had a $25 pop on our hands. over 1,200 today. a six-week high for gold. concerns over europe are getting buyers back in. you see people rotating out of equities and crude. gold seems to be a safe haven trade today. metals are seeing net shorts at this point. buyer beware in the metals complex. back to you. >> thank you for that. if you had to pick one thing, fed language, pboc, greece, b of a, what is driving today's actions? >> i think there is an endless belief when oil can't go higher, the economy must be much worse than confirmed by greece and china. we need to break out of the notion if your phone bill goes down and gasoline goes down, that's bad. it just takes some time to work

through. i still think what jackie was saying, i think people are saying if oil is really down this much, the world must be a much worse place and it's not, but give it its due. when we return, holiday sales, global expansion and stock surging this year. stay tuned for a live interview with kevin plank. two weeks later. look, credit karma-- are you talking to websites again? this website says "free credit scores."

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the bull is not as good as aaron rodgers is amazing. watch bank of america. it's coming down a lot. cheap stocks are going to bounce. the oil price does come down and gives you more money. your phone bill which is such a huge percentage of your income. that comes down. that is a pure win for americans. not a win for verizon shareholders. look at verizon if it comes back to $45. >> anything about the calendar right now, taxes? >> it sure seems like it. thank you for mentioning that. it seems people are locking in gains. it's been such a great year. don't you at a certain point rationally say i want to take some off the table.

i want to get in my car, make a few phone calls and go to the store. that's the american way. again, i'm not saying that it's aaron rodgers, don't worry about the game. merck made mistakes, verizon caught up in the price war. oil going down. bank of america, citi, jpmorgan, these aren't good but the markets have been fabulous. even though the pats lose. the eagles can't lose against the cowboys. my whole world changes. >> i know that. >> it's silver linings playbook. it's me and my twin brad cooper. >> de niro in the living room. >> more brad. >> take-two interactive on video games. a stock up 50% so far this year. can it make a dentist appointment when my teeth are ready?

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time for cramer and stop trading. >> before we panic, i am a big believer the consumer 77% of the economy spending is doing well. burlington coat is an outfit.

weather was warmer. the stock 52-week high on very good earnings. autozone misd and azo reports a great quarter. let's be careful not to throw out everything. understand bank presentations aren't that good. understand telco presentations aren't that good. merck can't possibly be as stupid as it looks because -- well -- anyway. quizzical. >> azo and burl. >> and i look at abercrombie. change is going to come. i'll have to readjust that wall of shame. good for all these people. they are taking a break, spending more time reassessing. maybe they go back to school and take some courses, go boating. i'm going to be 60 next year. i'm thinking these guys, i could get 100 foot yacht and go and be cool like abercrombie and bradley cooper.

i'm putting it all together if my dream sequence that is so not going to happen. >> what's coming up on "mad" tonight? >> nrg. david crane has been the most forward of the people involved with renewable energy. he is the link where i expect the champion to be held. and air castle, the aerospace market is so strong. i want to be negative and gloomy, but it's the weather. >> see you tonight. >> thank you. >> "mad money" 6:00 p.m. eastern. when we come back, a power-packed hour. being a keen observer of the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro.

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to help transform their industries. today there's a new way to work. and it's made with ibm. good morning. welcome back to "squawk on the street." i'm carl quintanilla with sara and simon hobbs. we are down at the lowest session since october 15th which

was a doozy for the markets. warnings about margins out of verizon. energy one of the few sectors ironically today in the green. >> after that 5.4% move for chinese stocks let's get over to rick santelli with breaking news. it was up 0.4%. on the sale side we expected 0.4% and was up 0.2%. the revisions are a split decision with inventories moving higher from up 0.3% to up 0.4% in september. on the sale side unchanged. the sale side drives the inventories down. that's the dynamic of the economy we likes best. we'll continue to monitor how

this impacts gdp. we are waiting for a jolt. it's an october number. it will be on the bottom of the screen. back to you, simon hobbs. >> thank you very much. >> global woes are more lows for oil pushing stocks down this morning. stock down about 128. good morning, gentlemen. >> good morning. >> bears have stuff to work with. >> it's a sloppy session. there is no question about it. i guess i take it in stride a little bit with some noise. we are not that far off the highs. the energy complex has created a lot of winners and losers in the last few months. i think the move from $80 oil to where we were six weeks ago to $60 oil, that changes everything. people are like, okay, maybe it will go back to $90, $100.

businesses are okay. at $60? staying at $60, we've got problems out there. and some countries. >> some monarchies, as well. do you have a target next year? >> i think the lower oil story is here to stay. numbers are hard to pinpoint, particularly commodities. i certainly think the dynamic is lower demand in emerging markets, growth coming from em back to dm because of competitive devaluations of the dollar, the euro and yen. em is a high energy intensive using area of the world. they have cheap labor and bad capital. so their capital is inefficient. when their growth slows, they tend to use less energy. >> we've been told time and time again this market is trading on fundamentals. it's strong and priced where it should be because things are so

good. we had a blowout employment report on friday. this market on that argument should have rallied strongly. it's down now about 150, 200 points on the dow, which leads me to believe we are not necessarily trading on true fundamentals at the moment. that employment number should have been jobs and income and growth and profits. it should have been a green flag. in the old days alan greenspan used to say when a congressman would ask him after a 5%, 10% correction what do you think of that? is the economy rolling over? he said the stock market predicted 9 out of the last one recessions. take the stock market as a fairly volatile day-to-day indicator of things. the qe process worked miracles. it will work miracles in japan and europe. as we reposition the dollar as stronger, it's going to create winners and losers. what the s&p is doing now is

trying to figure out who is going to make with it a stronger dollar and hoe is not going to make it with a stronger dollar. >> let's bring in michael cohen. you do have an energy prast forecast. what are you seeing in terms of price action? any sign we are hitting bottoms on wti and brent crude? >> at this point i think we continue to test the new lows as a result of the opec decision a couple of weeks ago. saudi arabia has made the case that they are not willing to step in and support the price level with cuts to production. we'll see supply and demand side adjust. we are going to continue to see very strong production. >> forgive me we have breaking news on citigroup.

let's join kayla tausche. >> the ceo is taking the stage. simultaneously the company announcing it will take a charge in the fourth quarter in the current quarter regarding legal investigations curr s currentlyg as well as greater costs associated with restructuring with the company abroad. in total those charges will be $3.5 billion that will affect the company's bottom line in this current quarter. here is exactly what the breakdown is. $2.7 billion will go towards legal and related matters for ongoing investigations. the company says all of these investigations are previously disclosed matters and they concern foreign exchange, libor, anti-money laundering. the company in early november reached a settlement with the comptroller of the currency as

well as regulators in the uk for about $1 billion over foreign exchange manipulation. there is still an investigation ongoing at. justice department. it is expected that this new sum could go towards that in addition to some of these other issues. $800 million of this charge will go toward further restructuring or repositioning that i'm told is largely associated with some of the consumer businesses that citigroup is exiting in about 11 countries across the world. that has been previously announced. the company is expecting it will be more costly to exit those businesses than perhaps it expected. in a statement, ceo michael corbat says we made progress streamlining other company and this will further enhance our ability to focus on the areas with greatest potential for returns. we believe these legal charges should cover a significant

portion of our outstanding legal matters based on current information. there you have it. this is going to impact citigroup stock today. no investor wants to see a charge being taken. at this point it is better to see this up front going into the end of the quarter rather than an adjustment like we saw for citigroup and bank of america after the quarter has already ended. nonetheless, this will impact citi's stock $3.5 billion additional charges the company will take this quarter. >> we are seeing it. the stock is down a little more than 1.5 pfrmts. >> it's bigger than zero. because it hadn't been telegraphed how costly some of these ongoing legal matters would be, there hadn't been any estimates out there publically. when citigroup adjusted its

earnings after the third quarter, it added about $600 million in additional legal reserves after the fak fact bec it had government transparency issues. now it appears they are getting more clarity what these new issues will end up costing as well as costs in the middle of this restructuring abroad. it is greater than expected because it is a new charge holistically. >> thank you for that, kayla tausche. david, the financials were just starting to show strength. they were one of the best performers. these kits keep coming. >> i think the fallout from everything in '08 is going to make it hard for financials to still perform. every time they make a problem, rates on the rise should be a

somewhat positive thing for these guys. you would expect it to be a good time for financials in the recovery period. the government keeps coming back and taking that pound of flesh. >> hang on. if you want to buy a decent business, good franchise, this might well be an opportunity. these one-off charges will pass. these are still potentially huge cash-generating machines further down the line. >> i think the big ones are going to be the most dangerous. the fed is meeting this week and talking about systemic risk charges for larger institutions. we'll find out interesting information. the big guys, i'm always worried about. the smaller guys, always a great environment. there will be a lot of interesting stories. >> thank you, guys. covered a lot of ground in a few moments. >> thank you. now to china.

shanghai having its worst day in five years. falling more than 5%. our chief international correspondent michelle caruso cabrera has more on that. >> new regulations came out that surprised everyone. an intraday swing of 8%. you can see the huge move when you look at the two-day chart of the shanghai composite. here is what happened. to oversimplify think of it like an increase in margin requirements. here are the details. there was a regulator that came out and said if you are going to use corporate bonds for collateral in a number of markets, you are now limited to only aaa rated corporate bonds or the bonds of companies that are rated aaa. according to reuters, this eliminates perhaps 500 million yuan being used as collateral. we understand the market to be

about a trillion. that is a huge percentage. translation to u.s. dollar is is $81 billion. it's still a relatively small bond market on the yuan. the yuan fell sharply today. remember, that is a controlled market. what we are showing at the bottom is the chart of the dollar. it strengthened dramatically. you can see 6.1855 yuan to the dollar. back to you. coming up, an exclusive interview with the ceo of starz and what he thinks about the future of television. only 15 days till christmas. we'll talk holiday shopping with take-two ceo. anything worth pursuing requires precision and attention to detail. it takes knowledge, hard work and a plan. at baird, we approach your wealth

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check out what's happening with conn's. the stock is plummeting 35% after posting 8 cents a share, reversing a 60 cent a share combine from a year ago. it withdraw its 2015 profit forecast and accepted the resignation of its cfo.

david einhorn's dream-like capital was the company's biggest shareholder with 9.8% stake. greenlight declining comment whether it still held the stake or adjusted for it. shares down by 38%. a rough day for shareholders and maybe david einhorn. >> kayla reporting a few moments ago the bank will take the $3.5 billion charge in the fourth quarter related to investigations and restructuring. 2.6% move on a name that large will get your attention. david faber is live at midtown at the ubs media conference where industry leaders are discussing big trends. he joins us this morning with one of those leaders, the ceo of starz in an exclusive. >> we start off with the ceo of starz who presented hire a bit ago good.

to see you again. it has been a little while. i think it was the nyse. begin all the news, i have to ask is starz for sale? >> we have never put the company up for sale. we've never run an auction. one of the key rationales for spinning starz out from liberty was to make it more flexible in making strategic alliances with companies to hold our business. those conversations go on all the time. >> were they misinterpreted? it's not as though we hear these things out of the blue. i heard them, as well. were they misinterpreted or looking for a strategic opportunity that actually includes getting bought something you are doing? >> i said from the beginning selling your company is not a strategy. at the same time we have an obligation people want to talk to us about buying the company, that is a very different statement than we are selling the company.

we are very secure in the strategy we have of transforming from an all-movie based service to movie and originals. it's a strategy that's working. we are adding subscribers. our distributors like it. got a lot of programs people are talking about. we have an international opportunity to grow a business outside the u.s. in ways we haven't had before. we are going to talk to anybody and consider anything that is going to be good for our business. >> right. i shouldn't sit here and expect to see a headline or find out on my own that you guys are getting sold? >> i obviously wouldn't tell you that on this call. one day literally i woke up and read all of these companies are interested in buying starz. two days later i see your report and i read no one in the world is interested in buying starz. >> that was cbs. others said no one in the world. >> i didn't know any of those

things. i didn't know all these companies were interested and i didn't know nobody in the world was interested and i run the company. this stuff gets spun. that's all i can say. >> starz is not big. it's not small but maybe it doesn't have the wherewithal to compete against netflix and hbo in this increasingly competitive market for original programming. for example, "marco polo." $90 million. you had it at one point then it went to netflix. that's why people think maybe they have to figure something else. can you compete begin these capex needs? >> absolutely. look, it's not a binary world. most of the people that have premium have netflix. it's to the an either/or. most people have more than one premium. the opportunity for us is the opportunity for our distributors which is to get these high value

products, premium channels to potential customers, new customers in innovative packaging. it's not a question whether they are going to have high-speed connection. the biggest impediment to growing premium has been the fact you've got to buy through the entire video stack to get to premium. less people are going to be able to do that financially and less people are going to be willing to do that because they are the consumers coming in technologically savvy. we have the content, the technology they want. >> explain what this means. you've spoken about it before. you make the point there's 50 million households that have broadbrand that don't have premium which is an opportunity. i'm not understanding how you

would satisfy that demand. what is the product look like? >> so we can't satisfy that demand. our distributors have to satisfy that demand. obviously, they have a lot of things on their mind. certainly, you would think that creating a growth business with emerging households would be that. selling video on top of broadband. >> doesn't that cannibalize the video business? >> well, it could if you looked at it that way or what it's doing is building long-term sustainability for your video business. it's not binary. especially for the cable guys

and telco guys, high speed becomes their main business. the way to cement high speed is, yes, they could have netflix, but to monetize that connection for whatever they are charging is to sell video. starz is one of the highest margin prices for them. why not try to get it to as many people as you can? >> how far away are we from a world like that you are describing? >> soon as they make the decision, it can happen. this is a question you should be asking brian roberts, tom rutledge. >> when you ask the question, what is the answer? >> it varies from it's a good idea, we have been thinking about it to i haven't thought about that. they have to think about it. when hbo talks about it, les talks about it, starz talks

about it, it's out there. >> he did put something together. it hasn't rolled out. >> so that's the other thing that will happen probably. some of these operators are going to look to go, quote/unquote over the top within their own backyard or over the top in somebody else's backyard. there are new distributors looking to come in. sony's got a digital distribution platform that they are talking to a lot of people about. i think for premium channels, the more ways these companies are trying to get products to consumers is good for us. we are the products people want. as they innovate in packaging and distribution, we are going to have more opportunity to get more subscribers. >> i'm told we are out of time it. was just getting started. >> sorry. >> me, too. i hope you join us soon. >> me, too. >> chris albrecht ceo of starz.

the u.s. supreme court ruling in favor of amazon in unanimous decision 9-0 that the company does not have to pay contracted workers of integrity staffing solutions, a facility in nevada, that is asking for compensation for the time it takes them to go in and out of security every day. measures they have to undergo to make sure there's no merchandise leaving those facilities. amazon does not have to pay workers for that time according to the u.s. supreme court. coming up, a live underview with kevin plank on the new fitness initiative online. check where we are with the airlines getting slammed today. do remember these stocks have done extremely well. spirit, delta up over 60% this year. hawaiian and southwest have more than doubled. -800-345-2550 [ male announcer ] your love for trading never stops,

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fitch up 6%. retailer announcing the ceo michael jeffries is retiring, effective immediately. arthur martinez will be in charge of day-to-day operations. h&r block down 6% missing with q-2 results as expenses rose. wholesale inventories up a better than expected 0.4 in october. results are in for the exclusive cnbc all-america economic survey. it's extraordinary results. 806 americans polled throughout

the nation of all types, all reasons, all income groups. what we see is a market increase and interest in the stock market. is this a good time for bad time to invest? they've been relatively positive throughout the bull run and ticked up in this quarter, the december quarter. finally here are all adults average americans finally ticking up. their net optimism is plus 11. you can see it's the biggest we had over the course of this survey. you have to go back to 2007 before the financial crisis to find an optimism number like this. the dow, you can see a couple of things. first thing is that the financial elite and their sense of whether or not it's a good time in the u.s. is tied to the year over year change that month when we asked the survey. other thing you see here, here are these big gains in the stock

market. still relatively positive. you have this up tick, as well. maybe staying power here. who is interested in the stock market? who changed? this is the quarter-to-quarter change in the net optimism. you can see it's gone down more average american. only some college plus 36%. even when you don't have a lot of investments, your optimism or sense of investment is up to 27%. no investments, 20%. even when income is below $30,000, these people are net negative, however what you saw is a big increase in optimism. also among women. women have been extremely negative on stocks. below that zero line the entire time where men ticked up above on that optimism over a period. finally women ticking up to be solidly for the first time since 2007 above the zero line. the question is do the ladies

have it right? i sure hope so. >> you've seen the study. you know women are better investors than men. >> we do know that. there is a lot of behavioral economic studies about that. when it comes to the giving of advice sometimes a woman financial advisor can be better than a men. >> disciplined. steve liesman, thank you. straight ahead, the ceo of take-two interactive. joins us for an exclusive interview.

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are creating more possibilities for more people every day. comcast nbcuniversal. bringing media and technology together for you. the dow is down 200 points. oil bouncing back slightly from five-year lose. let's get to jackie deangelis on the oil trade. >> good morning. traders are telling me buckle up. this is going to be a very volatile trade. you mentioned losses that we are seeing in equities. we were mirroring that in crude but bounced back not long ago. we fell so far, so fast. yet wti $63.15. hit that technical level. some traders think we could get to $64 today.

a close under $63 would be paramount. we are up about 13 cents right now. brent crude $66.12. a lot of 7 cents. most traders are bearish. we have an oversupply on our hands. that's highlighted by the fact saudi arabia cut its price. you have not seen output cuts here. that is pushing prices lower. saudi says we are going to $60. wti could see $50s. last but not least, a $40 bounce on gold today because of the sell-off in equities and concerns over what we are seeing in europe. back to you. >> thank you. 15 days to go till christmas. heat is on for the video gaming industry. grand theft auto, playstation four and xbox are expected to be top sellers. joining us is the ceo of take

two interinactive. good morning. >> good morning. >> straus zelnick. >> black friday which people had concerns about seemed to be dispop portional a dispop -- disproportionally good for our industry. >> do you discount? >> there is no reason to discount when things are selling this well. >> what do you do to turn a $60 sale to a $90 sale? pieces of content have become available 30 days after, 60 days out. with borderland it's ten pieces of content over 18 months. where is that taking you? >> it's transforming the industry. what we used to have in our business was big, chunky releases. then some time elapsed, 12 months, 24 months, perhaps more.

it was our job to keep bringing back those titles. that is a good business. if we can keep the customer an gauged, that is a better business. that is what we call recurrent customer spending. that is growing rapidly. that's more than half our digital distribution revenue. >> how much of what you're seeing in terms of holiday sale is digital sales? >> for a front line products, the industry represents 10% to 30% of front line sales. the lion's share is still physical retail. we don't see that changing any time soon. it doesn't matter to us. however the customer engages works for us. >> it matters to a gamestop, to the retailers. >> definitely matters to gamestop. >> gamestop is down heavily today. recently the president of

gamestop on the conference call bemoaned the fact so many free games were begin away with the hardware. also said look, you have to understand that people who are downloading digitally are willing to pay $35 a share for the product that would sell at $60. he said all of you should be concerned that is happening in the industry. obviously he is biased because he's bricks and mortar. >> i beg the question. we offer our prices at the same price digitally and physically. we don't offer a difference in pricing. physical retail remains an important partner. consumers are buying the same title. the distribution method is irrelevant. price point should be the same. >> what words are you using to describe 2015? once we get through holidays what does it look like to you? >> we are uniquely driven by our release schedule.

looks like we'll enter the year with 25 million new consoles in the marketplace. that is a great universe. however, we still need to make and distribute great products. our most exciting upcoming release has evolved. we tend to wait to talk about success until it occurred. we are excited we did win best of show at e-3 and comic-con. we feel great about it. >> marketing expenses up or down next year? >> roughly the same for us. we need to address the consumer. >> what about zelnick media, the private equity operation? you are a veteran of the music industry, the film studios. what are you going to do next year? what do you think will be the opportunity in 2015? >> zelnick media bought a canadian kids animation company with the entrepreneurs who founded it called nine story. we are excited about the content

business. television is booming right now. it's all anyone talks about. we think kids animation is an exciting area. we remain interested in the explosion of data over mobile network. we are exposed to content, technology and telecom. we think the world is going mobile and that is a very interesting place to invest. >> good to see you. >> thanks for having me. when we come back, the ceo of under armour kevin plank will join us live. >> before the break, one more check on the markets. dow down 195. whoa! if you have dandruff sign up for shampoodelivery.com get out of here!! 50% off laser hair removal. you've been matched. linda s. is only 3.2 miles away. no no no. request accepted. match confirmed.

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>> twice as bad as what is happening with health care. telecom the weakest sector in the s&p 500. verizon, the biggest laggard after warning promotional offers will hit profits. cutting price target from $50 to a prior $54. century link and windstream moving lower. telecom as a sector, among the smallest in the s&p 500. with all the clearly on edge, we turn to the ceo of under armour kevin plank. welcome to "squawk on the street" from midtown manhattan. we'll talk about your partnership with nbc universal which is why you're on today. give us a sense of what you're seeing on the ground. >> hi, sara.

carl, simon, it's great to be on again. we live in a bit of a bubble at under armour. there's been a lot of ups and downs in the last five years and we've been able to ride them out. we had a great year. obviously, our company has grown. we reported our fourth consecutive quarter 30% plus growth. i don't know if we are the perfect company to give you the true test of what's happening out there. the consumer is challenged. some of our partners felt that in foot traffic. i think we'll have a positive holiday season. people expected black friday to be the tell-tale sign. the discounts and sales are extending too long. you are not condensing that in a 24-hour people the day following thanksgiving. >> are you yourself putting out

promotions longer period of time? >> no. we don't play them black friday. we had one item we gave to consumers. the reaction to that was overwhelmingly positive. i think it's difficult going to retail, particularly being a full-priced brand is competing with 50% off and 30%, 40%, 50% off before you get to black friday. the landscape in general is changing at a rate. i don't know if i call it irresponsible, but i'm glad we don't have to play in that. we are proud to be a full priced brand to deliver that margin and what we are seeing in our own stores around the u.s. and world. >> what happens with the rising dollar? a lot of you guys, i don't know where you produce, but a lot is produced in asia and china. if the dollar is rising, that is massively bringing down the cost

of manufacturing. do you pass that on to the consumer? >> we can talk about what that would mean. costs are going up. direct costs of products themselves. i think a raise in wage cost. we have the luxury being able to dictate price because our product stands for it. we protect our consumer and don't gouge them. we are responsible when we react with price increases. typically if we can, we like to absorb as much as we can. and be opportunistic where we deliver ultimately a better product. >> let's talk about this new deal with radius, a new digital fitness network launched by nbc universal. what are you hoping to do here? who are you trying to reach in terms of audience?

>> for us, this began more than a year ago. several years ago we introduced armour 39 our first biometric device. that hardware was incredibly difficult. more than a year ago we bought map my fitness that. was a user community of 20 million people that has grown to 30 million people. leveraging that community base, we found a great partner with the nbc sports network and find that programming of being able to embody someone that is sitting there watching television, the ability to participate in tv. and have a subscription model that allows you to sign up with five virtual trainers that will help you get fit and get in shape. we could all use inspiration. i'm proud of the fact a piece of apparel and shoes can tep you. it's good to have a personal trainer yell at you, too. >> your stock is up 54% in 2014.

you call it the under armour bubble. what pressure does that to next year? you've got to feel increased pressure here? >> i've been careful about the word bubble. we lived in our own world. we celebrated in november our ninth year as a public company. in those nine years we averaged 30% top line and 30% bottom line. under armour is a unique brand. we are a $10 billion brand currently only doing $3 billion in revenue. we are incredibly optimistic about what's to come. again, we laid a few signals how we see 2015 shaping up. one thing is consistent. being only one of four companies in s&p 500 to report 18 consecutive growth quarters, we feel 2015 we have a good chance continuing that streak. >> what will drive it? international next year? >> we had a lot of good growth drivers. when we look back on 2014, this

is the year of the woman for under armour. our campaign featuring misty copeland, the soloist at the american ballet theater and the follow up with giselle bundchen, you'll see this balance moving from about the female athletic to the athletic female. foot wear is coming out. it's a great running shoe. give it a shot. >> all right. nice plug. thanks, ken. kevin plank, ceo of under armour. catch radius from 6:00 a.m. to 9:00 a.m. on the nbc sports network. dow is down 171. art cashin will tell us what we should be watching as we get closer to that european close in about 45 minutes.

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director of floor operations a the ubs. we tested had low you said and then came back. >> we made a slightly lower low around 10:30 but no carry on selling. often when you make a lower low you get a mini capitulation selling coming in. we had none of that. they have come back. this is not any significant rally. the thing of real note here is in the first 60 minutes of trading the run rate was heavy. it would project over a billion shares at the end of the day. that indicates some of this selling is coming from offshore that it is not all domestically gro grown. maybe be a carry on. if you can't liquidate what you want when you want. >> it's difficult to point an exact reason. but does t look as it's just profit taking in a market that was overbought? or are there new fundamental

concerns out here worrying traders. >> a couple of things. we've spoken over the last several weeks about the positive seasonals. this week is the least strong of all the seasonal weeks in december. so you are vulnerable there. you were a bit over bought and then came in with a couple things when they change the collateral in china overnight. that was a big shock. they had been running and moving along rapidly. so there was a key vervesal there. he was down the equivalent of 900 points in the dow in shanghai. and greece called for new election. that was the second shoe to drop and they were down 11% which would be, you know, well over a thousand points in the dow. so you have had a couple of shock this is morning. and i think it's just spread over. europe is down, almost every equity market is being touched by it. >> and vienna is surging. >> vienna is surging. a lot of people got caught off

base there. >> and the journal saying a considerable period might go away. >> very interesting but the yield on the ten year went down below 2.2. we're back to where we were before the payroll data caout. i think it's fear of what's going around the rest of the world. >> and what about fear of deflation? do you think what is that oil is telling us or not? >> oil and deflation are a mixed bag. i would say the fear of deflation is in europe is still very strong and in japan also. not quite so much here but i think what the concern is here of of connotation. if people in europe or in japan need to raise money and can't do it there, it is going to come here. and you will recall, unfortunately, going back to 2008 you can get carry on

selloffs. one asset spills into a complete lit different asset. >> are you sure it's not just simple profit taking, that if you are in the airlines that have doubles, when is a good time to get out? let's net knwait it. could be that. a lot of the stocks that are down today are stocks that have done extraordinarily well. >> there is no reason why among other things you wouldn't want to lock in a profit if you see the market coming in. but i don't know that everybody raises a glass and said, you know, it's probably a good time to take a profit. >> it's two pack to back down days for the dow. art, thank you. >> let's find out what's coupling up on "squawk alley." >> quite a show. tech is under pressure as a lot of other things. and we'll look at some of the names there and we've got a tech titan on hand. the ceo of emphasis.

former top brass over at sap. to talk about what's happening in emerging marks and the david faber with david zaslav in the wake of the eaten alive controversy. will one davidite the other alive? we're not making any promise bus tune in on "squawk alley." kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not? dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab

kayla tausche in new york today. with us jon fortt. dow is down. a bit of a selloff led by telecoms and some technology. energy one of the few sectors in the green. european close in about half an hour. we'll see if that alleviates. maybe folks over there using our markets to rasz cash. >> could be. a few interesting names. gopro down near -- of course it's low low was that $31 close its first day of trading. it is still up more than double from that level. but 65, is a pretty low level for them. we'll see. >> and tesla down