it's friday and there are 13 days until christmas. welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. thank you for joining us. here are your headlines from around the world. >> european markets open sharply lower as oil prices touch a fresh five-year low. in germany, commerce bank weighs on the dax amid a slew of reports saying the lender will pay over $1 billion following a u.s. banking issue. prime minister shinzo abe

looks set for a landslide victory in this weekend's election. uber waits to hear if one of its -- will be babbed as global expansion blocks hit a number of roadblocks. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> and we have had the iea oil market come out in the last couple of minutes. some headlines from that, they said the sell-off in oil gained pace after the opec meeting on november 27th after they decided to keep its output target unchanged. of course, we knew that already. they say the outlook for global oil demand pore 2014 has been cut by 50,000 barrels a day.

also saying the strong dollar and the listing of subsidies have so far limited price effects on demand. while in the last month or so, we've been focusing on the opec meeting citing weak demand and the strong u.s. dollars as reasons for this oil price, overall, they say surge in nonopec supplies to its highest growth ever and a contraction to demand growth there is the reason for the weakness in the oil price. >> initially when oil prices started to fall, they said lower gas prices mean lower oil prices and not actually seeing a significant decline in oil prices. investors starting to see this could potentially have an impact on global growth, in fact, even taking a look at the consumer. how does it benefit the consumer? the iea report, one headline from that report, oil price drops are sometimes described as a tax cut and a boom for the economy. but this time around, their

stimulus effect may be modest. >> indeed. and so explain that point more, a quote coming from the iea report, they say demand or substitution for long periods of high prices may not come off in a sell-off. however, that view is not share by blackrock's ceo larry fink. speaking in new york, he said the drop in oil is good news for the world economy. >> we're witnessing a true event that all the statistics were there. everything i just told you, statistically, everybody knew four months ago. and, you know, what triggered this is a bigger question. but the most important thing is, andrew, this is a massive task for the world. this is really good stuff for the world. >> joining us now is marc ostwald, strategist at i am investor services. thank you very much for joining us. let's talk about the oil price,

what it means for the wider economy. larry finck pointing to the fact that it is a pick up for the consum consumer. is he right? >> it depend really what we make of it. i tend to agree with him. it definitely is a boost for businesses, it's a boost for consumers. it's a great opportunity particularly for all the heavy oil importers in the emerging world. specifically thinking about countries like indonesia, turkey. we should stand to benefit. it allows them to get rid of some of the subsidies. on the other hand, we've got a lot of energy debt in the energy sector and a lot of debt inside the energy sector. there is a risk that basically at current levels, that is going

to become very difficult to service. so that is the negative aspect .of it. >> the energy sector is now down 15% year-to-date. they are focused, of course, on the price of oil which continues to decline. how much will that impact earnings going forward? about 8% of the s&p 500 is relying on energy. >> yes. it's going to have a negative impact. i think what we would need to keep a close eye on here is the faster we drive this down, the more there are going to be layoffes. we've seen bp announcing some, not only in the oil sector, but in the energy sector. the more we start shelving production, start putting futures production plans on hold, the more hikely we are going to get into a situation in six to nine months' time where we've processed all the tough that can be put to one side.

and so you'll probably see a rebound. so this oil price move may prove to be short lived, depending on how the energy sector reacts. >> a lot of the historical comparisons point to the fact that gdp might pick up, but if you look at those studies, quite often when the oil prices go, it was accompanied by interest rate cuts. of course, that depends on what the cause of the retail oil prices is. but this time around, oil rates can't go lower. do you think that is what people think? >> it's the effect, the fact that if we drive innation down,

even with those countries with low flation, so to speak, that's forget much like places around the globe except for perk in south america. that's a huge issue, we're still going to be in a very, very low interest rate environment. therefore, the cost of financing is going to be advantageous and they do pose a risk in the short-term. >> okay. thank you very much for that. we'll be back with marc shortly to talk about the central bank action. >> we just had a flash on oil coming dprt china finance minister. he said they're going to raise the consumption tax on oil products. it's an interesting development, of course, the central government using the weakness in

the oil price to push through something that might have been impossible to increase revenue. november retail sales rose 1 1% on a years basis. industrial output growth has slowed by 7.2%, which is less than expected 37 records suggest the government has accepted a low gdp tashth for next year. >> in italy, the final cpi number coming in at negative 2%. slower inflation, if you will, in italy month over month or year over year. again, not the best set of numbers coming out of italy over

the past week. industrial output out of italy yesterday showing that it dropped slightly. of course, unemployment, that's the major issue that italy is dealing with right now. we are looking at the euro trade higher, actually at session highs against the u.s. dollar at 1.2442. >> let's have a look at european markets. yesterday, we had movement, highly correlated to the downside. lots of red. the stoxx 600 down 1.5%. quite significant declines today in europe. let's look at the individual markets, as you can see. it's broad based, the sell-off. the ftse 100 down 1.4%. germany, 1.5%, cac 401.5% and ftse mib off 1.45%. this is correlating with risk assets in the short-term.

we had a bounce off the back of weaker than expected takeoff, making people think we will get more ecb action in january. perhaps that is unwinding a little bit. let's look at bonds. bonds highlight the risk sentiment we've had globally over the last week. yield compression, the story of the last the couple of weeks. in the u.s., we're at 1.23% despite big auctions over the last couple of trading sessions. germany, 0.064% in germany, the only ten-year bond yield is lower is ya pan. the uk is interesting being bought up in this bond buying we're seeing in europe, even though it was benefit from any ecb buying if we get it in 2015. just over 2% for the ten-year in italy. let's look at forex. the u.s. dollar has bounced back a little bit yesterday. monday to wednesday, three straight sessions for the

decline in the u.s. dollar is the main reason for that. yesterday it bounced back again. today, a little bit of a weakness. the u.s. dollar against the yen, 118.36. aussie/dollar, 0.8291. >> the oil price continuing its decline, $59.21. brent $63.15. what does this mean for energy economies? russia, it is bad. the ruble declining 1.5%. it's had a massive decline year-to-date. it is down 72%, the ruble. astonishing move. declining ruble means that the

russian index has gone up once again, which has been a story not the way through the year like it had an for the ruble, but has been for the last six weeks or so. let's check in on what the weak oil price and other issues means for trade in asia. >> good morning and good around, two major markets. the nikkei 225 settling higher, but down 3.1% for the week. we saw some weakness in the yen. that has helped the exporters. the market has one high on the weekend. it looks as though prime minister abe will win which should give him some emphasis

for the reform. on the whole, it's going to still promote the case for further stimulus, for more policy support by beijing, perhaps not this month, but sometime in the first quarter in the shape of a triple r cut or maybe one or two additional further rate cuts now. the one of the outperformers today, the pse, the benchmark, up by mon than 2%. that's how we stand here in asia. back to you now in london. >> sri, thank you so much. coming up on "worldwide exchange," cyber security has been exposed this year with the leak of new celebrities and hack attac attacks. we discuss what to look identity for the in 2015. and if you're a fan, the.

and initial day, we'll take a look at how people are celebrating the day.

commerzbank is set to pay $5 million to settle a u.s. issue. there are two separate probes involving both sanctions and money laundering. telefonica is off 1.4% on news the chairman has traveled to london to meet with bt to discuss a deal that could involve taking stock in the reuter's firm. bt is off to the news, as well, down 1.6%. shares on finmeccania is off, basically flat so far today.

with more on the story, let's join claudia who is in milan. >> that's right, wilfred. it wasn't positive territory just a few moments ago. it was the best performer initialry, but, of course, the market is down here. we have a few stocks going into positive territory. it benefited from the idea that there would be a stronger income forcing them from this assignment that they have received for assembly and maintenance. the important thing is this means for employment for italy. that is good news as well as more technological development.

that is all positive news, so the returns of both economic and occupation. the important thing is the duration. so this reiterates the positive relationship between this specific company and the united states. this is good news. moving on, french food group danone has named a new cfo. the company confirmed its 2014 target saying it's committed to all its business units. for more on the story, let's join stephane. >> we have to read between the lines, but it looks like danone is not looking now to sell its medical nutritional unit. they said all the positions were

contributed to encyst iing this looking at the future of the unit, it's worth different forms, 35 billion euros. last year, it accounted for only 60% of the total revenue, which is part of the business. that's one of the reasons why danone found it difficult to continue the business. danone announced a couple of changes in its division because it's really the main part of the business, more than 55% of the revenue last year. last but not least, the financial guidance has been confirmed for this year. and it's also targeting a decline of its operating margin of less than 20 basis points.

that's in line with what the company announced previously. that was only a few weeks ago. back to you. >> now we switch focus to the swiss franc, taking a leg up against the euro after the central bank held steady on rates. the s&b kept its cap on the currency saying it was committed to stopping the franc from strengthening against the euro. carolin roth spoke to the chairman at the governing board at the meeting. >> you maintain the key industry rate and we sweet to this inflaegz. if you look at our inflation forecast, it is lower and we make it very clear that we do not exclude any other measure if it's necessary. >> do you think that you're less hesitant to introduce negative deposit rates because the central bank has done it, the ecb has done it. they have implemented that and you feel that it would work?

>> we made it very clear that in case it's necessary, we do not include any measures. >> what exactly would that look like? would it be on-site deposits or libor? >> how difficult would qe by the ecb make your job of maintaining the 1.20 cap? >> a very difficult environment, the situation in europe, but what is very important for us is also that the eurozone improves over time and that growth and prosperity come back to the eurozone. >> i wonder to what extent they're looking through the oil price. is this temporary or what kind of an impact it has on the deflation outlook.

>> oil usually has an impact for one year. obviously, extremely important that inflation expectation remains in positive territory. and our inflation forecast is very, very low. we mentioned the deflation risk increased. norway, the central bank decided to cut rates to its lowest level against the euro since mid 2009. the bench cut its benchmark rate to 1 is.25%, the lowest level innive foo years. louisa spoke with the governor of the central bank of norway and asked why he decided to cut rates. >> the background is clear that there is a slowdown, especially looking forward in the growth over the norwegian economy.

we have a big engine at the continental shelf which may be over the top saying that investments are going to go down next year. and that is strengthened and becoming more severe by the fact that oil priceses have dropped by say, $40 or $45 this summer. marc, were you surprised by the move from norway yesterday given that it is western europe's biggest oil decline and producer. perhaps they had no choice than to cut. >> i wouldn't great agree with that. the oil price fall has a huge impact in terms of the oil companies and their future production, as we were talking

about yirl. at the same time, they exclude energy by 2.5%. in the new book of central banks, that is something you never, ever do. secondly, norway has a fund and it could basically provide a major buffer for the norwegian economy in times of oil price volatility. and it seems to me that this is -- their current concerns are something that the government should be addressing and its impact addressing. it's trying to get a boost to the oil front by the nonoil

economy in norway. so i think what's interesting is it's always been the case waiting for the central bank, perhaps a slightly larger one, to make a policy error. i would say this is one of the first policy errors that's been made. we'll see whether i'm right or not. >> and political unalternativety in greece has pushed the ten year up to 9%. so a big move in the bond market when looking at greece. the fear is that the intie austerity party, what that will do to the market. >> yes. actually, one has to wonder

whether mr. sonaris is gambit himself, the current prime minister, is whether ee looking at greece's debt burden. he's looking at all the things they imposed on the population. the domestic economy has been completely decimated. the tight of the matter is, there is no way to implement more austerity in greece and guarantee that a radical party will come in and basically exit the situation. so i think it's basically in the direction in berlin to say you know our division is unsustainable. you have the ability to start thinking of something constructive. none of the solutions in greece are going to be -- you know,

they're ail bad ones, but there may be some better ones than idea of actually forcing greece out through the exit. >> it's a story we will be watching. still to come on the show, it's been a tough year for the japanese economy. what does 2015 have in store for its stock market? the nikkei will hit over 21,000 by the end of next year. get more on his calls after the break. ñ'

european stocks sharply lower as crude cashes a fresh five-year low with wti now trading below $60. china raises a consumption tax for the second time this month. in germany, the lender will pay over $11 billion to settle a u.s. sanctions probe. and potential wins for abe-nomics. prime minister shinzo abe looks set for a landslide victory in this weekend's election. uber waits to hear if one of its services will be banned in france capping off global expansion plans hitting a number of road blocks.

>> let's have a look also at what european markets are doing in general. as you can see, quite a broad based sell-off in european markets today. down 1.5% for the stoxx 600 overall. and for the individual markets, as you can see, the ftse 100 down 1.3%. germany also down 1.3%. what are the reasons? it's generally risk off stocks by another decline in the oil price. >> it is. it's so interesting, wilfred.

now that the price of oil has substantially moved to the downside, a lot of traders have been saying the stock market is reacting negatively to the drop of price in oil. sgen, how low can the price of oil go? that continues to be the question. japan's nikkei praises for this weekend's key snap election. prime minister abe looks set for a landslide victory. what does this mean for abe nomics? >> it's being billed as a referendum on prime minister shinzo abe. voters will head to the polls in a snap election that will likely endorse the current government's economic policies.

japan's economy shrunk nearly 2% in the third quarter. earlier this month, moody's downgraded the country's creditworthiness. he as promised many dooem deeper spending cuts. that seems more like a fantasy than reality. so what about the opposition? abe's snap elections surprised everyone, including his opponents. the country's socialist parties have suffered internal divisions that will likely see them suffer badly at the polls. abe's liberal democratic party currently holds 294 seats out of 475. and according to the latest polls, they could increase that to a two-thirds majority.

phil hahn, cnbc. joining us live from tokyo, phil, thanks for joining us. let's kick off and talk about the election this weekend. opinion polls predict a strong government victory. i wonder how big a victory we need to see for abe to be able to enforce some of the constitutional economic reforms he wants to enforce. is there disappointment in the result this weekend given that expectations are stronger? >> look, i think you've pinned it on the nail here. they're going to gain around 8 or 10 seats from a super strong majority here. it's abe's election to lose. but the key point for investors is that very likely abe's grip

on economic power is going to be strengthens and that means it's going to stay consistent for at least two years. >> look, number one, on the policy side, i need consistency. and i think however critical one wants to be about abe-nomics, the key things is they're not doing anything to oppose profit generation. they are very much pro business. when a government is pro business, that's good news for investors. so the reason to be bullish on japan is because of policy consistency and number two more importantly, operations in japan having enormous earnings power because they're deeply structured and we are at the beginning of a record productivity boost here in

japan. another reason to be bullish, at least when the ask the average investor, is abe-nomics, hoping to revive the prime minister's performance as well as her birth rate? >> it's very interesting because, you know, in my personal opinion, abe-nomics is addressing it by empowering the women. you know, just a couple of weeks ago, they announced that companies will be getting tax breaks to set up child care facilities in the company. that's going to be good news, number one, to empower women to increase the participation rates while at the same time allowing for the birth rate to be picking up. >> you talked about profitability for companies is one of the reasons why you're going on the equity markets.

at the moment, the focus purely is on deflation. but all this printing and money and this weak currency at some point, will it not flip around or hurt companies when it does that? >> look, you're absolutely right. whether it's in america, japan, the point is the flip from inflation to deflation is going to begin to cut into corporate margins. but right now, japan is in the sweet spot. so the fall in the oil price is absolutely good news for corporate profit margins. so as far as the next 12 to 15 months are concerned, corporate earnings in japan growing by 20% to 25%. that is a perfectly reasonable forecast. >> 25% jump in earnings.

how do you get exposure to the japanese stock markets? >> it's very difficult. i'm not allowed to publicly talk about specific economies. but we like the financials, we like the banks, the japanese real estate companies. this is about a slip from deflation to inflation, the biggest ben fresharies are going to be here in domestic japan. you know what a-b-e stands for, a-b-e, asset bubble economy. thank you very much for joining us. have a lovely weekend. now, stick, japan, manufacturers will need to speed up the air bag issues left by

takata. >> honda and other automakers have expanded takata recalls worldwide. takata says it is planning to increase production to replace the potentially defective ones. but with the number of cars subject to recalls being large and continuing to grow, automakers are worried about takata's capacity to produce enough replacements on its own. another production company plans to scale up production at its factories. but even if they were able to

meet the requirements, it has hurt its relationship with automakers. >> hidamie, thank you very much for that. out of greece, reuters reporting the january to november central government was 3.5 billion euros. that's coming from the debt to gdp finance. and let's focus in on washington because the u.s. house of representatives narrowly averted a gocht shutdown, passing $1.1 trillion spending bill at the final hour last night. it passed with a vote of 219-206. this after a group of democrats tried to block the bill due to changes to the dodd-frank financial reform, saying they would provide an early christmas gift for wall street. nancy pelosi saying they were

blackmailed into this agreement. there is a start-up that we are going to be watching today. that is uber. there could be more roadblocks ahead for uber as the car service app finds out its fate in france. we love live to paris with the latest.

china's finance ministry says it will raise the consumption tax for several products marking the second high in two weeks as crude prices continue to drop. the changes apply to gasoline and i've air oigz. petrobas, results have been delayed for over a month depending a multibillion dollar corruption probe. including two former petrobras workers. joining us with more on the story is nancy. >> there's a lot of anticipation going into these results. and the big focus will be an update on the company's financing position.

there is a lot of concern that the ongoing corruption probe has hurt the ability to tap those markets. >> in addition to earnings, will we get clarity around the money laundering? >> it's not a coincidence that these charges were filed last night. so really widespread. it is the top agenda for the president. she's trying to get the ball rolling on these infrastructure frontal. but considering that these top identities, this could mean

delays for those other companies. >> what is the reaction. as you know the time, she's meant to start the second term on january 1st, the cabinet. she, of course, was chairman of the board until she became president. so a lot of people had alleged she knew about these ongoing kickbacks. she's denied it. but the allegation says that up to 3% of revenues from these kickbacks could have benefited from the government. so she's going to have to come out and give people some assurance that she was involved involved. another big story in ukraine, separatists have completed a pullback from the front lines following a truce with the government. authorities in kiev have agreed to withdraw their weapons.

earlier, we asked whether investors should be worried about a perceived rift between the president and the prime minister? >> there is no split. we have one term coming from the ps's bill party of cass nets and inkers. >> this is strong presenting. there's similar strong themes from the prime minister. there is a joint consensus on what has to be done for the country. i haven't seen any misashrinement. >> they kind of give us the

feedback. >> what is the message to investors here that are in the market yesterday selling your bonds because their concerns there is a likelihood of default? >> if we look at the economy, there are avl of indicators and at the same time, if you look at the potential of the country and the right theme today of the government, within the next six months, there will be indicators on the economy. 2015 will be difficult. 2016 will be up. a lot of investors are making sure that we are on the list of opportunities for investments. so keep us on the list. we're coming pack. now some flashes from reuters talking about bank says the central bank is likely intervening on forex today.

as i can see, the dollar has moved 11.8% uprise. >> and the question is, how much more can the central bank do to provide support or a floor to the russian rouble, which is down about 40% year-to-date. the big concern is, though, if you raise rates so much, how much will that curb growth in russia. both of those having a big impact on negative growth in russia. >> a similarly hit currency because the oil price in norway did the opposite. >> and it's a great bank to look and see what's happening with oil. >> different economies have

different inflation outlooks. that is why they reacted like that. talking about the price of oil, markets have pushed into deep monthly dechieps amid the oil price. moody's says the six sovereign nations can with stand the oil price pressure, but you can take a leg move. the car looking at uber, whether it will continue parade with the economy. you yourself aren't a user, are you, because you ride a motorbike. >> i do. it's quite difficult to find a taxi in paris and it's not unusual to wait up to one hour on weekends to get a taxi. which mines in the french capital there is a lot of room

for competition. we are expecting today from competition court, you said yesterday france was not planning to impose a ban on uber, but that it needs the right level of complication within the country. today competition is expected to decide whether or not it will to block a part of the services, precisely one service which is some sort of car sharing. and regulators claims that it's a competition for the taxi service. the french economic minister gave its party. if the remember necessarily of this week, to unlock the french economy. he would like to open to competition some sectors which

are currently heavily regulated. so in country on one side calls for deregulation and on the other hand, kind of blocking that from operating in france. >> what has the response been from the french on this prospect of uber being banned? i know when i was in paris, i used uber quite often because it was a convenient way to. help us understand how people are reacting on the ground. >> we said that uber might pay for all the other applications because it's the most common one and that is the reason why all the opposition focuses a lot on uber. that being said, when you're a taxi driver in europe, you need

to buy a license. if you are an ub er license, you base your permit on 150,000 euros a year. we have a kind of regulation prop. so it's a compromise which would not cause a fortune so the states and it would be for the taxi drivers and would not ban uber from france. now, a stock specific story, that would be gopro. the stock falling on an increase in short telling. on the 23rd, company insiders can sell the stock. citi saying it's more cautious on increased competition. the stock is down some 12% over the past three months. now, it is international

ugly sweater day, and there's bun pharma does not mind about animal central getting in gound. and after a few days of call owes social media sites to get him back home for the holidays, a shape named gabe was reunited with his owner. with our own team photo here on "worldwide exchange," you can see our matching jumper. wilfred had to copy me, as always. >> and i did with a sweater of incrediblyall ever small sizes. perhaps, perhaps we can do something before christmas and come on with santa claus and -- >> i think you would make a great santa. you're tall and -- >> wow, that is a great ho, ho,

ho. >> there is more to come with that, but for now, we are asking you to send in your own terrible christmas sweater pictures. sultan has tweeted in and said it doesn't look ugly. i don't know what that's in reference to. >> there are unleashed letters, but i think he's probably trying to get in touch with us. our partial handles are on the screen, as well. seema, most important, 13 days left until christmas. that, of course, means we're getting close to the big day to enjoy ourselves. >> and we've seenlty of turbulence in these markets. the vix back above its historical average indicating volatility is back in this game.

>> yesterday's trade and two days ago in the u.s. markets, equity markets did bounce back. it shows there is support for u.s. equities as we get closer. >> a lot of that had to do with better than expected domestic data. in fact, u.s. futures to the downside. we're looking at the dow down more than 100% in premarket trade. our next guest says do not stop believing in the santa claus rally. find out why after the break. [ male announcer ] meet jill. she thought she'd feel better after seeing her doctor. and she might have if not for kari, the identity thief who stole jill's social security number to open credit cards, destroying jill's credit and her dream of retirement.

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happy friday, everyone. i'm seema mody. welcome to "worldwide exchange." >> i'm wilfred frost. these are your headlines. u.s. markets are set to snap a streak weighing on markets. >> in germany, the dax being weighed down. uber is having a rough week in france after global expansion plans hit a number of

roadblocks. and come democrat nancy pelosi cries blackmail over the $1.11 trillion bipartisan deal. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. and what a troll tile week it has been. we're looking at greek stocks trading at the lowest level since 1987. the shanghai index was in focus for global investors seeing a big selloff for the week. i don't think investors were anticipating this type of volatility for the month of december. >> there are reasons it spread across all risk assets. yesterday we saw that tradeoff

between more positive fundamental data and that weak energy sector let, of course, by weak oil prices. >> that is a benefit for the consumer. as you pointed out, the energy sector now the worst performing sector year-to-date by about 15%. right knob, the dow indicating a sharp move to the down side, down about 12 point. and the s&p 500 indicating a move lower by around 3 points. yesterday's stocks did give up earlier gains to close near the lows of the day. what does this mean for european markets? we got news, evidence of the tltro pick up yesterday coming in weaker than expected. that, of course, was the focus on the ecb. that is what the market is expecting. but today, economic data in toef. inflation falling in the month of november. we are looking at the ftse mib,

the italian markets, which did close higher yesterday. trade lower today, down triple digits, a 255 point move to the downside. i want to focus in on the uk, as well, because construction output in the uk falling to its weakest level since may 2013. so putting into question the resilience of the uk housing market. trade down around 1.5%. some significant moves to the downside. volatility, that has come in again and is one of the reasons pore being positive. the iv trading index above he or sheal average. that is when you start seeing investors getting more scared or perhaps apprehensive. volatility definitely back in

the game. >> we were just saying, red across the board in european markets, apart from greece which has bounced back 11% in territory. in general, the story of the last week, very, very negative. unsurprising it bounced back a little bit after declines. in the u.s., we're at 2.13%, despite big bond sales over the last couple of days. demand very, very strong. in germany, 0.6 expectations. the results yesterday disappointed, therefore, meaning that the ecb mightny to have outright bond purchases. that means the uk bond yields are compressing, 1.85%. even though they won't be

beating with that. plus 0.6% year on year. that's broken in the last couple of minutes. the euro, up about 0.2%. the u.s. dollars more broadly, touched a five-year high on monday. bounced back yesterday and today it's softening again. sterling is pretty much flat, as well, 1.5708. let's look at commodities. oil prices continue to weaken. crude do i 1.15% today. brent is at 63.26. it is down 0.6% today. and on the topic of oil, larry fink said that the drop in oil produces is good news for the world economy.

>> we're witnessing a true event. is that statistically, everybody knew this four months ago. what triggered this is a bigger question. but the most important thing is, andrew, this is a massive tax cut for the world. this is really good stuff for the world. >> and we're joined now by mark lecloud. martin, good to see you this morning. thanks for joining us. let's kick off and talk about the oil prices. whether it's beneficial or not for consumers. it seems yesterday that maybe it's feeding through to the u.s. consumer. it's having a slower effect if it is having an effect at all. >> identities certainly having an effect. driving in here this morning, for me to fill up my gasoline

tank, it's a saving of $18, $20 from where we were in the spring. >> and i supposed it depends on what the cause of the weak oil price is. it seems like it is supply led. bur there's one thing to go against that, and that is if it is demand led, it would mean we are accompanying the weak oil price with interest rate cuts, which has been the issue in the past. are we looking too closely at the oil decline? >> i think one of the things that i haven't really read much at all, if at all, is that happens this could be seen in the construct of a different

issue that could be taking hold currently, which is this whole idea of innovation driven deflation. back five years ago before we had this revolution in drilling technology which resulted in this expo neptal growth in oil and natural gas, in the united states, something like 5.4 million barrels of oil a day is being produced today versus where we were five years ago. in addition to that, we've seen huge declines in the price of certain energy. perhaps this is part of that acceleration in innovation which is driving down prices. if it is, certainly investors out there should be thinking that perhaps this is not a temporary thing. and the thing we know about what happened when the price of oil went down and stayed down for a long time was that you don't want to own anything that has

leveraged or is not a low cost producer. what you do want to own would be the big bad boys, like the totals and royal dutchs and exxons of the world. because they have the balance sheets to survive this down draft. in addition to that, they'll be able to grow their businesses in the future by buying chief asset owes wall street so to speak. and furthermore, if it's not like 1986 or 1998, then the price of oil will come back up and these stocks pay great dividends and they're cheap and they'll turn out to be reasonable investments. but if this was part of this innovation driven deflation, this could by a compass for other industries going forward. some of the traders i speak to say it's like catching a falling knife, you stay away, wait for them to find a bottom. at this point, when are we going

to see a bottom? >> anyone's guess. so i think with the scenario i just gave is not particularly bullish. if you own the highly levered independent producers and those kinds of companies, if prices continue to stay low and so forth, them those companies are going to go bankrupt and it's going the be very painful. so you only want to own the companies within the space of the big balance sheets. if you're in the space, transition your assets from the speculative stocks to the blue chips. >> and let's talk about volatility. it has been a focus for traders this week with the vix trading above 20 for the first time in a while. that is above its historical average. why do you think we're seeing this return of volatility in the month of december, which is

typically strong for the market? >> well, this has been a strong month. if you really, since the third week in october, which i was on this show and there was a bottom and we were up something like 10%, 11% in the last six, seven weeks, the return to volatility is perhaps we're just going back into a more normal environment. certainly this month we will see traders and money managers buy dips even on the bad news that we've seen. the reason for that is this has been an enormously frustrating year for money managers. unless you were very, very focused on a small sector of the market, you've underperformed this year. i think a lot of what we're seeing in the last few days and the last few weeks has to do with that. >> frustrating time for

investors. take a look at the year-to-date performance of the s&p 500. it's up about 10%. a good day on how markets have been able to end this year, despite geopolitical tepgs and the price of oil. >> mart yip, we're going to leave you with a consumer produces frout? consumer sentiment data is out at 9:55 a.m. eastern. economists expect a read of 90. coming up on cnbc, brian sullivan speaks sclus ofly to bill gross from the headquarters in the first television interview since he left pimco. catch that interview on monday at 8:00 cet. one thing traders don't have to worry about, at least for now, is dysfunction in washington. the u.s. house of

representatives passed a $1.1 trillion federal spending bill at the final hour. the bill passed with a vote of 219-206. however, a group of democrats launched a staunch defense against changts to the dodd-frank financial reform saying they would provide an early krit christmas gift for wall street. nancy pelosi voiced disappointment with the bill saying democrats were blackmailed into a bipartisan deal. still to come on the show, there may be more in store with euchre.

congress avoids the u.s. shutdown with hours on the clock passing a $1.1 trillion spending bill. and uber awaits a verdict on whether it will get a green light in france. >> uber is awaiting a french b verdict in a french court on whether it can continue operating one of its services in the country. the french economy minister said uber should not be banned, but its drivers need to have the

right qualifications to operate. let's talk more about uber with kathleen. thank you for joining us in studio. >> thank you. >> it's been a tough couple of weeks for uber. suspended service in india because of that alleged rape. thailand also halting the service. now the streef has valued uber at $40? >> yes. i think it's been a year or more. i think that what has brought it here is the recent funding and the fact that we have some problems by drivers not being vetted in new delhi. but it's not something new. i do not think it's going to put

off investors. as a matter of fact, just a few hours ago, there were rumors buy due is thinking about putting in another $100 million. i think that does indicate that people believe in the potential of what uber and its platform will do. >> we have heard from reuters is looking at that. the ceo said the company comes with significant growing pains. can they achieve that in the time ahead of what we expect to be an ipo next year? >> well, they have to. they will have to if they're going to try and go for a public listing. but what is interesting, being valued at $100 billion, one would argue they don't need to

go public. that is what is interesting. generally speaking, when you have a company that is worth quite this much money, it would have been in the public eye. you would have had regulators. because it's been able to raise this money and stay private, it seems to have gotten ahead of itself in terms of keeping up with regulatory commission and policies. >> do you think this will be a trend in the coming market? they're getting the funding they need to expand. >> the leping cloud is in financial services. they will still go public. that is easier for them to get to liquidities. >> it was seen as negative, a pretty truss things to be doing. >> investors and regulators.

it's a cautionary tail in that uber seems like it's getting ahead of itself. but what happened, even in the united states, with the financial services and regulators is probably what's going on happen with uber, as well. >> recently, the european parliament pushing for the break up of google. there is also now the government here in the uk looking at kwlemting these tax. >> i think it will give them pause. in spain, they impose their own google tax. google has now stopped leaking to spanish resources. you have a bit of a tug of war

as people try to figure out how this landscape is going to play out. what is happening in the parliament visa spee google is political, i really do. i think it's political in trying to strengthen it saying you have to work with us if you want to be in our market. >> definitely a strong market. thank you so much. and it is incident every national ugly sweater day. we'll get you a look at how important around the world are celebrating. that's coming up.

>> the do i jones industrial currently down in trade. the s&p 500 down about 3 and the nasdaq showing a move to the down side by about 43 points. the european stocks trading lower. a lot of the moves have been predicated on the decline in oil prices, trading below $60 a barrel. the question is, how low will

oil go? some traders saying $50 is the next support price on oil. >> this is a broad based sell-off in europe. what is the reason for today's decline? also yesterday we had a bounce back in some stocks based on the weaker than expected tltro pick up which some people say will be making them stock easier next year. now, the owner of gucci, france is putting in place a new ceo to run its luxury brand.

the kraeb director is also leaving her position. shares in gucci is trading down the best part of 2% today. >> and by the way, it's cotour. how did you see it? >> i don't know. i didn't get it right, obviously. >> that's okay. i'm here to help you. >> omaha's animal control found this guy wandering around the streets wearing a christmas sweat every other this holiday. gauge was reunited in the closet. here we are. >> it's a cute photo.

very cute photo. >> i'm a little more festive than you. >> it fits you better. >> we will see. if you want to join the conversation here on "worldwide exchange," get in touch with us, worldwide@cnbc.com or via twitter, @cnbcwex. >> why do you call it a jumper here in the uk? >> because that's -- >> so you would say i'm cold, 50i78 going to get my jumper? yes. >> that's news to me. okay. plus, the internet of things could face a major attack in 2016. ras that's coming up next.

and we're seeing a sell-off in equity markets. i'm seema mody. welcome to "worldwide exchange." >> and i'm wilfred frost. the u.s. market set to snap a seven-week winning streak as crude touches a fresh five-year low weighing on german markets. in germany, there are reports saying the lender will pay $1 million to settle a u.s. sanctions probe. uber, after cutting a tough

week. >> u.s. laemakers narrowly av t averted a government shutdown. and talk about a big week for global markets, oil prices continue to fall. yesterday, we did see stocks move to the lows of the day. excitement over increased retail sales in november faded as oil full to a fresh five-year low. europe futures trading to the downside. the s&p 500 down just about 7

points and the nasdaq down just about 22 points in premarket trade. this following what has been a negative session in europe. let's take a look at the european markets. right now, the ftse 100 down 100 points. we got uk construction falling to its weakest level since may 2013. putting into question the resilience of the uk housing market. in germany, lee looking at losses of 2.3% been and italy in focus. so not a great week for italy. higher employment falling in the country in italy. just this week, though, it has gained 730%. so volatility is definitelien

issue for traders. now, cnbc did speak to the blackrock's larry finck about the driver behind the current moves. >> fair pricing, what are we trading, about an 18 pe and i like 16 better than 18. but if you believe remains lower longer, funl the bnk of japan, bank of china will still be ves aggressive in stim use husband. >> an 18 pe is not too bad funl rates are going to remain low for longer.

>> five-year record drops, clearly confidence in the russian markets, in the russian government 5e7s ability to pay off its debts. >> there is the ruble, down 1.86% today. lets talk about ate more about the markets. i have to say, the thing that surprises me is that since the middle of october, we've seen more europe and ya pan i don't really understand why it's happening in the u.s. rates are going to go up next year. >> given that we're seeing multi year lows and we're looking at european bonds, especially the german bund trading at 1.8%. those investors blag for yield

marpt no choice but to give us what europe is offering at that point. >> zaf outright buying on both risk on as he ises, so i think that is one of gran's point. >> now trading above 9% due to political uncertainty. greece stocks, by the way, trading at a 27-year low. some big moves there. >> indeed. anyway, shall we move on? could you be concerned about a

seen every attack? joining us more with what to look out for in 2015 is rag spp sanks so much for joining us. >> thank you. >> you think this could be step us up in cyber attacks. >> i think we've begun to say over the last 12 months, we've seen a real escalation in attacks and were seeing atms, we're seeing point of cell devices being compromised. >> and let's talk specifically about the internet of things. you're saying the profitability and severity in that area is going to picks up specifically next year? >> yes.

we had 120 records being stolen. we saw this was in the region of $30 apiece. that is a real return on investment. >> do you think this could slow down people's toring data on the yie yield. >> you happen, one of the things we've talked about is this concept is key for the talking and a key discussion point. what we're seeing is technology companies begin to address the concerns that consumers have. >> should there by regulatory measures put in place to ensure

that flawed software isn't released? >> the reality is we see vel nerbilities come out that we haven't known about for years. the recent campaign has been in existence for about eight years and nobody really knew about that. so it is difficult to resinate with something unknown. >> and you're saying more groups will use cyber attack next year. >> i can't talk about that specific case, but in south korea we saw an example of service attacks, and they were

stealing information related to a military campaign. >> as we become more digital and wearables, does that increase of getling attacks? you know, i don't want to be the guy that comes if and predicts doom and gloom all the time. this year, we've seen a great deal of public/private partnerships in terms of takedowns of criminal acts, criminal infrastructures, for example, the takedowns. we all need to ask ourselves, if i'm going the buy this device, is there protection there? >> we're going to leave it there. that is very important, especially given your research. we're going to leave it there. raj, thank you for joining us. u.s. lawmakers have narrowly averted a sending effort.

tracie potts pass more like from washington. >> the only reason h voided a shutdown is they stretched their budget and gave themselves two more days to get this done. the house passed it narrowly. there was a lot of opposition from democrats would does not like a couple of things in this bill. but it did pass. and now it goes to the senate. we're fearing the senate could vote as early as today which they need to do because ta new deadline for the government to run out of money is on the weekend now, it's saturday at midnight. if there is a vote today, that's fine. if not, procedurally, it could get votes in yesterday wsh did

chief of staff of the would you say. they have now adjourned, they're done until next year. so it's up to the senate and we'll be looking for that vote today. >> tracie, thank you very much. and now we're off for a short brock. we'll be back here on "worldwide exchange" in a couple of minutes.

u.s. futures right thou, down. the dow jones industrial indicating a move lower by around 140 points. a lot of that having to do with the price of oil. some of our guests saying over the last hour, we've been following the decline in oil prices. yesterday's move was particularly notable. crude oil fell below $60 a barrel. it marks the lowest since july of 2009. traders pointing to the oversupply fears in response. energy stocks sold off the. you're all down more than 10% so far this week. so some big moves in the energy space. energy stocks did touch another

multi year low in yesterday's trade. there's just 13 days left until christmas. sea world is landing in hot water with animal rights activists. >> little fred, good morning to you. the move comes as the theme park operator faces controversy over its treatment of killer whales. the controversy resolves around itsdz oshg ka whales, fervel traeners. shares of sea world have fallen nearly 45 points this year alone.

the company does not outline how many positions would be impacted, but it added that cuts are intended to stream line workflow. the chairman will serve as chief executive until the company finds a permanent successor. it said it would engage in executive search. >> landon, thank you very much. if you're a fan of guam molly, you might want to stock out now. avocados may be hard to come by in the next couple of months. some u.s. farmers are banning the fruit because it is too rch. yes. there we go, it doesn't really feel like a fruit, but there you

go. >> but hey, who doesn't like guac. be careful what you wish for when it comes to more rain. northern california has been hit by flooding leading to power outages across much of the west coast. students in sonoma county enjoy the day off school and decided to kayak through the flood waters of a super market car park. the storm has been described as nearly the worst in a decade. it's something we will continue to watch. now, t international ugly swepter day. there is win farm animal not feeling sheepish about getting his own. >> it's already got fur, and then on top of that, you put a sweater on this animal?

>> looks like he might be enjoying it. the shape, named gauge, was reyou united this in. here we are in our jumpers. he want to hear from you. isn't us your phiette pictures. there we go. >> i like that one. do get in touch with us. worldwide@cnbc.com or @cnbcwex via twitter. now, as we head to break, let's remind you of the headlines. u.s. stocks set to end the week lower as crude tumbles into fresh five-year lows. congress avoids a shutdown with just hours on the clock. sxuber awaits a verdict on whether it will get the green light in france.

welcome back. the stoxx 600 is do you know off. the biggest decliner down 1.5%. germany weak, down 1.2%. what's driving that was risk off sentiment. start once again by the weak oil prices. take a look at the oil price, which is below 64 wti. down 1.5% itself. brent is down 1.15% at $63. now, u.s. treasury secretary jack lew says the low oil produces with positive for the u.s. economy.

>> i think if you look at the u.s. economy overall, the overwhelming effect of lower energy prices is going to be to boost the economy, not to cause greater risk in it. that doesn't mean there won't be winners and losers, but i think it's an overall economic matter, you know, lower energy prices are held across every sector of the economy and the higher prices is more concentrated. oil prices may be good for the global economy, but it's not good for the energy sector, which is now down about 15% year-to-date. energy stocks weighing on the broader industry. dow jones industrial down 130 points in premarket trade. the s&p 500 down about 3 points and the nasdaq seeing a loss of around 40 points in premarket trade. on that note, let's get to a rundown of what to watch this trading day. the producer price index is out at 8:30 eastern. activities down slightly from

october. consumer data is out at 9:55 a.m. eastern. as we were telling you, u.s. futures down significantly in premarket trade. let's bring in todd horwitz, author and founder of averagejoeoptions.com. todd, a lot of volatility in markets this week. how much of that is predicated on the price drop in oil? >> good morning. the price of oil going lower is not bullish for the economy. it's telling us how bad the economy really is. you know, we're starting to see a lot of deflationary scenarios here starting with the price of oil. this drop is creating the selling and the pressure in the market because what it's telling us is that the consumer doesn't have enough equity or money to go out and shop and buy and drive their cars and use up the supply. now, we have an oversupply because of what's going on. but at the end, this is a very bearish time for the market, which is why i still believe that this market is due for a much deeper correction than where we're looking. now, i don't think we're going to go straight down today.

we might even rally from where we are here. but the overall picture is we hear that every penny is a billion in the u.s. economy. well, we've been dropping since june. we have not seen any real improvement in the overall economy. what we see is a continued drop in pressure. the only news about the united states stock market is that the cleaner shirt and the dirty laundry. >> surely if there is weakness coming into the equity markets because of weak demand for oil and what that is telling us about the global economy, that's a buying opportunity for u.s. equities, surely. >> you know, i can that could have been the case and has been the case. but the only thing creating buying opportunities for the market so far has been the federal reserve with the cheap money policy. if you look at the big picture, 85% to 90% of the american citizens are not participating in the overall stock market ral rally. this rally has been designed strictly for the upper class. the middle class has been in a recession and has never come up.

we can talk all we want about where we've been. but the middle class has been in a recession for the last ten years. and they're making less money today than they were making in 2000. so they're just -- the money that they are saving on the gas, they're using to buy food versus putting it into equity markets and putting into the discreti discretionary items. >> given u.s. stocks have been outperforming in emerging markets, do you think in 2015 investors will question the premise of international diversification? >> i think that in 2015, i think we're going to see a lot more heat across the entire globe. i think that emerging markets are in trouble. i think the world economy is in trouble. and until somebody like janet yellen or the federal reserve says, you know what? this is not working the way we thought i was going to work, we need to raise interest rates so that we can bring back in the middle class to work these markets and it is our borrowing and lending and growing the economy, i think that the entire world economy is in big trouble

and i look for a lot of damage in 2015 unless they decide it's time to finally raise rates and recirculate the economy. >> todd, very quickly, u.s. equities, will we get a santa rally from here? >> i think you can probably see a rally here. look, it's the time of year where we're a little more bullish. you could see a potential rally unless there's a problem with the spending bill. we're down here this morning because there's a little bit of trouble with this spending bill. that is where the real trouble is coming from today. overall, we get a santa rally. i don't think we get crushed before the end of the year. 2015, i think we get a major correction. >> todd thank you very much for joining us. todd horwitz, founder of averagejoeoptions.com. coming up on cnbc, our own brian sullivan speaks exclusively to bill gross in his first live tv interview since leaving pimco. >> that is all we've got time for today on "worldwide exchange." have a lovely weekend. i'm wilfred frost.

>> i'm seema mody. "squawk box" is next. cute little guy, huh? this guy could take down your entire company. stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm.

good morning. welcome to "squawk box." the oil pressure is spilling over into the global equity markets. a storm hitting the pacific northwest. the worst storm in half a decade, leaving floods, power outages and property damage. and the apologies are flying after the sony e-mail scandal gets even uglier. it's friday, december 12th, 2014. and "squawk box" begins right now.

good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. our top story on this friday morning, another tumble in crude oil. earlier today, oil prices falling below $59. check this out right now. $59.1 1 sitting right on the cusp after falling below $60 for the first time yesterday since 2009. we are now at a five-year low. that's the lowest level in half a decade. right now, the price of crude, again, $59.10. down another 1.4% this morning. also, the international energy agency cutting global oil demand forecast for 2015 by 230,000 barrels a day. and warning that weak demand and oversupply raised the risk of social instability. we'll be talking more about that

drop in crude in just a moment. in the meantime, check out the u.s. equity market right now. futures are under pressure by a lot. dow futures down by 143 points below fair value. >> and we will be remiss if we didn't talk about yesterday. we were up well above 200. it was like 30-1 in the morning. then it was 20-1 is. it ended up 60 point and present had fallen positive, 3/1. but it was unable to hold on to those gains. >> right now, the major markets in the dow and s&p 500 are all on track for their first week of lowses in eight weeks. we'll see what happens through the day. but at this point, given what's happening, it's going to be hard for them not to -- >> and the loss. something. but there was that notion that it always goes up between december 8th and december 31st. i think the market listens with the people saying that.

>>. >> yesterday, though, we did have an analyst who called it. he said back in september that he thought oil would fall to $60 a barrel. he's a guy who faced china and the concerning part is china. if it's the supply picture, everything is good and if it's the demand picture, that's concerning.

>> five years isn't what it used to be. as you get older -- >> we're getting older, joe. >> five years -- that was the last time i cut my toenails. >> oh, gross! >> i hear something happened five years ago and it seemed like it happened last week, seriously. >> looking at those things today, they're just really -- aren't they really sort of -- >> check out your grooming and let me take a look at the major averages in europe this morning. they have been continuing to slide. the ftse down by 1.5%. same story with the cac in france. but check this out. a slight bounceback after last

week. >> your lighting yesterday was exceptional. thank you. >> you looked like a young happening dude, like ryan fricking gosling. >> and now we're together and it's not as exciting. >> i can't believe that they can stick a rig up and do lighting and wherever the heck you were and it's perfect. we come here and we look like -- i don't know. >> united technologies issuing a profit in revenue warning for 2015. this is going on and it expects profits to fall in its original equipment business. the company is not going to be selling its military commercial helicopter business. check out sea world now. the theme park operator announcing it will cut some jobs. the park has oeblg seen attendance rise twice in the last quarter.

that's india's first day of trading at 2343 is now rising further in premarket trading. that is one to watch, as well. and then there is sony and the hack attack. executives at sony pictures are now in apology mode in a big way as more embarrassing e-mails are leaked from hackers. cochair amy pascel apologizing about sensitive comments made in an e-mail about president obama and all that information. >> just wise -- they were some -- >> tough e-mails. >> some people say it needs to go from racist to rationally incentive. >> al sharpton. >> well, okay, consider the source there. but i mean, they're troubling comments, but then again, they were between two people that had no idea eventual it's it's going to -- and does it rise to the

level of -- i don't know if these two people are racist. but because of those comments in e-mail, do you know now that they are died in the wool races? >> no. but what i do know is corporate america has a big, big problems in terms of security and cyber security and what can come from this. because my guess is just about any company would have e-mails that would be things that would be very embarrassing to have leaked out along these lines. >> one other note, all those names, you remember we learned all the fake names of all the actors? we asked jessica alba about this yesterday. her name was cash money. that's what they called her. i called her, i said can i call you cash money? and she had she didn't even remember to actually use that name like ten years ago. so a lot of those things are made up the. >> that's funny that they used it ten years ago and it's so true now. so you need a couple more words for money in there. >> her husband, by the way,

apparently named cash. is named cash. so she was using cash and then they just added money. >> i didn't watch part of your interview. did you just start with -- i mean, how did you start your interview? were you drn. >> i tried to hold it together. we just had a great conversation. i will tell you, she impressed the whole room. >> did you put on glasses so you couldn't -- >> she's an entrepreneur, a businesswoman. she is -- >> you know, she's an entrepreneur and a businesswoman. >> by the way, her greatest line was i have to say, how did you go from being an actress to being an entrepreneur? she said i was hardly an actress. >> owes, so cute. >> wonderful. >> we need more of that. >> it was really good. >> we need angelina to cop to that, you know? and just one additional point before i read this and that is

utx, united technologies, clear the deck, baby. new guy, right? new guy. >> right. >> is this why we -- >> they do an analyst meeting and they say all the things about next year that they want to get out there because he's just -- wouldn't you -- they always seem to do that when a new guy comes in, clear the deck. stock goes down a couple of -- you know, that way, started, it was 110, not 114 or whatever. but not surprising to -- even if i didn't know for sure what was going so happen in 2015, i would take a conservative first analyst. the house approved a 1.1 trillion dollar spending plan to keep the government going through september of 2015. so bill got 219 yes votes, just one more than needed to pass the senate. still needs to work through a number of procedural rules before it can vote. it passed a two-day extension of current funding and avoided a slowdown. this was a real soap opera to watch yesterday, which really pitted -- it was, you know, things get weirder and weirder.

it was almost the twilight zone. nancy pelosi and elizabeth warren were on the other side. i've got to tell you, it's times like this that i do like the president. even after they loss, he throws them under the bes again, in their view. not only did -- it didn't help a lot of their causes. but then he says this is the kind of compromise we need. >> it gives you some hope that maybe there would be some bipartisanship and maybe things would get done. >> i read it and i was like, wow, this is good. this is the kind of compromise that we were hoping for and that we need.

elizabeth warren has steam coming out of her ears, it's totally -- oh, my god, yes, it's wonderful. what a day. i woke up happy today. because it's friday and because of that. you see, i don't know where you come down on this. >> i don't know where i come down -- >> are you worried about the 5% derivative? >> a little bit. >> are you, really? >> i'm glad they compromised. i'm much happier than this bill passed than we actually had -- >> they had price in government at this point. everybody has to realize you're not going to get everything you want and come to the table. >> and the white house may sit down. jack sat down yesterday on it. i was surprised they were not more forceful about it, even though i knew they would always think they needed to compromise. crude prices, you know what? keep going down. crude prices sinking below $60 a barrel for the first time in five years. this morning, joining us now is kevin kerr. we're going through the alphabet

now looking for any oil unless we can find that didn't have a rock solid bottom at 98, 85, 80, 75, 70, 65, 60, or 55. have you been wrong the entire way down, kevin? did we mess up or -- >> no. and i think we have further to go, joe. we are seeing selling across the board. we have a glut of oil. we're probably in for some lower prices from here. how low it's going to go? i don't know. we're at critical pricing levels and critical technical levels. below 60, it's an unclear game where we stop. >> when we were at 80, it was below 80 should be a bottom. so now -- so you're telling me it's not going below 50? >> the potential there. the other is sustained, joe. that's the thing. >> right. but it is weird that now you're able to just -- you know, with a lot of conviction, say there's a

glut. and at 90 and 85, all of the people that we had on that were saying this is only going to be temporary and the market doesn't -- where it is right now, it doesn't understand the fundamentals and the dynamics of supply and demand, no one in the business of following oil knew that there was a glut. why is that? they never really thought there could be a glut again, i don't think so. >> everybody was under the believe na opec could cut production. of course, they did not. that was a fire across the bow. we're down 44% on oil prices. now we're at the breaking point at the 50, 59 $level and brent is falling like a rock, as well. a lot of these projects are dependent on oil price being above 60, above $70 to be profitable, probably break even at about 60 or 50. now we're at that critical point where a lot of this oil protection is going to get shut in.

a lot of these companies are going to get out of business, laying off workers, shutting in production in the shale field and all the things supporting the future of energy policy in this country as independence. a lot of these companies are faced with huge debt. they're going to be shutting down and a lot of the production we picked up here in the last few years is going to dissipate. >> it's just amazing that it is self-fulfilling, too. they start out at 85 and it's like, wow, we've got to -- you know, to support our budget here in our country, we need 85 been we have to sell a little bit more. so they don't cut production. then all of a sudden, they get down to -- let's say it does get to 50. they have to sell two barrels of oil to make up for the one barrel that they were selling last year to provide all the stuff, whatever they're doing with -- you know, with those revenues. so it's almost self-fulfilling. now they have to sell twice as many which means they can't cut production. that feeds on the glut itself. it's nuts. >> a lot of these companies keep

pumping and pumping and pumping. it's a self-fulfilling prophesy. affluent of these companies are beak even at best. they shot themselves in the foot by pumping continuously. now they have to sell three barrels for what they sold one before. it's going to drive a lot of them out of business. >> with retail sales, you lose its on the price that you charge for each gallon of gas. >> but, you know, the problem, joe, when we have these low prices, like now, rather than embrace it and say now we can start to have energy inspection, let's ramp up these projects, let's look at alternatives, we do the reverse here. people are now buying more suvs, they're looking at getting that second car. they think short-term thinking, when we need to be thinking long-term. >> right. i don't know. if you've got more than two kids, you've got to buy an suv, kevin, right? >> i have two, yeah. you're right. but i mean, we aren't

changing -- >> you have to cram them into a smart car? >> no. >> well, look, a lot of people are looking at buying a hybrid car with when gas was $4 a gallon are not looking at that car any more. they're looking at an suv or something else. they have that disposable income now. they're going to use it. we're not looking at the lom long-term is my point. >> what about companies that look smart buying oil and gas assets? and i'm not thinking of anyone in particular like maybe our former parent. but didn't ge just totally rebalance its portfolio into a big oil and gas price? i mean, are all the assets that that company bought now being marked down? >> yeah. and the bottom line is, any of these companies that are going to snatch up some of these smaller companies or strategic companies in the energy sector are going to really be the win-win at the end of the day. because these prices will go back up. for example, you know, one of our main imports from nigeria.

we have not imported more oil from nigeria for a long time now. they're really hurting. who are they going to sell it to? china. china buys this stuff when it's cheap. china gobbles this stuff up. they're going to establish a relationship in nigeria. we're no longer going to have that relationship or it's going to be a lot worse. when oil prices ramp back up, who are they going to go to? the whole cycle begins again. we could have a real snap. time frame, i'm not sure. >> who knows. we've been stuck up there at a hundred for years and years. who knows if there's an extended period down below 70. thank you, kevin. we'll see you later. all right. the dow and s&p's winning streak is in jeopardy this week. both are down 2% as we head into the final session of the week. one of the key factor necessary that slide, as we count down to the final days of the year, the dow is up over 6% for the year.that's more than a thousand

points. how will 2014 finish and what's on done for the few year? right now we are joined by mike leshini. also with us is julian emanual. is santa claus coming this year or is he a little too busy? >> he may be delayed towards maybe later december. the problem here is that you actually have a couple of critical ah-ha moments in the market this week. the consumer sees the jobs report from last week and retail sales this week and says, okay, this oil dividend is actually more permanent. so now i'm ready to spend. but for the market, that means that interest rates are going to rise next year and the market has doubted that all along. the fed may change its language next week. every time you've been in that situation this year, there's been indigestion in the near term. >> so we're still not quite ready to walk on our own two feet? >> no. but the fed will get us there.

of course. but, you know, for the time being, there is this uncertainty and certainly the volatility in the oil price is creating more uncertainty and we've had an enormous run up off that october bottom, as well. >> mark, how should we be looking at this? we're concerned about the fed actually raising rates? is it we're concerned about volatility and oil prices and something that should be a good thing? >> well, i think it is a good thing at the end of the day. i think what we're seeing is a revisitation of what we saw in the middle of septd, which was we had full valuations in the equity of the market and we got those back and some i think. given what earnings are for 2015, being met with concerns about weak global demand. obviously, one of the factors that people are trying to -- of the decline in oil prices is how much is attributed to supply abundance? how much is attributed to the strength in the dollar and how much is being attributed to weakening demand?

if it's the last that is taking a more majority position, which isn't our view, our base case is it's a majority position, but still important nonetheless. that's a reflection on why stocks should be derated if the consequences ultimately are weaker growth overall. 44% of the s&p 500 companies derive their earnings, the profits from overseas markets, and as a consequence, perhaps those earnings estimates need to be taken down and are already in the process of coming down from 129 to 130 at the beginning of the year to today a little over $127 for 2015. >> so you're concerned about the strong dollar? that would be the biggest thing you worry about? >> i worry about it, not so much in the context of it being a bad thing for the u.s. ultimately since we are the world's reserve currency, i view that opportunity to keep that position as a privilege, not an entitlement. so the strength of the dollar i think generally is a good thing. but it may weigh on what the fed does in terms of perhaps what market participants are

handicapping. i think that may be a contributing factor as to why it is the fed defers the decision into later 2015 if not even 2016. >> julian, mark just said that he worries about overvaluations like we saw back in september. do you think the market has gotten ahead of itself even with the gu news that we keep hearing from economic numbers? >> in the near term, there is a little bit of overexuberance. but when we look out into 2015, but no means are things stretched. certainly when you look at passable markets. in fact, when we looked at bull market stops of the last 50, 60 years, the average multiple ends up being closer to 20 times which, if you're looking at estimates for 2015, ours is below consensus right now, $126. that number gets you closes to 2500 on the s&p. >> julian, mark, thanks for joining us and have a great weekend. >> thank you. when we return, hear what

lloyd blankfein has to say about oil prices and how he's rating the economy. plus, california could see the worst storm in five years. we're going to get a check on the pineapple express right after the break. daughter: do you and mom still have money with that broker? dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way. daughter: you sure?

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take a look at these pictures live from the west coast. power outages. let's head to keith from the weather channel. >> here is the heavy rain. let's take a look at los angeles right now. what you're seeing in these green boxes is a flash flood warning. one thing we're watching is a little bit of rotation with some of these showers and thunderstorms. it wouldn't shock me to see a funnel cloud in the los angeles area here. really strong stuff, not only do we see rain causing mudslides, but some really strong winds. we're looking at a high wind morning. the wind advisory goes right into the coastline. saw some whipped gusts over hurricane speeds. that was last night into early this morning. so still some really strong winds to be had. as this now moves into the sierra nevada range, we're looking at snow there. the snow level about 7,000 feet, dropping slowly as the storm moves onshore. for the most part, places like tahoe that want snow, we're

going to see around 5 to 8 inches of snow there. and two plus feet of snow is in the high terrain. the dangerous part of this storm system has been the mudslide, the heavy rainfall, some good news when you talk about the drought. how about the rest of the country? pretty quiet. this storm system out west is your story. the middle part of the story will be warm. rain, wind, snow, all that kind of stuff. it's going to be quiet. temperatures cool for this weekend in places like new york city. coming in at 44. that's still a few degrees below average. atlanta popping back up and this storm system that is out west right now will eventually move into the central plains on sunday. it will morph at that point and there will be a chance for stronger storms and on the back side of it we'll be seeing some snow. so guys, the west coast, they did need some rain, for sure. unfortunately it's coming down quicker and coming with some heavy wind, as well. >> thank you for that report. in the meantime, let's go

international right now. goldman sachs chairman and ceo lloyd blankfine talking about china starting to dominate. >> this could very much be the chinese century, the american century, it may have been the american century, but every year wasn't an american year. there were a lot of problems. in fact, we had a lot of problems more than one year in a row. we had a depression that lasted ultimately ten year. it was still a really good century. i wouldn't want to leave china with another 85 years to go in the century. >> it has been a wild week for some of the markets outside of wall street. michelle caruso-cabrera is here to do some globe-trotting with us. >> good morning. the chinese stock market had some volatility, an 8% decline, finally finished down 5.4%. ouch. a lot of debate about whether or

not that was some sort of milestone event, which suggests the beginning of some kind of -- a couple of people are saying this is heralding a huge bull market coming in china. on the short-term. on the long-term, i think lloyd blankfein could very well be right. the hurdle is that china has to get so many things right in order for this to be the shine he's century. there was a time when we thought it might be the japanese century and they were in a much better position than the chinese are back then. >> it was the japanese 20 years that we all remember. >> and that we worried about. >> but it's 20 years where it's been -- they've been sort of the poster child for messing up the banking system and everything else. >> or not fixing the banking system for so long, right. >> remember when barry stone came in here and said china was

a company masquerading as a country? my question is maybe they put themselves in the same soup we're in. maybe they go on a five to ten-year run. >> they have -- there's so many other levers that they can pull. there was a time when there used to be 200 or 300 ministries. but they're making government smaller and smaller and smaller is less a part of the economy. >> have we met yet on the way up and on the way down? >> i wondered about that. >> so there was a lot of things that they can do, but those are some of the hardest things to do. we're still talking about the bloody interest rates. one of the guests we had yesterday, his last name is shia. he called the oil price decline because of the decline demand that he called in china. he said look, they're done building up those billion buildings. they're empty, they're sitting

there. they can't do that again. he thinks prices like this will last for five years based on the chinese lack of command. >> you're talking about the real estate market there is in the dumps. they've built all this stuff. it's empty. they can't build any more. construction companies are offering all kinds of discounts, etcetera. there is where the decline in demand comes from. so yeah, that's the core question we're asking about oil right now. what if it's heralding some kind of huge deflationary situation? >> it's bad if it's a demand picture. >> we think it's a little bit of both, right? >> it could be 991 or 50/50. right? >> the prevailing view supply -- >> i do, yeah. >> i disagree. i think there is a great concern that it's also about demand. absolutely. whether or not it's about

chinese demand, for sure. >> what about russia? >> let's pick up russia. significant news in russia today. take a look at the ruble. we're going to show you this chart. at the bottom, we're showing you the strength in dollar over time, which has been huge. 57.6. this is so far away. the ruble has got nearly 58 this morning. that would have been an all-time low. we believe the central bank, according to reuters or traders, they think that they intervene by some $700 million today. why this is so significant? russia raised interest rates yesterday by 100 basis points. here, we're ringing our hands about when the fed may raise interest rates by 25 basis points. there were some who had suggested russia would raise interest rates by 400 basis points. >> that is a lot of -- of the 25 of the last more than a hundred. >> okay. but still, it's a huge move, right? they're at 10, right?

my point is that they have done what they can to try to defend the ruble and it doesn't work, right? they have to keep throwing money at it. >> putin is in a bad mood. and he even said, if i didn't get the time person of the year, he thought taylor swift should have gotten. so he's still unhappy about being -- >> i want to tell you two more things about what's going on in russia. there is clearly division between putin and the central bank because remember, the central bank like a month ago said we're not intervening any more. the central bank is intervening. >> all right. we've got to go. >> they've banned advertising on cable tv in russia, ones owned by foreign broadcasters starting january 1st. >> that's not going be profitable. so you'll go away. >> all right. we've got to go. andrew, citigroup and goldman, like their analysts were saying, we'll write really good research reports. >> that is something from the past that was a problem.

did it ever go away? >> no. >> if you're going to do the ipo, you're not going to do a crappy -- i like what this one guy said. i would crawl on broken glass dragging my exposed junk to get this deal. is he talking about garbage wind him? >> a bag of garbage behind him. >> and it's like a see-through bag so you can see his junk? all right. coming up, which retailers are hot this holiday season. we hear the names that are dominating. we're going to tell you in the e-commerce world. >> too bad this news hadn't come out before we talked to lloyd blankfine yesterday. >> i know. it's the national ugly sweater day. we're going to some of those popping up around the studio later in the show. as we head to break, here is a look at yesterday's winners & losers. new cadillac.... ♪

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. in the headlines this morning, that government shutdown that was never going to happen again came within like two hours has the house did pass a $1.1

trillion spending bill. got just one vote more than was needed to pass. >> that was with the help of the president and boehner and mcconnell, everybody pushing on these things, too. >> biden had to go to the hill. >> you can say this because it was a bipartisan compromise. you can either -- you can do half empty or half full. you can say we did some bipartisan compromise or we did it with one vote and by pressure. >> most of the leadership was on the same side for that. >> economists think it's going to show a decline of 0.1%. maybe in the future months we may see more of that because of this. oil prices are likely to slump even further in 2015 because of the international energy agency which predicts more supply and slowing demand growth. slowing growth. that's one thing we always have to -- no one is saying year over

year we're going to use. it's just not growing. >> or as much as we've been finding. the growth, we've been finding more supply than the demand has been growing. >> take a look at what's been happening with the futures. you'll see right now the dow futures are down triple digits. the decline of 134 points below fair value. s&p futures are down by 16 points and the nasdaq off by 40. this is coming in a week when the dow and the s&p 500 are on track to come in with a losing week for the first time in the last eight weeks. also wrb check out oil prices. yesterday, falling below $60 a barrel. this morning, dipping below $59 a barrel. down by 1.8% right now. back above 59, sitting right at $59.24. take a look at what's been happening to the ten-year. while all this other chaos has been happening, the ten-year has been looking like a better and better place to put your money. yielding 2.127%.

>> so way above italy, shane. >> sure. >> germany. >> yeah. >> japan. >> take a look at the dollar and the currency markets and how long that plays out. dollar is weaker across the board. dollar/yen is at 118.18. gold prices at least at this hour look like they are -- you know, they haven't budged. $1,224.64 an ounce. >> good to see on a friday down 134 points as the market opens. >> get nervous going into a long weekend. >> you told me that this weekend was supposed to be lousy and next week it's supposed to get better. >> you know, on monday, i just said -- >> paulson is pretty -- looking pretty good. >> yeah. jim paulson, yeah. >> we are now just two short weeks away from christmas. have you guys done gifts, everybody? >> there's a lot of online activity in my house. >> but you're not -- >> not part of it.

>> you're looking at that credit card, right? >> yes, i am. >> christmas and online shopping retailers are trying to clean up this holiday season. analysts are thanking the mobile world for a lot of their profits because joe using apple pay to buy everything. here to take us inside all those numbers, the executive chairman and co-founder of comp. good morning to you. mobile, mobile, mobile is apparently where all the buying is happening. when people say they're buying on mobile, where are they buying? are they sitting at home using their mobile phone instead of using a -- a desktop or going to the store? i mean, when we keep saying mobile versus deck top, how are we thinking about that? >> yeah. so i think both are happening. certainly these devices are being used while the consumer is in the store. to check prices and even find the lowest price. and sometimes the purchase will then occur there in the store off the mobile device.

but i think a lot of it still happens at home off the desktop. the desktop is accounting for about 85% or so of all sales online. so -- but i think the important point about mobile is that it's really putting, i think, pricing power in the hands of the consumer. >> right. but if most of it is still going on at home, when people say that mobile is really infiltrating and people are doing it in store, they're checking prices in store, you know, all of these hatmakers or online folks have upgraded apps where you can take a picture or scan the bar code and things like that. how much of that do we think is really going on? >> yeah. you know, apps are a really important. apps are now accounting for about half of all the time online, which is a staggering statistic. the challenge, though, is to get the app downloaded on to the device and then to get the consumer to use it. if you look at the way these apps are used, amazon and ebay

historically were really dominant in terms of the retail activity. but this year we're seeing walmart and target, both of those retailers being pretty aggressive with their apps. they seem to be doing very well in terms of use of those apps by the consumer. >> cyber monday, is cyber monday still the greatest day in the history of online shopping? >> yes. >> and is it moving forward? a lot of people are saying black friday has become cyber monday. >> yeah, no, cyber monday is still a dominant day. it saw about $2.5 billion in sales this year. up about 25% versus a year ago. i think this issue of whether or not sales will pull forward has been exaggerated. there might be some confusion as to whether or not sales have been pulled forward from the stores as opposed to whether it was shifting online and what we think happened is a pretty major shift of online this year with mobile devices driving it. >> i saw a couple of interesting studies recently that suggested that buying on black friday or buying on cyber monday if you're

looking strictly for value actually not always the best day to buy. there are still better days later on in the holiday season. do you actually track those numbers? >> yeah, we do. it's an interesting point because last year, if you look at what happened, the season kind of softens as we went into december. there were only 26 shopping days between thanksgiving and christmas. so it put a lot of pressure on buying. and i think it furnd out to be a little softer. i'm wondering whether the retailers figured out this year that they need to keep running these heavy promotions later in the season to make sure that they capture all of that consumer demand. >> okay. thank you for joining us this morning. happy holidays. >> thank you. >> have you done all your online shopping? you're done? >> am i done? i'm done. >> okay. thank you. >> holiday shopping is never

done, not until the day is here. up next, taking you to the top business story of the year. and still ahead this morning, author and columnist for the new yorker takes us inside a controversy brewing in the $75 billion world of blood testing. coming up at 7:30 a.m., the road to america's oil independence with bill richardson. and at 7:45, mr. wonderful himself, kevin o'leary brings the shark tank to the squawk set. right now, take a quick check off what's happening in the european markets. red arrows across the board, steep declines led by a drop of 1.7% for the cac in france. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably.

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the results of our quarterly cnbc global cfo council survey are in. the falling price of oil has been maimed the top business story of the year by many of our members. the council represents some of the largest companies in the world and collectively manages more than $2 trillion in market capitalization across a wide variety of sectors. in the survey, which closed on wednesday, nearly half of all respondents believed crude oil would fall below $60 a barrel. one day later, they were profb right. just under 50% are projecting a slight earnings boost because of a drop in gas prices. about 43% said prices will have no impact on their firm's bottom line this quarter.for the full survey results, head to cfo survey council.cnbc.com. are you guilty of self-gifting or is there no shame when it comes to buying yourself what you want during

the holidays? find out how many people are checking things off their own wish list when squawk returns in just a moment. ♪ you don't need to think about the energy that makes our lives possible. because we do. we're exxonmobil and powering the world responsibly is our job. because boiling an egg... isn't as simple as just boiling an egg.

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tdd# 1-800-345-2550 your go-to for trading know-how. tdd# 1-800-345-2550 ♪ welcome back, everybody. everybody is guilty of it but should they feel guilty of doing it? self-gifting during the holidays. courtney, i've been guilty of

this myself. >> so have i. i don't think there's any shame in it. also how about giving gifts to yourself? the one for you, two more me principle. black friday weekend is a key weekend for self-gifting. shoppers this year, 77% of them said, yeah, i took advantage of discounts to buy a couple things for myself on this unofficial holiday season kickoff. retailers know we all do it. notice why vacuums and blenders are on those deals? not because they're going under the tree. and many are still buying those big items like tvs and washing machines as family gifts. they're not really wrapping up a washing machine and putting it under the tree. there's a lot of marketing for gifting for yourself. and those likely to benefit the most from self-gifting include

walmart, target, best buy, and william sonoma. a top pick for a number of people saying our home values are going up. >> it's interesting you have a target or walmart. because when i walk into those stores i can't help but walk out with a bunch of stuff i never intended to buy when i went in. even with their online shopping they catch me. and i forgot i needed that while i'm buying for everybody. >> i've spent more on myself so far this holiday season than those on my checklist. it's so terrible. >> i haven't been that bad yet. >> i intend to buy for other people and then walk out with stuff for myself. >> they don't understand because they don't buy gifts. >> what do you not have? >> i bought a sweater yesterday that i didn't have. >> i have everything. >> yeah. your sweater of the month. did you see this? "squawk box" a golden globe nomination? squawk of the town.

is that you? i don't see -- i didn't read this article, but apparently it says golden globe nomination squawk of the town. wait a minute it's birdman, michael keaton. >> it's a movie. yeah. >> we still at this point have not ever garnered a nomination. neither did angelina jolie either. >> makes sense. spoiled brat who is can't act. makes sense. >> i didn't think about that. you're right. >> thank you, amy. or was that rudin. >> i think that was rudin. >> like i said, you weren't here for that. i said in a list of minimality talented spoiled brats doesn't narrow it down. it'd be easier to mention the other ones. i'm sorry. you're casting your series. you have to be nice. sorry. coming up, is the economy really getting before the and will lower crude prices help?

we're going to kick around that with our guest host. and also a tax prediction for next year. and from controversy brewing in the $75 billion blood and testing industry to the changing media landscape, author and columnist new yorker's ken auletta is going to be our guest coming up next 37 e

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i was thinking about htaking this speed test from comcast business. oh yeah? if they can't give us faster internet or save us money, they'll give us 150 bucks. sounds like a win win. guys! faster internet? i have never been on the internet and i am doing pretty well. does he even work here? don't listen to the naysayer. take the comcast business speed test. get faster speeds or more savings, or we'll give you $150.

comcast business. built for business. . oil prices breach the $60 mark. the good, the bad, and what lower crude will mean for the nation's economy. >> ken auletta goes inside this industry. one company's secret testing methods. getting into the shark tank. >> are you going to take my deal or not? don't be a fool.

>> mr. wonderful betting big on wine on the go. kevin o'leary tells us about his latest investment as the second hour of "squawk box" begins right now. welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. check out the video that's been coming out of the west coast this morning. there is a massive storm that's been causing power outages, mudslides, flooding, homes being washed away. and more rain is expected to pound southern california. let's get to andrew. >> let's tell you about what's going on. oil prices continuing their slide this morning dropping to their lowest since july 2009. that slide may continue into 2015. the energy agency cutting its global oil