good morning. welcome back to "squawk on the street." markets today, dow opened down about 100 points. a lot of pressure from oil all morning long. low gasoline prices did bring us a massive beat in consumer sentiment. with that, we are beginning to see some buying going on as the dow shaves its losses at about half. >> let's get to our road map as we head to the weekend. stocks in the red. crude oil continuing to fall after chinese industrial production came in below expectations. >> house passing a spending bill avoiding a government shutdown

by just three hours. jamie dimon making personal phone calls to washington. >> more details emerging from the sony hack. what it means for sony's power now within the industry. >> straight ahead, the ceo of adobe will join us after beating estimates. stock is up nicely this morning. >> we start with the markets. many mark harris head of global research joins us. as the price of oil continues to come down, are you reassessing the implications for more and more investors? >> oil is linked into every market.

fx, emerging markets, we cannot escape the realities of oil hitting $58 on wti. my strategist has a very strong view. we will continue to see pressure through the first quarter. at that point, we are predicting and do expect that there will be more pressure on the saudis, at least at these levels to put that production in in a different way than they stated previously. >> how does that change your advice to investors? what does it mean for the market overall? >> i think the truth of the matter is, we got out our big strategy piece, there are places to go. the u.s. is a place you want to be. the diversification of our economy. take a look at the market as it stands today. it's under pressure. reality is we are up in double digits where we've got oil down

40%. even canadian economy which people perceive at least to be much more linked to oil, look at their market. there are places to go and opportunities. those lie specifically in equities, in particular. >> what about places to stay away from? is this negative, this move in oil for anyone other than those whose fortunes are tied to energy, namely the energy companies, those small cap players down 50% in the last few weeks? >> we put out a piece about two weeks ago talking about the correlation between oil and banks. we think most of the large banks can do pretty well in this environment. we've done a lot of correlation work there. you are right. can you own energy? do you want to buy what many people would term a falling knife? no. i think it's hard to jump into the fray. there are opportunities.

some of this is, is $58 oil where we are going to be? we are not sure necessarily that will be where we'll be in 12 months. >> on the broader question, during the recovery, there have been many instances where the financial markets disconnected from what was really going on in this economy. usually equity market did better for many reasons. because of the dislocations in asset markets, who knows where we get a sovereign default. because of that dislocation, the market doesn't do well. >> that may be an overstatement of the case. we had the arab spring going on. look at the volatility across the middle east. look at europe. one of the things we talk about in our outlook piece today is europe. europe is going to be under pressure. we've still got china which is seeing economic pressure. they'll get some benefit of the

lower prices. the u.s. remains a beacon. they can survive well through this. catch the falling knife on energy names? probably not. i don't think you need to jump in when you're seeing prices down 10% on the tape per day. i think there will be those opportunities that jump out for longer term investors to look at individual names and broader markets, including u.s. equities. >> what about the economic impact? do you think if we continue to see this slide in oil, the federal reserve will have to adjust potentially change its trajectory as we look ahead to higher interest rates next year? >> it's an unlikely scenario. we've got lower oil prices feeding to the low and middle class consumer who heading into this holiday season and beyond that are going to have more money in their pockets. a significant impact to them. on top of that, you are starting to see wage growth apart from

what's going on in energy slowly move up. i would argue the view lower end wage growth is going to move in the other direction, that could be a good thing. i don't think it accelerates the fed cycle. our general call is things are going to move faster and higher than people expect in terms of the fed move in general. that is apart from energy itself. i think that is a reaction to where we are in the economy and what the real numbers are telling us. >> by how much does this market rise next year? >> our strategist is predicting a 12% plus rise in 2015 in equity markets. i think that is based on a lot of factors. one of his jokes is markets don't die of old age. they die because there are things in the background affecting them. other than oil, which is an offset factor, there are a lot of things constructive and positive. if we are the beacon in

weakening economic areas around the world, that is a good thing for u.s. equities. >> have a good weekend. >> thank you. >> mark harris global head of research at rbc capital. >> shares of adobe trading higher after reporting better than expected quarterly earnings yesterday. john ford with all the details. >> let's look at this quarter. stocks up 7.6%. adobe came in at the high end of the revenue range 36 cents were share versus 30 cents expected. said after the usual customary dip we would see increased revenue and eps throughout the next four quarters. your subscribers are up near 3.5 million for creative cloud overall. seeming to be firing on all cylanders. thanks for joining me. >> thanks for having me.

good to be back. >> i want to ask you to take a step back. give us a sense what the read through might be on the broader economy. p given they are spending at the levels they are, what has that told you about the next levels to come and their confidence? >> we have unique insight. our digital marketing business we are processing over 30 trillion data transactions. the move online and the need for every company, whether in publishing or retail or automotive or travel, to make sure you have this experience online is more critical than it's ever been before. a lot of transactions are happening on mobile. >> you did an acquisition in

this quarter. you are looking to close it, i believe, halfway through q-1. $800 million. it's got stock images that tend to sell at a nice clip on a subscription basis for fotolia. $250 for one package for a month's worth of access. this is what customers tend to buy. is that the play here going forward? >> our vision has been to be this one-stop shop for people from inspiration to monetization. the first version was about delivering phenomenal desktop products. we delivered great mobile applications earlier this year at mac over 5 million down

loads. how can we enable the creative professionals to share their portfolio with the community? over 4 million subscribers there, as well. in addition to that right now, how do we help them monetize that? through the talent search we introduced, as well as fotolia. if you are a creative professional and want to sell your content or a marketer or creative professional and you want to buy it, you should be able to come to creative cloud to accomplish that. >> we want to bring you back to the holiday season. you've got big data in your marketing offerings. we are fond bringing our viewers some of that data here on cnbc. you predicted black friday and cyber monday online sales within 1% this year. they've been high. mobile making up 1/4 of those online sales. what have you seen since cyber monday? has mobile continued that

momentum? has the holiday season met expectations based on your predictions? how strong is it? we continue to think that will have significant tail winds. with respect to overall spend, i think it's early to see what the holiday season would look like. we continue to see people find ways to attract customers to their online offerings. >> you spent domestic cash on this deal even though fotolio's business is in europe. people expect to see tech m&a ramp up in 2015. is this a bit of a preview?

do you expect the same based on your conversations with colleagues and competitors in the valley? >> it has been a huge number of start-ups created. a number of them are not going to be stand-alone businesses. i continue to think established companies, companies with momentum like adobe are going to look for great dna as well as great technology in terms of acquisitions. when we think about digital media and digital marketing, both we have a very strong position right now. we are trying to fill in the gaps we have. >> thanks for joining us exclusively here on cnbc. investors seem impressed with this quarter. the stock continues to be up better than 7.5%. >> thanks for bringing us that interview. the birthday boy john fortt. jim stewart is here live at post nine as he always is on friday.

we'll get his take on losses for stocks this week and oil's continuing slide when "squawk on the street" comes back. how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment

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oil falling below $60 a barrel. the dow down 120 points.

joining us post nine, pulitzer prize-winning "new york times" columnist jim stewart. everyone from larry blankfein to jack lew says this drop in oil is a good thing. it doesn't feel that way or look that way in the markets, why? >> i think it is a good thing. i said that last week and standing by it. markets and investors don't like what they call shocks. this is happening very fast. people say oil is down 40% this year. that doesn't sound that bad. look at the last two weeks. that's when the bottom has fallen out of it. that is sending dislocations that take time for people to figure out. i said to jim this week and a guy came running over to me having seen me on the show and said, i'm panicking. i sold all my oil stocks. i realized that is a signal of something. he didn't think through it. knee-jerk reaction is sell.

you are seeing spilling over. now they are selling everything else to cover the money they need for everything else. you get a market dislocation like this. you are going to see irrational sudden reaction. >> you've been monitoring the political implications. geopolitical implications of all of this. what is your opinion on this debate whether opec is losing relevance? it's impacting the price of oil. >> most people think opec and by that we mean saudi arabia. they want these low prices. they want to squeeze out marginal produces to get the supply thing under control. is this going to work? they lost a lot. no question. their market share is down. i think what they have to worry about is they get the marginal producer to shut down today. how fast can they turn it back up the minute the price gets to a point where saudi arabia likes it? they have tons of reserves. they are still the world's low

cost producer. if they want to turn the spigot down tomorrow, prices will go up. they have a lot of influence. we shouldn't forget that. >> we got the house vote last night, a lot of outrage today. do you believe we've taken a step back in derivatives? are we at risk once again? >> yes. if this was a perfect world there would be intelligent regulation of these markets. i have some sympathy for the white house position. this is a compromise. you have to give up some things to get others. i think on balance, i'm glad they are going to keep the government operating. come back to this. this isn't the end of the road, is it? can elizabeth warren keep beating the drum and organizing people? with a republican congress not much will happen soon. politics is messy. you never get what you want. you are going to compromise on

something? >> what is your view of elizabeth warren? >> she is interesting. she is carving out an impressive space with certain constituency. there is a lot on the far right that likes this anti-wall street stuff, too. it is a niche. it is not mainstream yet. whether she can translate that to main street appeal remains to be seen. >> it's still locked in with the lawyers which makes me think it will be racy. >> i do think it's a good column. it's about the fall of a rain maker. i've written about diminishing job security and partnerships at big law firms. he was the top producer. i thought they had job security. he filed for bankruptcy. he was caught up in the messy

bankruptcy. he had a million dollar annual budget. parties with supermodels, taking clients to the super bowl, celebrities. i didn't get that course in law school, client development. it's a fascinating window. what it means to be a rain maker at a top law firm. it doesn't seem to have a lot to do with practicing law. >> talking about fascinating windows, this sony scandal. disney war, one of my favorite books you wrote, it would have made it easier getting hold of those e-mails. i'm curious to get your thoughts about it. >> e-mails to me have turned out to be the best friend of journalists ever invented. what i love is they give you realtime windows into what people are really thinking, saying and doing in the moment. it's so different from what they characterize it as after time

passed. it's great we are learning this, seeing this. it's embarrassing for the people who write them. it's amazing people still are impulsively pounding out whatever is on their mind without stopping to think this could be going into this for posterity. >> energy casting a pall over the markets. does that take away from the santa claus rally? >> markets are high and there is a tendency to worry. but there is an investor concern with every threat. the news is good. low oil prices are good. problems in the u.s. is good. retail sales were great in november. the u.s. economy is steaming along. employment great. there's a lot of good news out there. >> that's why we turn to you. always a valuable perspective.

jim stewart pulitzer prize-winning journalist at "the new york times." >> people love your story about the guy at the gym. avalon holdings trading lower. companies backed by cbc capital and oak hill capital. the ceo will join us. dow down 112. cute little guy, huh?

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we are watching shares of nuskin. the stock is moving lower after it forecast 2015 profits below some market expectations to stronger dollars and regulatory concerns in china. it's well off its lows. down about 0.5%. it's been a tough year for the company down about 70% overall this year. avalon holdings priced below the expected range of $20 a share. they own 227 aircrafts in its portfolio. joining us first on cnbc, the

ceo barnard slattery. it's been a crazy week in the airline business. boeing talking about long-term demand for the 747. what is the leasing market like? >> leasing market is strong. i think driven by strong noble metrics. i was in asia last month. they alone are putting on 100 million new passengers every year incrementally. the demand equation is strong. i think the market is trying to figure out is that a good or bad thing? we think it's a strong tail wind. growing airlines want more aircraft. >> if you think about it, what is the most fuel efficient hedge? that is to operate the aircraft.

with fuel at its current levels, airlines profitability forecast to be $25 billion. that's the highest it's been in certainly the 25 years i've been in this industry. >> is the growth coming from short haul, long haul? >> the primary driver of the growth is here in the you'd. i think with gdp back drop, they are leading the way globally in airline profitability. >> stock is down about 6%. it did price $20 below expected range. what do you think wall street concerns are. >> i think during the last two weeks the market was choppy. our comps traded down quite significantly during the road show. we are happy with the price. we think the market will see value in our stock.

we are trading at a discount tour. we are about 3d 00 million higher than market cap today. we think the market will see that. >> you are smaller than other players. all of you are based in ireland. that's where everybody is. most have done a tax aversion to do that. what do you do without the diversity of fleet or access to capital ge or ability to buy in bulk? how do you counter that? what is your unique selling point against that? >> this management team has a couple of unique differentiators. we have a lot of experience competing with the big guys. our cost to capital is competitive. this is the depth of our relationships with airlines globally.

our team has done and trans yakted with over 150 airlines over the last 20 years. depth of our management team and the fact we are in market with five different offerses around the world, we've got our finger on the pulse. we punch quite a bit above our weight. we started with zero dollars in 2010 and grown it to be top ten global clarity reign. >> is it just airlines or are you seeing more institutionals and other big money sources getting in on leasing aircraft as they look for alternative sources of income? >> one of the big lessons for institutional, equity and debt investors, this asset class performed really well. we've seen very significant inflows of institutional debt capital, cost of funding has continued to drop. we are now borrowing at an investment grade rating. we are seeing a lot of interest on the equity side.

for example, avalon has a joint venture with wells fargo. it's been a profitable investment for them. >> we are getting news that the air space over heathrow has been closed due to a power outage, computer failure. we'll see what happens. we are seeing a sell-off in some of the airline names. thank you very much. please come back. fascinating business. >> thank you very much. >> wayfair falling about 25%. will the e-commerce furniture seller turn in a holiday season to turn that stock around? the ceo will join us for an exclusive interview next. daughter: do you and mom still have money with that broker?

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we're for net neutrality protection. now, here's some news you may find even more surprising. we're comcast. the only isp legally bound by full net neutrality rules. a little over an hour trading here. 10:30 on wall street. consumer sentiment much better than expected, jumping five points to a reading of 93.8. that is the highest level in almost eight years. shares of gopro up almost 3%. upgraded from overweight to neutral, noting the stock had fallen 24% since the secondary offering last month. delta airlines among the stocks

hitting all-time highs. the carrier up more than 75% so far this year. a lot of that has to do with lower fuel prices. >> absolutely. oil hitting its lowest point in more than five years. jackie deangelis live at the nymex with more on that. [ no audio ] >> we have to get jackie's mic fixed in a moment. we did crack below $59. only $6 away from cutting the june high in half which was 107.73. >> obviously, it's a bear market. people are focused on the demand side. >> i'm here. i was talking about pricing. i apologize about that technical difficulty. we are coming off the session lows right now looking at 58.77. the next level is 58.32. that is the low we saw july 13,

2009. technical pressure to the downside certainly mounting here. look to the monthly continuation chart from 2005. it shows us that potentially we could see 55 by january 1st. we could see $40 by the summer. that is what traders are focusing on now. i want to bring up the point prices in the spot market tend to be a leading indicator here. they are low. canadian select, $42. this indicates we could go lower. people are asking this question, is $50 the new $100 that we are going to stick at? you were talking about demand. obviously, we've been focused on the supply side of this. what the difference here is when we saw prices tank in 2009, you had china demand to bring us back up. we don't have that this time around. that is concerning a lot of people. back to you. >> thank you very much for that. if you auyou are traveling to w

europe, your day got worse. >> breaking news, we are learning the london air space has been closed due to a computer failure. that is due to a power outage at traffic control in stanwick. it will be closed until 1900 gmt, that is 2:00 p.m. eastern for those of us here in the united states. if there is change to that, hopefully it might open up earlier than that. that's the guidance at this stage. heathrow airport says there are no flights landing or taking off due to that air space closure. we'll bring you updates as they become available. >> people should be aware there's 1,400 flights that go through heathrow alone. this is a major international hub. there will be planes on the ground at jfk.

i don't know where you put all those airplanes. this is huge. >> it is a major disruption. especially this time of year. we'll keep watching what's happening there. it seems like it is going to cause a lot of disruptions to people's travel plans. >> to say the least. thank you for that. 12 days of christmas, the crucial time for retailers. not least for wayfair the e-commerce home finishing that debuted here with its ipo about two months ago. returning for another cnbc interview is the founder and ceo. welcome back to the program. >> thank you. >> how is the business performing? >> business is doing great. last quarter we grew over 40% in total. our direct retail business grew 57%. we continue to grow at a great rate. >> i have to ask about the stock price. it may be you are one of the most compelling investments for next year.

people should be aware you priced at $29 two months ago. after a huge surge you are down to 19 a share. you lost about 1/3 of the value. how are you talking to people about that negative view that the market has taken at the moment? >> my view has always been simple on that. you do not control the stock price over the short run. over the long run it reflects the real value. short run it's a voting machine, long run is a weighing machine. i'm a big shareholder owning between 20%, 25% of the stock. my co-founder owns a similar amount. we are super excited about what we see in the business. >> it's increasing that brand awareness. what can you tell us about -- i don't know how you gauge it, how high up the google search you are.

>> sure. we take awareness measurements aided and unaided awareness measurements, look at google search counts. as of august after marketing the site a little over two years we are up 52%. that is a number that continued to grow over time. we are happy with the way the brand is getting to be known. we think that is driving the tremendous revenue growth. our whole goal is to continue to offer consumers something differentiated which we do. we are expanding that. frankly to continue to grow and get more and more customers. >> are you seeing a notable bump in sales due to oil prices in the $58 region on wti? what is the income spectrum of your typical customer? >> we focus on the mass affluent customer, $60,000 to $175,000.

that is a customer with a limited amount of discretionary income. the more they have in their pocket, the better off we'll be with their ability to spend. the reason we are growing so fast, what overshadows gas prices is the offline to online shift. gas prices are a tail wind. the huge opportunity is coming out of the fact consumers prefer shopping online. >> i remember when you went public. one of the investor concerns was the speed and time of delivery because it was furniture and it was harder to get to the customer. how are you managing that this holiday season? >> when we went public, the number citing was the average order shipped in 2.4 days, a leading number in the home goods industry. as of the last quarter we announced it was down to 2.1 day. we have a tremendous selection but deliver quickly. that's one of the things that is compelling for consumers. >> what is the business model?

>> we handle transportation logistics. we do it while not carrying very much inventory. that's the key. >> people buy your stock saying this is an undeveloped area of the market. i'm trying to see where you fit and what the future of the industry is. in online travel agencies, it's been clear having your own propriety inventory you can put online is very valuable. you have 7,000 supply contracts at the moment. with such a low market cap at $1.6 billion, whether you are a great bolt on for alibaba or rub against their business model? where does the m&a come from or does it not come? >> home is its own market

because consumers want unique things and count on the retailer to provide them with merchandising. the reason we are taking so much share, we are doing it. it's a market which others are not doing that. whether or not others are interested in acquiring wayfair, that's for them to decide. what we are focused on is there is such a huge opportunity. $233 billion market in the u.s. shifting online right now. continuing to see the growth with them coming back. >> good to see you. thank you for your time, co-founder and chairman of wayfair. have a good weekend. >> thank you. >> when we come back, mark mahaney joining us live with his outlook for internet stocks next year. which one is his top pick? they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock.

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market's been under pressure all morning long but close to the lows of the session. dow down 131. s&p down about 13. whether or not it's related, we are getting news about this air space closure over heathrow. no flights in or out until 2:00 p.m. eastern time. let's get a market flash from dom chou. >> one stock worse off morgan stanley. stock moving lower after analysts downgraded to neutral from prior buy based on valuation. firm saying the stock is trading at a premium to its peer group, the overall financial group. stock is currently off by 1.6%. back to you. >> thank you very much. it is time to send it over to chicago for the santelli

exchange. >> thank you, sara. i would like to welcome our guest. he is our short money guy. a couple of things that sum up before we get into the meat of our conversation to bring listeners and viewers up to speed. moody's downgraded outlook from stable to negative on money funds. we see the fed's balance sheet a thursday regular. increased close to $4.5 trillion. that's the landscape. we see what's going on with issues affecting energy and credit. same credit five months ago talking about the search for yield was intense. like the cubs searching for a world series title. tell me trends you are seeing first with money supply referenced against history. >> against history, money supply hasn't grown as it should. we should be looking at about 7.5% increase. from a year ago through the end of the third quarter which the fed released yesterday.

it grew at 4.3% which is what the fed has had it hat the past two years so we are short. >> that short money, where did it end up? is it hidden somewhere? >> basically what it did was stayed on the books of the banks. >> there you go. >> in excess reserves. >> as a matter of fact, in some of your research, how have you equated that number with the notion of ms? >> we should be looking at $15.8 trillion out there in m-1, m-2, m-3 we are looking at $13.5 roughly. that is about 2.4 trillion gap. $2.8 trillion in excess reserves. what the fed tried to pump into the system, the banks are just holding. >> yra harris discussed it isn't their models didn't work but human behavior is the issue. it didn't go to the parts they

wanted liquidity to go to. >> exactly. if you take this down to the micro level, we see the highest level balances in checking accounts since world war ii. >> seriously? >> exactly. >> what rate are they getting? >> nothing. >> when i see that and i see money fund since the crisis are down a bit and outlook is negative, and volatility of the market, what do you think will happen to the flows of money funds with this volatility? >> in the money funds, they will probably continue to show a decline because if we go back to 2008, there was $13.5 trillion in the money funds. that funded the stock market. >> it hasn't been money coming out of treasuries. absolutely, it hasn't. what we are looking at is the fact the banks are holding moichblt the consumer is holding money. if the consumer makes any move

financially, they reduce their outstanding credit card debt from a year ago. >> my opinion it's a good thing. from consumption, economy, based on what they like, i think fed . i don't care they are happy about it. they would like to see people spend more than they have and increase credit. >> so we can see why black friday was down because the consumer is uncertain. >> -- gasoline, gasoline mike it's been a pleasure. >> thank you. >> simon hobbs, back to you. >> up next on the program. sony pictures hacking nightmare getting worse. new mails and now employee medical records leaked. the latest details on the hack around the world and what it does for sony's negotiating power after this break.

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to employee medical records exposed. our julia boorstin is live in l.a. with a look at the ripple not just for sony but the industry. and amy pascal now talking to the wrap about whether or not she's too damaged to lead sony? she says i hope it's not true. >> right. we'll have to see what happens there. this is just the beginning of the fallout and what happens with their executive lineup. this is really having effect not just at sony but across hollywood. folks i told me there is a massive shift away from e-mail and towards the phone. people are treating a e-mail with the formataliulate of the letter. i'm also hearing many people including even amy pascal have made preemptive phone calls to apologize to people who might be offended if even more emails get

out. and other information released is the how much they pay people and puts them at a massive disadvantage in negotiating deals going forward. and now we're seeing big hollywood names respond to the leaked emails. releasing private emails to hurt people is same as re -- >> bipolar, 28-year-old lunatic? i always thought myself more eccentric. kevin heart tweetings, i refusing to broken. time to get back to building this empire i've always dreamed off. i'm sure we'll hear from more of the offends parties. >> i have a feeling there will be. this as story that never ends. all sorts of impact. thanks for the impact on

hollywood for now. now to jon fortt with a look at what's coming up next on "squawk alley." >> what we've got coming up is mark mahaney's top tech picks into 2015. does he still like netflix? we'll find out. and ub we are a big investment from china. what company it's from and why it might be important. and even williams not so impress wds the instagram's user growth. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move, wherever you are.

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s&p 500 down almost 8%. crude oil is the story. down almost 3% for wti crude. u.s. crude. 58.21 a barrel. >> it's worth pointing out that since we got that great employment report a week ago. since thursday night the market down about 2 and a half percent. so despite the strong growth t potential for dislocation is clearly unnerving people. >> good morning. it is 8:00 at uber in san francisco. 11:00 a.m. here on wall street.

"squawk alley" is live. welcome too "squawk alley." joining us mr. wonderful, kevin o'leary, chairman of the o'leary funds, investor on shark tank. kayla is off today. jon fortt with us as always. on a day turning a little rough. dow down 182. rough owl morning. oil is a big reason. stocks likely to stay in the red for the week for the first time in seven weeks. our eyes on crude down more than

2% in trading this morning. and dow is a couple hundred points from testing that 50 dwa moving average. once again we continue to talk about the spillover effects. because oil, it's not how much it's come down although that's amaking but how quickly. >> people forget that commodities when they correct don't touch the sides. in the nineties we saw oil go from ninety to eight on nine. and it was a rapid decline. and everybody is talking about oil all day long. if you could choose between two oil prices for 25 20 15 as an s&p investor which is what i am. $100 or 40. which would you prefer for the economy. >> does it matter what names you currently hold? >> 20% of the names in the s&p and somehow associated with the transportation or extraction of oil. those guys are the toast.

what about the benefit from the low impact cost of oil. i want to see oil at 30 bucks. bring it down so that everybody has a lower input cost, including the consumer and i'll make a ton of money. keep it going. >> putting one refinancing and the failure of highly leveraged companies. >> and if you had practiced that diversification, yes 18% of the crap in jnk is crap. that's why they call it junk. but pragmatically this is wonderful for the economy. and i personally hope oil goes to 35 bucks and stays there. >> how volatile do you think theses oil levels are. is this demand driven because of what's happening in emerging markets the levels are likely to stay low? or is it supply driven where opec if they decide to make a different call all of a sudden could send it higher.

>> i'mic to to other side of the debate. i believe it is supply driven. we are so good with our technology extruding oil out of shale and fracking that we have dumped hundreds of thousands of barrels onto the market. and this is the result. we wanted to do this. we want energy independence. we want low priced oil. do i care what's going to happen to putin? i couldn't care less h.'s got it coming to him. he's the guy that's screwed. there is always the worry that if he has to go po plan b, however dangerous. >> he may not be the guy. he made a lot of promises to the to a lot of people and they are not coming true. they may find a new putin. and they may be a better friend. if i had to bet between 40 and a 100, i'm going with 40. and looks like we're getting there, carl. >> is there a level on the broader market oil and energy

where you put cash to work. >> i'm right now oim working on the l and p section. the plieps are getting sclau it slaughtered. if you look at applianpipelines. some of them corrected 40%. that is the opportunity. but we're not finished had downside. and all they are doing is transporting. they don't care the cost per barrel. secondarily i'm be nibbling on junk bonds but not until february. that is when the collapses and brupss are going to happen. and i'll be one of those guys buying them pennies on the dollar. >> with us for the hour kechb. it is good to have you here. we want to get to this story out of london. the dough is down almost 200.

>> hi erveryone. we're just hearing via dow jones newswise they are announcing via the nats the national air traffic services group, that the u.k. air space has reopened but traffic remains restricted. we've opened for business but traffic volumes are restricted after this supposed computer failure. what we know now within the last half hour that there was an official statement talking how flights had been delayed because of a power outnj a national traffic control center. no traffic had been landing or departing. we just have some information now that they have started to see reopening of the air space but the traffic remains restricts, the second busiest airport in the u.k. no flights are depart bug some

flights are arriving. manchester, they are announcing they are unaffected by the cloelz your and ready to accept diverted flights as well. we have 12 days before christmas. this is a better time you could argue now as opposed to the 23 or 22nd or 24th of december. hea heathrow, the busiest in the u.k. so a very big inconvenience. officials stating there is a technical problem at the control center effecting u.k. air space. flights are currently experiencing delays and they will be updating us as soon as they have more information. again just underlining that further information is that the air space has reopened but traffic does remain restricted. when looking at some of the

airport operators and some of the stocks out there we're not seeing a whole lot of movement in the airlines. a little drop but not by much. still seems very much much an oil and gas story we're going with here. the oil sector off the most almost by 3%. >> thank you for that. and a reminder that the similar story happened not too long ago in chicago where air traffic control was hobbled. by in that case a fire. we'll keep an eye on this. brings together the vulnerabilities of the air infrastructure of the planet. seema modi joins us on the phone. >> i'm on a british airways flight to newark. i was supposed to depart at 3:10. but we were told there was this technical glitch right when we were about to pull away.

we've been told us all flights are grounded and this flight i'm on will be grounded until about 7:00 p.m. which is aggregabout hours from now. right now my flight stuck on the tarmac at heathrow airport. >> regretting that transfer to london seema. we'll come back to you if details warrant. thank you so much. in the meantime, kara swisher joining us to talk tech. happy belated birthday. >> thank you. >> good to hear you. i assume you're joining us on the phone because of weather. >> yes i'm on a plane too but i'll get there. >> uber reporting a story. apparently they may make some announcement next week. what are you hearing.

>> caller: uber's been looking for a chinese investor for a long time. so it's not a surprise that one of the b.a.t., [inaudible] there's lots of competitors in china. and uber is raising a lot of money to go global. and china would be one of their big markets. >> what do you make they went with baidu on this. there seems to be some level of influence that chinese entreprene entrepreneurs. qualcomm -- >> [inaudible]. >> thaf got trouble in china. you can't have trouble in china and you need to partner with one of the bigs. and those are the three big ones. any would be interesting for various reasons in terms of getting uber's app into their

services. you know, they each have different communication service, social services, ecommerce services that is important for uber to get distributed. just downloading the app is not going to happen as it happens here. >> if you can get a major in china to take a position in equity, somehow you have an instant path to the communist government that will pave your way to expand. >> i think it's a requirement. you can't not. everybody tries to get in there. and the only reason yahoo did so well is it went if alibaba in many many years ago. so i don't think there is any way without a link with a chinese company. and that is the way they are doing it. or else they have to suffer a whole bunch of competitors and rivals and copy cats. >> next up, this week instagram as you know announcing 300

million monthly active users. drew a reaction from twitter's co-founder ed williams. reasonable point of view? >> i think twitter should have had pretty pictures much sooner. that's one of the issues. is that twitter didn't really aud add pictures or more features and allowed others to get in there. and while that is true. more people discuss things on twitter is like more [ inaudible ] and they really have to catch up on that. and there is nothing wrong with pretty pictures. >> what do you make of this attack from where i sit anyway that ev makes on the monthly

active user as it applies to facebook and facebook connect. it seems like we've gotten use at to that what means for facebook and perhaps instagram but it's twitters user account a lot of people are talking about now. does he have a point? >> well exactly. monthly active users are correct and someone else is not correct. and think the problem is a lot of the metrics are confusing to people. and what they are actually counting. do you do one tweet? are you signed in. all these things have to be sorted out to understand how quickly we think we're going. the fact of the matter is twitter is not growing as fast. >> twitter's argument is that the quality of our user base is significantly better for everybody involved. investors, advertisers, users, than that of instagram. is there no merit in that argument? >> i guess sort of like saying

they. [ inaudible ] insulting someone for [ inaudible ] i think growth is what wall street is looking for. and they need to grow a user base. that is what wall street is asking for from them. >> so out on a limb and you say don't own that stock. >> me, i don't own anything. >> a lot arguing that instagram could be a $4 billion revenue business in four years. a third of the size of facebook. do you see any problem with those? >> not at all. instagram is a really interesting advertising property. i think they could be very successful. lot of people think they sold too early. but a really compelling service

and people like it. i think it's a very good product and could be a very lucrative one from an advertising point of view. >> kara have a great weekend. >> all right. sorry about that. bye. >> when we come back, netflix, just one of the mark mahaney's top picks in 2015. he'll join us with the rest of the list. and netflix, reviews of the new marco polo are less than kind. one saying it plowblows. and one top critic joins us. "squawk alley"back in a minute. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts...

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live shot of london. we are going to be getting a statement that confirms that a technical problem was reported at air traffic control near heathrow that u.k. air space itself has not been closed per se. air space capacity has been restricted in order to manage the situation rather. further information will be released as it becomes available. but clearly some vulnerabilities in the infrastructure over there. dow down still. >> near session lows here. if you look what's happening

over all we're being pressured by falling oil prices. ten year yields down 2.09. ibm having the biggest impact on the dow alone. it's at a three year low now. goldman sachs has dragged 18 points off what's happening of the dow. those are the bottom four this terms of biggest point drags so certainly shares you want to watch noo today's trading. >> netflix has big hopes for its new $90 million series marco polo now available as of midnight last night. and reviews suggest the new series falls short. variety says exhibits only a sporadic pulse. just a middling mess. and others simply saying the pilot blows. and joining us, assistant

managing editor and tv credit david wiggen. you look remarkably dry. what did you think of marco polo? and is there another series you can kind of compare its start too. >> i think everybody is obviously comparing this to game of thrones but not necessarily comparative more aaspirational. but it is netflix's bid to cover yet another base of programming. and i think that is an important factor here. this is a great big saga. and if you look at how netflix has built its programming over the last couple of years. they have done a comedy, they have done house of cards. they have done orange is the new black and built things bit by bit to prove they are competitors across the larger playing field. the show itself i think by the

fifth episode, if you are still awake. it gets really watchable. >> we're watching it on the screen. there is some beautiful imagery. naked martial arts. >> right. >> the fact that critics like error don't like anything has nothing to do with whether they will watch it. and especially as you mentioned a lot of naked martial arts. there is a lot of nudity period throughout the entire thing. juts way over the top. most of the women just seem to disrobe at the drop of a hat. and that will keep some people's attention but it is a very dark show. not dark necessarily in mood but in visual aspect is extremely underlit. moves very slowly. there are wonderful performances in it. so i think that that's -- whether that is enough to keep

people going or not, i don't know. >> do you sense an attempt to at least copy or emulate what game of thrones has been able to do? >> to some extent but i don't necessarily think this is our game of thrones if i were the netflix people. i think it is like this kind of big pageant saga stuff has been popular in television on all platforms for many many years. we've had rome and the tu dors. it's that kind of show. and it lends a certain prestige to a broadcasting network or content platform provider. >> all right david, thanks. i guess we'll see if netflix's data on what they think people want to watch is enough to override these tepid reviews at best. >> netflix also one of rbc's

most attractive stocks of the year. mark mahaney joins us. good to see you this morning. give us the favorites. >> top is amazon, then netflix and facebook. i consider those first two something of contrarian calls. they both understood performed this year, particularly amazon but we like them in and the setup in terms of the valuation and fundamentals on amazon. that is why it's our top pick. >> netflix, given that we've just seen bad reviews from critics, not that it matters apparently. but as an investor, shouldn't i be taking down the multiple i'm willing to pay because i'm now going into a risky business of guessing productions in hollywood? i don't know now -- and i've been an investor in films in my past. i don't do it anymore for the reasons i've learned. nobody can predict a hit. it is impossible. so here is a curator of content that came one a platform that

became immensely popular. i understand the cash flows interest that. now i'm taking a percentage, i'm going to make it 20% in free cash and betting the hollywood game. why doesn't that penalize the p.e. in perpetuity. >> this company is henl hedging itself and content. it is giving itself something differentiated. people compare wit hbo but it's never been hbo. it's always offered a lot of family oriented and rair exclusive content. so what they are trying to do is build their own retail model for content and on top putting in exclusive unusual content. and netflix with the size of the subscriber, they are going to be 50 million subscribers. they don't need every show to be a hit. they are going to appeal to a broad range of demographics so they can win with singles and doubles. they don't need home runs.

>> how do you think about valuations right now? we've seen netflix come down. you still have a high target. i think 550. amazon too has quite a valuation though it is investing a lot in content and disappointing some investors. what gives you the confidence that these valuations not just for the stocks but across their competitors as well are going to hold up. >> the set up is valuations into 15 are more reasonable than 14 we with think. we tried to be relatively defensive in 14. and had a major correction in the internet sector that created nice growth opportunities in names like facebook and then we've had a small correction in the september corridor f and come back off that. all in, valuations now are more attractive across the group than in about 18 month sogs that gives us a chance to get further out on the risk profile. we like amazon. this is trading close to a trough multiple on the price to sales base basis.

the market have very -- and the market may be right. but that's what priced a into the stock here. we think you can win with either one of those working higher. >> and we should mention small mid cap like yelp, shutter stock and pandora. we'll talk those another time. thanks. breaking news from steve leisman. >> the fed president announces he will not seek reappointment. unclear when they will have a new president over there and this is a loss for the dovish side of the federal open market committee. coacher lakota of course dissented on the last meeting where he wanted to tie policy for to expectations and inflation which is running below the fed's target. it is unclear of the immediate

effect. minneapolis fed president would not have a vote next year. but of course all of these members contribute, carl. so his dovish voice will be lost and that is going to be counterbalanced by the loss of two other hawks next year as well. >> surprise to you or no? >> it is. he was only appointed in 2009. and a lot of these presidents stay quite a bit longer than that. the ones appointed by the president and group by the senate they tend to rotate out on a shorter tenure. the minneapolis fed doesn't have as far as i can tell a tradition of putting in dovish or hawkish presidents so it is going to be a bit of a wild card who gets reappointed and what their particular fence on policy is. i'm guessing he goes back to

[inaudible] . >> interesting development steve. thank you for bringing us that. quick update on london. the spit entity in charge of ai traffic control, says it has been restored, slowly resuming normal operations and no impact on u.s. flights from the outage. we'll check in with seema modedy if we can momentarily.y if we can momentarily. . >> since the open the dow down almost 200 points now. and we've got reaction from the ceo of adobe a little later on this hour. they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now.

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aun abated. the dow down 211. s&p is within a stone's throw of a one handle agains a 2013. this is now the dow's second worst week of the year. s&p's second worst week of the year and december is turning into the worst month since january. so we're going to see how the afternoon session shapes up and how europe's close effects matters. seema mody has been stuck on the tarmac in london. and here to give us an update on the phone. >> caller: [ inaudible ] >> well they may have the planes back in the air but still can't get a good signal. we'll check in again when we can. >> okay. let's bring in simon hobbs. his signal is pretty good. he's right here.

countdown to the close in the u.k. >> and the signal is blinking red for europe at the moment. this is a big day as you can see. euro zone industrial production came through disappointing. we got the results of the takeup on the second batch of cheat money, $130 billion, disappoints. not enough to compensate for the maturing of the three year ltros. au autoall points to more qe. today's stock suggesting they might be concerned of risk and buying higher rated bonds. and overall for the week, and this is what i think should be the main take away here. european stocks are down almost 6%. much worse performance than you have here from the s&p. oil is clearly an issue. greece is clearly an issue. the prime minister suggesting it would be catastrophic if they don't elect the new president

and have to go to elections. you can see a move over 200 basis points and of course the front end of the curve is move dog even greater extent than that. the fresh concern is not just russia and earnings to russia. on that note dansk said sell sales of the carlsberg today. you have also had a slew of downgrades in big chemicals but we'll leave that for another time. fashion and luxury has also been active today. permira selling 11% of hugo boss. so that's down. keurig is changing senior management at gucci. and so much for -- potentially buying coach. still in negative territory but

a rough day, a rough week for europe. the first vote on the new presidency in greece is on wednesday, the 17th. >> all right simon. thank you. when we come back, still watching the markets this morning. dow down almost 200 points. back in a minute. my name is karen and i have diabetic nerve pain. it's progressive pain. first that feeling of numbness. then hot pins. almost like lightning bolts, hot strikes into my feet. so my doctor prescribed lyrica. the pain has been reduced

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sfloo selling going on. let's get a market flash from dom chu. >> we already know this. the dow is near session lows right now.

energy is not the worst performing but still with crude oil down about 3% in near session lows, energy one of the weakest so far today. more than 7% down this week alone. on the large cap side, a tough week overall for energy stocks. a focus for a lot of investors still in today's trade. >> let's bring in benn willis from princeton securities. ben we were talking 6:00 a.m. this morning where you thought oil was going. we're not there yet in your view. >> no. and several months ago i had a discussion with people that again thought i was crazy. that doesn't mean they are wrong, that oil was going to trade down dramatically. there was no justification on a pure supply/demand for it to be trading where it was. it was trading on the supply/demand of money.

go back on your chart and you will see oil at 100 a barrel. i think there is a strong possibility oil touches a 45 handle before we see a 75. >> and then what? that's when the pain tolerance is hit. >> again, bigger picture. i don't want to seem too unusual in my thought process here but i think this is part of a currency war that is going on. and the currency being used is oil. and that is a currency against russia. this as bloodless war we are trying to fight with russia right now. >> it's been said it's hurting putin more than any section we could ever create. >> we're try to do it politic politically and we're getting it done by the private markets. about 20% of the high yield debt issued in the last five years was to build out shale, provide for fracking technology, etc.

and that's built into a lot of the indices i trade in debt. should i make the assumption that all that stuff just goes to zero? >> i think the market on the leverage side is probably over reacting. because in the shale -- what little i know about the shale side is that the cost to production is far less still than where oil is trading right now. as an aggregate number. >> about 38 bukts. that is the bare bone number. >> correct. so providing enough production and we just had report that eagle ford shale just produced it's billionth barrel. with that production if there is enough demand within the united states that we don't have to export that should be a situation where you are still covering cost and theoretically covering the cost of your carry on the loan obligations. >> if you are right, the screaming buy of the january, february are even equity investors is the junk debt of the junior and mid cap shale

guys. that is what i predict to be the hottest upside trade if you are right. >> i tend to agree. -- >> love that space. >> you have a stock that trades over here in the compression business giving you an 11 and a half percent dividend and the shortest term contract they have right now on compression gas is three years out. >> we're not finished there. i think there is more pain. >> i don't disagree. but when everybody is selling the best and the brightest make their money when nobody else wants it. >> you are a co-carnage guy. >> one tweet crossing right now. the three six six guy making a lot of sense on cnbc. >> what about kefb's argument at the top of the hour. all the positive externalities that come from these prices. consumer, airlines, transportation. >> i think what we're seeing right now on post nine and the marketplace around us is repricing the handles from a 70 to a 60 to a 50.

so you are having the macroeconomic effect. but that is giving the positive, if you have the money saved, i say all the time, buy only what you know and save some money to buy when it's cheaper. this is one of those opportunities. >> we're talking about oil and not talking about natural gas. that's also particularly low. isn't that also good given how cold it is getting and given the expectations for the holiday season. is the market ignoring that? >> supply demand, the natural gas has been a monster to trade. and i'd be very cautious about putting a non professionals money to work in the natural gas area. >> impact on the consumer i'm saying. >> is pse and g willing to pass on that benefit to the person burning natural gas as opposed to now they can buy heating oil for less than diesel as you

drive down the road. >> ben, thanks for coming to the post. when we come back, continuing to keep an eye on the markets. the dow continues to be down right around 200 point. first rick, what are you watching today? >> it's time. i have to way in on the oil discussion. from a technical standpoint and from an alternative interpretation of another variable at work drawing crude prices lower. and i think you will find both of them fascinating. after the break. y'know what my business philosophy is, reynolds? >>no. not exactly. to attain success, one must project success. that's why we use fedex one rate®. >>their flat rate shipping. exactly. it makes us look top-notch but we know it's affordable. (garage door opening) (sighs) honey, haven't i asked you to please use the.... >>we don't have a reception entrance.

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supports your heart and body so you stay active and strong. ensure, take life in. coming up, will falling crude crush hope of a rally into the end of the year? wall street's biggest bull tony dwyer joins us. and an exclusive interview with the ceo of cheniere on how low oil be go. and is coach poised for an acquisition. jon najarian found out some unusual at this time yerd. >> oil and leather. i like it. to the cme group and rick santelli. >> thanks jon. well, if we want to consider all the issues that were number one topics of discussion over the last several years i would tell you one of the biggest

conversations was the hunt for yield. everybody was talking about it. you know, you create a lot of liquidity and it is going to go somewhere. a lot of it went on balance sheets. a lot was leveraged by the too big to fail banks the hedge jis, the algo guys. goosy markets yields in southern european economies, or junk. they were really tight, the actual spreads and the discussions for a lot like the ones in late 06. everybody as air ware they were not sustainable. speaking about focus, friend of cnbc, good friend, jack ablin with bmo private bank supplied us the following chart. this chart is very important. natural gas priced in barrels.

they used a conversion of 6.3. what you see is that those lines really should start to get closer. this is the markets smarter. the aggregate personality of all the players and all the prices and all the trades. some may be totally free markets some not so much. think cartels but the dynamic of this chart really gets over looked. the second thing i want to talk about is technicals in general. really look at this chart. see it? all right now we're going to come to mine. it isn't as pretty. but most of the times technicians avoid half of the most important part. they look it a price but they fail to look another time. time is hugely important. 145 is the big high in 08. that took five months to develop. when it broke under a a hundred, was july 22nd.

-- half the difference is 5550. my call is this is going to be a number to watch. and i think this move ends five months after it started right before christmas. >> we're going to remember that white board. we'll come back the o you later. still watching the markets of course, dow down about 205. "squawk alley" continues in a moment. at optionsxpress by charles schwab. and we'll give you a one hundred fifty dollar amazon.com gift card when you open an account. if you're looking for a trade idea, start at the idea hub... where options and futures opportunities are organized by volatility, earnings, market activity and income strategies. then run your new idea through the trade and probability calculator to get a quick look at the possible upside and downside. streaming charts give you the real-time quotes and customized views of the market that can help you make your final decision. and when you're ready to make it happen, walk limit helps you save time by searching for the most favorable price.

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bob pisani on the floor, we'll begin with you. >> important thing is more than lower oil prices going on. here colliding a little with the slower global growth story. at one point all ten sectors of the s&p were on the downside l material, financials, energy. materials and financials are performing worse than energy. energy gets the play i know but that is the slower growth story globally. dow chemical, eastman chemical. freeport, dupont. those all down much more than

the market, that's the slower growth story. utility stocks. telecom stocks. all on the downside and that is a major issue as well. defense names also a bit slow here. northr northrup grumman. general dynamics. lockheed martin. even the aerospace side of things effecting things as well. major names breaking down. ibm was traced just around the corner from here is on the downside. i want to mention ibm breaking down, down about 3%. once you move past about 160 or so the stock started moving down. finally i want to mention the high yield market. we're seeing and there is ibm. we dropped below 106.

and jnk the high yield market. this is the high yield etfs, a two year low again. a good part of those high yield bonds are in the energy sectors. specifically the fracking sector. the high yield etf is a new two year low. a lot of people trying to pick bottoms. just in the last segment there was a lot of discussion about when was the right time to buy that. apparently a lot of people don't feel it's now. >> picking bottom is a tricky business. let's get to jackie at the nymex. >> really remarkable action in crude oil today. dipping under 58 dollars a barrel. we're about 4% lower on the day. traders told me this can happen. when the technical pressure mounts we see selling and fast. especially closing a week. $55 is the next critical support level to watch but traders are say we may not get there today. they were looking aggregate

janua -- looking at january de1st as a deadline. what this israeli really is the and oil feeding off each other in terms of sentiment. demand forecast, opec cutting demand forecasts the other day and of course looking a global growth and saying look if the equity market is saying things are going lower from here, global growth, there is really nothing left to lift crude higher. we're looking at $50 crude by next year and some telling me 40 by the summer. >> bertha coombs is at the nasdaq. >> it's the best house in a bad neighborhood today. adobe at a knew high. unfortunately that is only

adding about four points of upside. some of the big caps are getting sold off on those concerns of a bit of a slow down and some have also just done very well. apple down about 4% more the week. the nasdaq 100 overall though not o down as much. and in fact the smallest decline of the major indexes these week. a real reason for that. biotechs continue to be strong. today they are just fractionally higher and for the week they are the only ones put in any sort of increase as that group. and we also see the positive side of those lower gasoline prices from that oil pull back when you look at the retail names. they have had a spectacular week. staples of course is in play in terms of the activist investors but with that consumer number today guys we are seeing the retailers today really outperforming. back to you. >> all right thank you for that. carl, i think i could start impersonating you on the phone

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some stunning numbers today. s&p down. crude has gotten to 54. that is the low on the day. and the ten year. >> i always watch the ten year. i would rook at this way. next week will really start to slow down because people who manage money are going to start to think about the holiday. and you are locking profits for the year.

that's why we're seeing a little out of the selling going on. what's setting up for interesting q 2 and 3. q 1 is the gestation period for low oil prices to rip through about 7 to 8 sectorings of the s&p. so if you position by getting long again, not energy but everybody else, i think you are going to really like the outcome next year. i'm bullish on equities because of oil. >> good the to see you kevin. lest get to the halftime and the judge. welcome to the halftime show. let's meet our starting lineup for today. jim laic j jim, and jon and pete