is talking about "the interview." " squawk box" begins right now. good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernan and andrew ross-sorkin. for millions of americans, you are shopping and traveling. but two storms are threatening to bring heavy know to parts of the country. we'll have a forecast from our friends at the weather channel in a few minutes. and december is traditionally a strong time for stocks and this year looks to follow that trend. in the last ten years the s&p has closed higher 80% of the time with the final two weeks tending to be strong with an average return of nearly 2%. it's a holiday shortened week but there's no shortage of economic data to digest. today we get existing home sales. then tomorrow it's durable goods. the final revision of the third

quarter gdp, personal income and spending, new home sales and consumer sentiment. on wednesday, weekly jobless claims will get here a day early because of the holiday. a big part of the story on the markets and the economy, oil with the latest lumberg survey showing gas prices dropping to the lowest level since may of 2009. the national average for a gallon of regular unleaded is at $2.47. and andrew, welcome back. >> thank you, becky. it sounds like nothing happened last week. it was kind of boring? what happened to the market in cuba? >> and russia. >> and then the whole -- i don't know, i feel like -- a lot happened. anyway, we'll tell you what is going on in corporate news. the price over a new hepatitis c drug expressing its largest plan is now going to be offered for treatment with patients that have the most common form of the virus. starting in january it will exclude drugs from gilead and johnson & johnson. meg terrell is going to join us

with that story next half hour. and ocwen's executive chairman is going to step down. the firm is accused of hurting hundreds of thousands of borrowers by sending back-dated letters about foreclosures. and ceasars palace is trying to buy their affiliate of wsj. it would file for chapter 11 bankruptcy protection by mid-january to cut the mounting debt. joe, i don't know if you follow this, but paul singer at elliott manager was hoping to file by last week friday. he had all the cvs protection to pay off in a big way. i think they'll make a small portion of that back.

all right. usually they only have it for a little while and then, you know, then they get a better name. it sounds like it's native american or something. it is just spelled backwords. how about jeritol spelled backwards? it means nothing. a number of headlines on oil this morning, which is opec's secretary general hoping to see a recovery in the price of crude by the second half of next year. saudi arabia's minister of oil

says he calls the lack of non-opec producers cooperating. he hopes it will help energy demand arguing the arab states will escape most of the damage. they are urging all producers not to raise output next year saying this will quickly steady prices. oil prices this morning as you can see look high to me, almost at $58 a share. >> wait a second, now the uae is trying to get all the world to be part of opec saying everybody opec and everybody else including the united states will all agree not to raise output? >> this is interesting to watch. i don't know whether i -- did they do it to put fracking out of business or did they slowly lose control as more came online here? and then they were like, whoa. >> and we need a bigger cartel.

>> i hope it's a seat change. >> it's sort of a splintered cartel. >> yeah. >> let's hope it stays that way. >> if you want it to be an effective cartel, get the united states involved, too. >> how did they stay involved so long? opec, really it's been most of my adult life we have been talking about opec. since 1975 -- kind of. kind of. i was just going to college. so yeah, but it had -- they had their hands around our neck for a long time and it feels good. it's a long national nightmare. it would be nice to break it for a bit. for that part of the world not to have such a huge influence on our future. let's check on the broader markets this morning. it was a great week for the markets last week with the dow up 3% and the s&p up by 2.4%. it's a pretty volatile week with things starting off with a rough start at the beginning of the

week with concerns on the rouble and oil. you can see this morning the green arrows, that trend continues with the dow futures indicating up another 80 point this is morning and the s&p futures up ten points by the nasdaq up by 20. you're watching what's happening in europe this morning, also green arrow there is with the biggest gainer the cac in france. strong gapes from the ftse and germany dax as well. at one point shanghai was up 1%. hang seng is up by 1.25%. the nikkei was up just slightly. the ten-year note back here in the united states looks at this point like it is yielding 2.174%. so that is below 2.1%. and if you check out the currency market, the rouble is there at the bottom. the rouble seems to have stabilized in a big way trading at 56 to the dollar.

the dollar is up against the yen at 119.8. euro trading at 1.2264. >> and when the market is up most of the year, this is what you usually expect. and that is people that haven't matched it, which is a lot of money managers that cannot match the indices. >> and they are charging 2 and 20. >> and then they try to get into the winners toward the end of the year. and then -- >> then the winners go away. >> and for the next year, everything -- the air comes out right away. >> but do you expect january 5th this will be -- >> it says here it deepened the fear of the early 2015 slump. you have seen it happen before, but it's usually after a really good year and then the next january might be hard, but we need january to be good for 2015. let's see what the people think.

three days before santa comes but he's spreading the joy on the dow adding 3% last week. they lost 4% the week before. lindsay is a chief economist and tom manning is chief investment officer of bp wealth management. so lindsay, does this usually indicate that we opened soft in 2015 when everybody chases the market at the end of the year? >> well, i certainly think the fed is sending a favorable message. you remember last week on the one hand they reiterated their commitment to accommodation. but on the other hand they suggested that the u.s. economy is on slightly firmer footing turning the corner to 2015. still boosting the optimism suggesting the later markets specifically were eating through some of the outstanding slack that has been plaguing the u.s. recovery for quite some time. so a very favorable outlook presented to the markets, something they continue to boost with expectations. >> i guess since you are chief

economist, the first words out of your mouth were the fed again. so the fed is really still. that's the first thing you talk about, not only prices or other favorable factors. it's still the fed even though they just said we'll be patient. >> i think it is. now, certainly oil prices play into monetary policy as chair yellen noted we still have a net importer of oil. so she does suspect lower oil prices will continue to boost economic growth here in the u.s. on net. but the number one story driving the market at this time is the fact that monetary policy will remain accommodative well into 2015. as we assure ourselves that the u.s. economy is on strong enough footing to withstand eventual higher rates. >> just like opec. a cartel, i could -- i wish they would just -- i almost feel the same way of the fed at this point. the fed has been in our lives for six -- >> the same categories.

>> the cartel, they don't know what they are doing controlling our lives and think it is all about them, but it's not. it's about the private sector, tom. i'm ready to take the training wheels off. did we have the fed 50 years ago in every part of our life? >> well, i would have to agree that the fed right now is anything -- the only thing everyone is thinking about is the juice behind the market. they will continue to be the juice behind the market. i do think, though, however going into the new year that the resiliency of the market is going to be tested. we haven't had the type of pull-back that one might have expected in a normal market environment. largely because of the fed. i do think that sometime in the early part of next year we're going to get that correction that everyone has been waiting for, more than just a few percent. but the year, as we progress, we'll wind up with higher returns. but that first quarter i was a little concerned about. >> well, will the fed if there is a correction, do you expect

them not to -- every time we get any type of market turmoil it seems like they think the illness is on them to talk the market up or to say we're not going to get out that quickly. i mean, if we had a real problem economic wise and marketwise, they would do another round of qe if they could. they still think it is all on them, don't they? >> they are still involved but i think that 2015 is the year that not only do they take the foot off the brake, but they actually -- excuse me, take the foot off the gas but put the foot on the brake to a certain extent. >> once they do the first rate increase, eventually we'll get back to what is more normal. >> i think so. >> we could eventually get back to -- >> go ahead, lindsay. what? >> i was going to say eventually we'll get back to a state of normalcy but the question is how long. now again, going back to last week's fed statement and press conference, janet yellen was

clear they are not reverting back to the 25-basis point increase that we saw in the early 2000s. it is likely after the first rate increase we could wait two, maybe three meetings. so the progression back to 3.5% to 4% fed funds rate could take years. >> i just want to know, if you're convinced of this, does that mean you just don't -- you wouldn't put any money in the market right now? you're just waiting for the correction? or if you think the end of 2015 will be so much higher, you don't really care? >> you've got to think about the long-term. i think if you're waiting for that correction in the first quarter, if it doesn't happen, then you're obviously going to be weighing for quite a period of time to be able to put the money to, with. we do think that 2015 will be a year of higher returns. i'm just a little concerned here in the first quarter. if you have money and are sitting on the sidelines, you may want to take it with a slow approach lasting until the end of the year. there should be softness to get the dollars in the market.

>> if things sell-off. are you looking for 5% to 10% quarter when you tell people to jump in? >> i actually think we'll see a 10% number here at some point. it's been quite some time since that's happened. you have noticed here in the last few months the market has gotten skittish and we have come here near 10%. i think we hit it intraday in october. i think we may see that for more than a couple of days but eventually the market is going to start to move higher once again. >> thank you, lindsay and tom. appreciate it. a big piece in the journal day, the whole reason for the saudi and opec decision to try to hurt our tail. that guy just said we had nothing to do with it. >> he just suspected all along. >> it is not very nice to say. >> i just said she could do it. >> cuomo is smart because new york never has to worry about

losing jobs because they won't add any from friday, right? >> that's what he was thinking. >> thinking ahead. actually, he was like, you know, totally washed his hands of the home issue that we -- >> i missed it. >> did you really? >> i didn't read the note. i heard about cuba daily. >> that's immediately what i thought of was cuba. >> why? >> another place to get a 0.001% rate for vacation -- >> i don't know if i've been to cuba. >> this time now that you're back you can tell the viewers that the eastern rivera of mexico is where it was. >> now what would you tell people? >> well, we don't want people -- we don't want to get mobbed. we have a lot going on with

two storms threatening to disrupt holiday travel this week. carson is joining us from the weather channel here. we need to play that d.c. top. there we go. ♪ >> good morning, guys. >> we're betting now. >> i got a comment from the producer about my button being unbuttoned. stylistically, we are okay. >> who said that? >> that's a great question. someone told me in my ear. i just get heckled by different voices and don't know who they are. >> that guy department know what he was talking about. >> it was a woman. >> that explains it then. because this is a man's style. >> okay. i was like, i don't want to touch that one. i'm going to do some weather and we can make fun of me on the backside again. we'll talk about what's going on here. we have a storm system here. we have two storms coming together. it will be really messy across the east in the next couple of

days. not the winter wonderland stuff, but a rainmaker with a dip in the jet stream with a lot of moisture up the eastern seaboard. this is an inside runner with the storm to the west with warm air on the side of it. showers today getting into washington, getting into new york by later tonight. tomorrow this first impulse is again rain. it's the mountains of new england. the only place that sees any snow. look at this christmas eve forecast. not only rain, very windy and maybe some thunderstorms. then christmas day showers in new york, rain in boston and through new england and a little bit of snow here terrain driven into parts of west virginia. in addition to it being rainy, it will be very windy on christmas eve day and through christmas eve itself. new york city, washington, d.c., down in to raleigh, up to boston, winds of 30-plus miles an hour. it looks like through southern new england we could see winds up to 40 to 50 miles an hour. so it's going to be a nasty, nasty day. of course, a big travel day there so we are concerned about

the travel delays. we could only predict of course what the weather is impacted to do with travel. we could have other issues with the volume of what happens on wednesday. i do think we'll see delays in new york, philly, d.c. and cincinnati. i wish i had better news for you. anyone would take snow instead of the rain but that's what we've got. >> oh, grinch. have you ever worn a vest before? i feel like you're dressing for us now? maybe that's me being too -- >> let's not flatter ourselves. but the vest is something that i wore when i first got here, but i think i was coming in too hot with it and it was too much, and i put it on the sideline and now i'm -- >> now i feel like you're stepping out for me even if you're not. >> see, i thought he was dressing for me. >> see, we are all the self-centered -- me, me, me. >> you were here last week. >> was he wearing the -- splendor last week.

>> you screwed me up a couple times last week. i don't know if i was on, was i? >> we had a couple -- yes, we had busy "newsday"s bnews days. >> even if you claim you weren't dressing for us, you are. >> boxers or briefs, kid? >> that was not me asking. >> don't answer that, boxers or briefs? >> combo. sony might release "the interview. " /* /- quts and michelle caruso-cabrera is back to share pictures and stories with us. and what the companies in the u.s. are doing to help protect themselves of a security breach. "squawk box" will be right back.

welcome back. this week we are looking ahead to the playbook playing our predictions for media companies, but before we do that, we'll see how she fared in her picks for this year. julia predicted that the cable industry would see consolidation in 2014 and ding, ding, ding, she was right on that count. comcast going after time warner cable and at&t making that bid for directv. she was also predicting more

convergence in tech and media. right again with hbo announcing an over-the-top service and amazon extending their original content. and julia also said the film starring superheroes would dominate the box office with not much more of anything else. we'll give you a ring for that, 3 for 3. franchising to eight of the top ten spots at the domestic box office in 2014. so what is julia predicting for 2015? here's a look. old media will give itself a new look in 2015 as it embraces digital content and delivery. first for tv, that means more streaming options and more cord-cutting. in addition to hbo, shotime and cbs launching over-the-top services, look for amc to jump on the bandwagon. easy access to streaming video will send cable subscribers

plummeting putting pressure on broadcasters to pay more for sports and live events to keep customers. then the death of the 30-second spot. as we move from traditional tv to streaming, marketers look to grow the roi from ad investments from taking 30-second spots across platforms while native advertising, subtle content will become more prevalent making it harder to tell when marketers sponsor video. and third, get ready for more m&a as media giants buy startups to bolster their presence. following in the footsteps of disney's maker studios, they will embrace youtube stars to better compete. and look for more consolidation among cable channels as everyone from stars to amc look for more leverage to negotiate with distributors. >> and there we have the playbook. so this is the question, this is a little more negative than your

2014 predictions. your 2014 predictions had a positive i thitinge to them. the nba madness, the idea of what happens to the 30-second commercial and the broadcasters -- >> it depends where you are sitting. if you are on youtube or the dimmal side. >> but so far, so far in media everybody is warm meaning nobody has lost as a result of the new form factors. the question is when that begins. >> we have seen a shift. it's all about the shift and i think what is happening is the media conglomerates become more digital so they will not lose. we'll see negativity in the fourth quarter. even in the third quarter as we see the rise of digital viewing really start to eat into tv ratings and also tv ad revenue. that's starting to have an impact now. and i think my negative prediction for next year is i think the introduction of the new streaming services, like a stand-alone hbo service, cbs already has one and a showtime

service, those will start to eat into the cable subscribers. >> are we always going to be trading in analog dollars for digital pennies or dimes? >> not necessarily. i think that's why you have like an acquisition of disney's maker studios. you have all the media giants going more towards dimmal. bob egger said we know advertising is shifting more away from broadcast to digital because part of that shift is for themselves. one of the reasons cbs launched the own digital streaming service is to charge for that and bring ads in with it. >> stay with us. we'll bring in david here, digital pennies or nickels or whatever it is, it seems to me everyone is moving digitally, and that's a good thing, but it is a lower margin business generally speaking. >> i thought julia's theme attics were interesting but i

see something far less dramatic than i think she describes. what really stuck in my mind is the term cable subscribers plummeting. so i think cbs offering a $5.99 product for cbs all access or hbo product for -- we don't know what it will be but probably priced similarly at the retail level to what it is on cable, we don't see those things driving the plummeting of cable subscriptions. if anything, on stand-alone basis, they show the value of the bundle at $60 or $70. i think what happens this year, though, is this is the year the cord gets more options. while we don't see a plummeting, we might actually start to see some cord-cutting. the advertising question, i'm sorry, the advertising is a different question if you want to talk about that. sorry. >> david, you cover all sorts of stocks, who is the big winner in all of that and who are the losers if there are some? >> well, to me content, there's

one constant in all of this. content is absolutely king. and so -- and i think to me, the winner is the guy who owns the most content and is the clearest play on content. the clearest single pure play. and in big cap, close to that on tv, which is what the digital services what. marginal in theatrical, that's cbs. that's how we look at that. we also think that if you look to an unbundled word, if you start busting the bundle apart, there's only one structurally undercompensated area and that's the broadcast networks. so we think cbs has a lot of upside for that. >> and the loser just now? >> i think the losers are going to be the more document drama oriented, less scripted cable guys. you know, the scripts, the discoveries, we see them less showing up on amazon and netflix. getting a little more

marginalized. >> the stocks have -- i've watched those and wondered what happened to those stocks. even discovery, that was the darling and suddenly it is off i don't know how many percent. and listening to it, i'm not an early adaptor, i admit that, but in my early experience, i don't know how it could get better. i know how to use netflix and the universal remote to go to the apps on the big 75-inch screen. so i can go that, but everything else i have on just regular -- i wouldn't change anything. i'm not going over the -- what is it called? i'm not doing that. i have everything i need. >> you're not going anywhere. >> i have nine of them. >> but the people have never -- that's what david just said, the never -- the cord-nevers. >> david pointed this out. it is remarkable we have not seen a dramatic drop in cable subscriptions considering all

the other options, but next year is when we could start to see that because of the proliferation of new options and because the cord-nevers are starting to be a bigger piece of the pie. >> before we let either of you go, we have to talk about sony for a second. just tell what you say you think is happening with this movie "the interview." >> the question is about the distribution of it. the cfo of sony said we want to get this out there. there's a report they are definitely putting it on crackle, which is sony's video streaming service. my sources tell me nothing is definitively decided. crackle is an option. it's very convenient that sony has a streaming video platform. but it seems they would like to get another company on board. and netflix and itunes and amazon. they wouldn't put it that way, but it certainly would help spread the risk and also maybe one would be a vod platform to sell it. >> netflix or somebody, if they

want to touch this, given nobody wanted to support it last week. >> they all give me the equivalent of no comment. netflix says we are approached by the studios about an interesting up innovative situation. what about our parent company comcast? no one is partnering with them but sony would like someone else on board. >> david, is there any financial ramification long-term on hollywood and broadway? >> i'm glad you asked this question. that's $40 million movie. it is not like "avatar" and how are you going to release it? the reality is compression in windows across the board. marketing budgets are now starting to being agnostic between windows and sin that in releases and dvd releases. so i don't think this is a -- i think it will be interesting to see what happens, but i don't think there are huge financial

ramifications. >> it's about whether amy pasqal keeps her job. >> i think it is about whether hollywood is willing to take risks and take on some of the things or start sub-censoring. that would be my guess. >> i think it is likely sony could distribute this for free and give it away. they are going to take a loss on the movie no matter what, but this is far beyond the amount of money sony is losing on this film. >> the president says he wishes they would have called him first. so is he going to intervene now and do it on video on demand? >> sony said they did have a conversation about it. so there's a lot of back and forth there. >> and david said there was silence for no weeks. nobody would help us while they were attacking us. >> the president's comments could inspire another company to get on board as well. we'll see. >> david, julia, thank you. coming up, how the nation's largest pharmacy benefit manager could be fuelling a drug price war. plus, a historic change as u.s. and cuban relations begin to thaw. we'll have a report on the story

firsthand. we'll be joined with details of michelle carusa cabrera's travels and whether she brought us all cigars or one for bill clinton when "squawk box" comes right back. stay with us. act i. scene 3.

open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound)

isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm. express scripps is making an exclusive hepatitis c deal shunning gilead and johnson & johnson. the biotech reporter is joining us with more.

is this a new way of doing business? it hasn't been done in the past. >> express scripps is calling this up precedented with controversy over the drug that is cost $84,000 and $94,500 for the first week of treatment. so this drug was $1,000 a day. and because they are easier to take and cue more hepatitis patients, a lot more patients came aboard to get treated. so gilead brought in $8 billion for this year in the market. express scripps is the biggest pharmaceutical manufacturer in the united states, this new drug just got approved on friday and they have a significant discount to get a deal on the formulary. many will be able to get this drug that is covered and express

drugs is covering this from johnson and johnson in this formulary. this is a really new thing and express scripps is the loudest voice here against the price of these drugs. but the question, is will this start to happen more and hepatitis c is one of the main drugs in the price wars, but are they going after rheumatoid arthritis now and diabetes and cancer drugs. >> what happens to the development? does it put a freeze on development because companies are afraid they won't be reimbursed for the hard work put into drugs? >> of course what we heard from gilead it is helping to bring $8 in revenue and people say is that too much. but down the road, the potential things that could have cost a lot of money are a lot of

payments down upfront. >> how do you read it, a good or bad move or we'll wait to see what happens? >> i think people think it's bad for the biotech. there's a question on whether drugmakers will start to compete against one another. it's always the insurance policy company versus the drugmakers. now it's the drugmaker against o one. >> hepatitis c, there are so many companies vying for a position there. because it's a treatable condition. there are so many many-to drugs. >> it's a really good question to the point we have made. this regiment is four to six pills a day and take them at different times with meals.

express scripps takes you when to take the bill. >> when i watch the nightly news, and one of the reasons i don't like to watch it that much is because i have to listen to the -- there's a commercial where a woman takes four pills a day and her friend says, you only have to take two. and then she's like, really? >> it can be kind of difficult to remember when to take them. >> then it's the effectiveness of the cure if you don't take them properly. >> will you come back to do a segment on the commercials? >> i had a push-back on how much time to spend on all the side effects. >> god almighty, unbelievable. >> i watch a lot of the news with my father.

it's up comfortable. >> you're probably going to want to -- >> the side effects they have to list are not only caused by the drugs. there are things people get in a clinical trial whether or not they are caused by a drug. you get a headache and it is put in there. >> we need to hear it. thank you. when we come back, a first interview of u.s./cuba relations. and a cyber firm protecting nearly half of the fortune 500. and we'll have veteran predictions from bob dahl. "squawk box" will be right back. 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. life takes energy. energy lives here.

and michelle caruso-cabrera is just returning from overseas. >> things are better today than they were a year ago. better than two years ago. way better than 15 years ago. when you got on a plane 15 years ago, people were, i don't want to say starving, but they are thing, thin, thin, thin. they were gray. when you arrive, people are overweight and the right color. that's an improvement. what's happened? exiles can travel back and forth more and bring more money and stuff. there's much more of a consumer economy. and also there have been some tiny transformative free market reforms that they never called free market reforeims.

transportation has improved in the last year. why is that? i said there's a special place in heaven for cubans waiting to ride the bus because it was so brutal with people jammed in there. now there's a lot more cars, taxis and buses on the roads. a couple things happened. first of all, they started cooperatives where they said transportation is so bad, they told workers in the transportation sector, the government is not going to own the company anymore. you do want you want to do, give half the money to us and keep half the money. so now there's more incentive to get the bus back on the road. they also bought chinese buses according to people living there. and we'll show you -- you can't do a cuba story without old cars. they have allowed people to retrofit the american cars from the '40s shaped like almonds. this guy is selling his for $3,500, he hopes. they will retrofit these for diesel to be much cheaper and

easier on the black market. so they get them on the road and allow more taxi licenses to cop vert them to taxis. then they allow the buying and selling of used cars. this is a '48 chevy. it is bolted and bonded in so many places, it is just crazy. there's a lot more food -- oh, look, this car is also for sale. it's a brand new car, 2009. the long story about it, the family brought it in from spain. that knee zap from 2009, she's trying to sell for $80,000. >> wow! >> that would not be true value but scarcity value because there's so few new cars. remember, it's a 2009. >> how long is it going to take to see a real shift in terms of the color -- >> it is a time what wearp.

>> the article i read over the vacation, people in cap da travel there because they claim it's going to lose its time capsule. >> they would love for people to live without infrastructure and crumbling walls. some people said it's great to live without internet for a a life. >> now i go there to -- >> i would love for all young people to go there to see what it is like. >> i think raul castro will say, we're sticking with it. >> then on saturday. >> sticking with it. looking good, working well. >> the markets can do things foreign diplomats and world leaders can't. we saw this happen last week with the rouble and an about-face. that broughttous a position that couldn't -- >> sure.

the obama administration feels by lightning night the -- >> is there more than 1% down there? >> yes, musicians and artists and athletes who for whatever reason, back in the '60s, got the exemption. they can keep their revenue. >> equal outcomes, it just doesn't look that great when everyone is equal down here. >> when the richest people get to -- >> it seems really fair. you don't want to feel bad about yourself. >> uber, there's enough to deal with today. at least its equal. i was just getting ready to look for corporate thwith that.

we'll talk to the firm charged with keeping nearly half the forcheck up 500 safe. we'll do that right after the break. we'll be back. [ male announcer ] your love for trading never stops.

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for around $329 a month. hurry in. offer ends soon. everyone is vulnerable. that is the clear message to corporate america following the massive cyber attack on sony. joining us right now is the ceo of cyber arc. the company helps firms fight

cyber attacks. it has about 35% of the fortune 500 as clients. some of the notable big names include southwest airlines, conagra foods. thank you for being here today. >> pleasure. good morning. >> are we that much more in peril that any of us realized? how easy is it to do something like this? >> if hackers keep at it, they'll open the door and get in. i think that's the new realization organizations are waking up to today. >> we heard sony was in a poor position, they did not do things to keep things safe. are they in the minority or is that common place in corporate america right now? >> i would say that's common place in corporate america and elsewhere around the world. organizations have been focused on security perimeter. that was the focus on the security practice. and not about what happens is when the attackers do get in. and the soft part of the

enterprise has been out there for everyone. they have been soft on the inside. >> when you come into an organization, do you change things drastically with the companies using you or could this happen to companies you're protecting too? >> what cyberark does is we add a security layer on the inside to make sure that even if the organization was breached, they can't move around and get to the sensitive information. it's a whole new layer on the inside. >> my guess is it would be this is a situation where corporations really have to start investing and have to have people who are reporting directly to the ceo or board to make sure these things are being taken care of. every hack we've heard, there were warning sign it is along the way. whether you're looking back at target who should have known something was going on or other retailers hacked along the way. what do you really think? are we able to do something that

we make ourselves that much stronger or is this just a way of life and something we need to get used to? >> first of all, i agree with you. this is becoming a board level topic. and we're seeing it within the top enterprises. are we protected on the inside? what happens after we're breached? there is a change. this is again after 20 years where the approach was put up a fire wall and keep the bad guys out. the boards are asking good questions. i think as a matter of looking into the future, the pendulum has swung toward the bad guys because of many years of neglect. but it doesn't mean all gloom and doom with proper verinvestm they can make this. >> president obama speaking over the weekend said this was cyber vandalism. how would you qualify it? >> well, i think it's actually similar to other attacks that -- and sophisticated attacks you

mentioned. the difference in this one is that the intent was really to cause damage and really bring a company down to its knees. but in other attacks, if the intent is to steal credit cards, steal intellectual property, they operate the same. they move around on the inside and try to get strong access and steal information. this time around it was really to bring the organization down. and that's what smells like vandalism. >> all right, udi. thank you. >> pleasure to be here. thank you. coming up, futures pointing to another higher open. santa clause is coming to wall street. the bulls wish list when "squawk box" comes right back.

the dow gained 3% last week renewing hopes for a santa claus rally. >> santa's coming. >> santa! oh my god! >> what you need to know about stocks. oil and the dollar before the market opens. caterpillar stock down in the last six months. the ceo on the company's performance and the slide in oil prices. and it's make or break time for retailers. >> you disgust me. how do you live with yourself? >> cool it, zippy. >> you sit on a throne of lies. >> with three shopping days left, how their shaping up. >> i think you're going to have a good christmas. >> you smell like beef and cheese. you don't smell like santa. >> the second hour of "squawk box" begins right now. ♪

welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. it's crunch time for shippers. u.p.s. expects to deliver 34 million packages today. 34. that would be an all-time record for the company. it's double the volume of a typical day. i know his kids, i ask how they're doing. we're like, you know, we see eep other three or four times a day. we're going to talk last-minute shipping in just about ten minutes. it's a combination of more things going from the net and just maybe better economic times, more stuff being bought. >> i think the biggest thing is this is the holiday that i've done almost all of my shopping online. i haven't been to a mall.

i haven't set foot in one. this is -- everything's coming to me. >> well, it's hard -- you know, there's a lot of people going to the malls because there's no parking spaces. >> i drove by a mall the other day and couldn't believe it. i thought there would be more parking as a result. >> no. . it's rough. >> and amazon's now shipping within an hour in new york city. >> have you used that yet? >> no today i plan on doing it. if you're a prime customer, they'll get you the stuff in an hour. it's craziness. let's talk about some of the top stories at this hour. the big one, gasoline prices dropping to the lowest level since may of 2009. that's according to the latest lundberg survey. national average now for a gallon of regular unleaded stands at $2.47. also sony planning to release the controversial comedy of "the interview." that's what they say on a streaming service. reporting sony hasn't made a decision yet about where to release that film.

now, meantime, north korea denying it breached sony and warning of consequences if the u.s. takes action. and javers is going to join us with more on that story. it's a three inform day trading week, but we have plenty of data to keep us busy. here's what's happening on the schedule. 10:00 a.m. eastern time today, we're going to get existing home sales. tomorrow a flood of data including durable goods, the second revision of third quarter gdp, and new home sales. weekly jobless claims going to come out on wednesday this week. also u.s. stock markets close at 1:00 p.m. eastern time on wednesday for christmas eve and remain closed all day thursday. trading resumes on friday. then we do it all again next week. stocks coming off a week of big gains, but will they keep momentum? our guest host is bob dahl. he's senior portfolio manager at nuvene asset management.

it's been a heck of a couple of weeks. what should we think is the real market? was it the swan dive we saw a couple weeks ago or the santa claus rally? >> i think what we're seeing is don't expect it to be just monolithic up. it's going ton bumpy. we forgot markets are typically volatile. >> yes, we did. >> or like in october, should i jump out the window today? after the market goes up in five years. i think we're going to have more volatility. the economy is getting better. you talked about energy prices. on balance, that's positive. i think the slow growth overseas is good news for the u.s. >> why? because it makes us look like a better neighborhood? >> there's that. but it keeps interest rates low. it keeps commodity prices low. that more than offsets the weakness that comes because we can't export more. i think the weakness overseas a good news. >> when you look at oil prices,

you say i'm balanced. you think that's great news too. but you sound a little guarded. >> it's clearly a negative for the oil patch which has been on fire here in the u.s. and other parts of the world. and that's all going to slow. the overwhelming positive, lower gasoline prices as you reported and the benefit to manufacturers and airlines and so on. the wild card is does the repeatty cause a financial problem? we don't know the answer to that. it happens so fast i can't believe we're going to get through this without bumps along the way. >> we've been talking about that this morning. just the bumps along the way, the return of volatility. you've got people chasing returns at the end of the year. but sometimes that can lead to a messy january. do you worry about that too? >> i sure do. last year -- look at last year. we had that big run at the end of the year. some were saying we borrowed some from 2014.

maybe we're doing that again. of course last january toward the end of the month we had that nasty 7% decline from which we recovered. and i think we'll recover again. but i think it gets bumpier. remember, liquidity, tons of it from everywhere was part of what kept the market being less volatile. there's nothing like liquidity to keep things moving to the upside. slowly but surely starting with the fed and the uk, we're removing that liquidity. and that's going to create a more normal set of volatility. >> haven't actually removed anything yet. we're just stuck putting in, right? >> well said. so less gas pedal. >> you think the fed is really signaling it's going to move in the middle of next year? that it's going to rauz rates maybe come june? >> i think they are. all kinds of cross with the oil price and the meetings last week. all that good stuff. but, look.

we have nominal gdp in the united states approaching 5%. 3% real and almost 2% inflation. that's not consistent with short-term interest rates. we got to zero because we had an emergency. the emergency's passed. and so the fed has to find a path to normalization. yes, they'd like inflation to be closer to. it seems to me the fed will move. >> they are awfully nervous and slow paced how they're doing this. >> we need leadership on the fed. janet yellen has to step up here. they're at a turning point. you have discontinuities and disagreements. when should we move? how should we move? we've got to get going. >> i thought janet yellen was one of the more dovish ones? >> in some sense that's right. and therein lies one of the issues as well. we can't let the fed fall behind the curve.

if you watched the monthly wage numbers you'll know we're beginning to see a little bit of wage inflation. i think we'll see more next year. not enough to be concerned, but enough to say it's not zero real wage gains anymore. it's starting to come in. the job market's picking up. unemployment's moved down. time for the fed to get going in my opinion. >> trying to figure who it would be. i guess if it had been a financial firm, they would have already got margin calls. we would have heard about oil. >> most likely, joe. but some of these things take a bit longer. i'm sure there's a bot of small companies we're going to hear about. that's like a quarterly thing when they go. talking about emerging markets or countries that can't pay the bills. and there's going to be some of them too. >> i would agree. that's going to cause some bumps in the night. >> we saw the ruble. that's where we saw all of the stress sort of manifested because russia is so dependent on oil. then even emerging market, i was

worried about currency there. it doesn't seem it's systemic at this point. >> we may see the ruble get hit again. i'm not convinced we're out of the woods there. >> it's an interesting crisis because we're -- i feel bad for opec and i feel bad for russia. i don't feel bad for either. you know what i mean? it's like, make it hurt even more. >> yes. that's part of the saudis' message. having been the swing producer every time in the past they're saying time-out. we're not lining other people's pockets by shoring up the price. we're going to take care of ourselves. and they're sending a message to the u.s. too. you can produce more, but not so fast. >> can i do caurocodile tears without sounding like clinton? i don't. >> no. >> i need a new -- he's gone. i need a new guy to field. >> that sounds better than being whiney. >> yeah. >> sounds a little more manly. >> really? >> yeah. >> that was manly? >> yeah.

relatively speaking. i'm thinking in terms of a 3-year-old, what they would sound like. >> yeah, a 3-year-old which is what i'm really more like. all right. so, you know, so many good things. and oil is a good thing overall. >> overall when the dust settles this is good news for the u.s. >> how long does it have to last before it's really good news or before we figure that out and it reflects in the stock market? >> i think once we get past the concerns we were talking about. is there a financial disruption? if we get past that, i think good news will filter in. you'll see it in fourth quarter earnings to some degree. >> there's not chance if oil prices jump back up, the good stuff never comes to fruition. >> if we go back to $100. >> bob, thank you for agreeing to spend the morning with us. we'll have more from bob.

he'll be our guest host the rest of the show. >> tim cook finally sent me a christmas card. >> you finally got one from him. >> just now? >> well, it was in my -- have you? >> i got one too. yeah. i did. >> but i opened it, i was expecting a note or something, like a long note. this is what i got. doesn't say anything. you got one too. did he just send it without writing anything in there? >> i think you got a note. >> oh! >> all the best, tim. you're my favorite i think it says right there. no, it doesn't say that. >> have you gotten one? >> i don't know. i might be out of luck. i haven't checked my mailbox. >> we should fess up. i actually wrote that myself. just to drive him a little crazy. >> that way i would have felt bad too if i opened it. >> we should have waited.

he would have been -- oh, yeah. you would have switched to samsung. you would have got a new phone probably. up next -- thank you, though, tim. it's nice. he didn't send out 10,000 of these, did he? maybe. >> maybe. have you sent yours yet? >> you know what? that's right. no. i haven't. mine are in the mail. like that check. it's the final countdown to christmas. details on how super saturday went for retailers. and what last-minute shoppers are bingeing on with just three days to go. plus the ceo of caterpillar. "squawk box" will be right back.

welcome back to "squawk box," everybody. looks like we're in positive territory once again. look at the dow futures ahead of the morning's open. last week the dow finished up 3% for the week. the s&p up by 2.4%. this morning dow up 70 points above fair value. big question this morning. is it too little too late for some customers? we usually see you across the way in a little box somewhere. talking about boxes, who's the winners and losers given we've

got three days now until christmas? >> sure. i'll start out by saying the expectations were so low heading into the holiday season, people thought the consumer wasn't going to come out and shop apparel. and while retailers did plan conservatively were aggressive with the promotions and are seeing more traffic than expected. as far as the winners, shockingly enough, american eagle outfitters. >> people thought it was a lost cause. >> absolutely which is why we're saying shockingly enough we think they are the winner. >> cargo shorts are back? >> actually joggers. lime hammer pants. those are the trend this year. >> you know what i noticed about american eagle? they have a good website. i ordered some stuff off of there too nep retailers who have not done well with the web are probably suffering. >> absolutely. the website and also the mobile as well. everything's online right now on the phone for the kids. and a lot of my retailers have ramped up aggressively. >> does that mean they're -- is

any of the other teen guys winning? is abercrombie anywhere? >> abercrombie has a lot going on elsewhere that people care about than what's given in the stores. abercrombie has a lot more 70% off on top of the already reduced price points. they're struggling a bit more, but longer term we do think they make it through. but as far as what's going on right now in the mall for holiday, we think eagle has the most traffic, the conversion they have in their inventory is well controlled. and they sell what product is working and were able to get it back in quickly. >> tj maxx? >> the checks have been coming back favorably on them. maybe you've seen they're doing the the campaign this year. there's also a treasure hunt experience going on there that we talked about online. but this gets the customer back into the store to see what's going on there. >> okay.

we don't like to be so negative, but who are the losers? >> we don't like to use the term losers, but we'll see those who are potentially struggling a little bit more, for example, gap north america continues to have problems. >> a gap north america meaning gap the gap stores themselves, is it banana's the problem? old navy? all of them. >> old navy is rocking. they did phenomenal last month. it's really core gap stores is struggling. >> so does it ever come back? what has to happen? why has -- it feels like a decade-long -- >> it's one good quarter and one bad quarter, right? >> not really. in the public consciousness gap and banana has been on a steady march wards -- >> and the pe reflects that. >> right. >> i think part of the issue is that gap is no one's first destination when they come to the mall. so you walk by, you see 40% off, 50% off, maybe that entices the customer to come to the store.

but at one time gap was the place you wanted to be. i don't know that they resonate with a particular core customer base anymore. i think they're going too broad and the product wasn't there from a color palate perspective and fashion perspective. >> color palate. what was wrong with it? >> very dark. >> and are the mc hammer pants called that? >> joggers. >> so if we were to put this on our christmas list for our wife to get us -- how do people -- does someone say, listen, we've got to plan a new season for things people don't have. who comes up with the original decision to put such a ridiculous style back into fashion? who would come up with that? and then how does it spread to where other people go, yeah, that's a good idea. people want those. who wants these? >> holy cow.

i'm looking at some of them. >> i haven't gotten one yet. >> would you put it on your list? >> i'm in your camp. i won't. >> double breasted suits are back too. >> people put it on the runway. you see it in a creative approach and then the retailers in the mall try to get it appropriate. >> is that snem. >> there are even pleather ones for you guys. >> it looks like the room there appeals to me there. it looks like they're roomy. >> they're low hangers. >> i don't like -- you know. >> while joe continues to look at that, we're going to get to kate rogers. she joins us with a report on last-minute shopping including maybe what's going on with joggers. >> this weekend on super saturday, shoppers were getting

it done the old school way. they're going to stores rather than shopping online as the clock ticks away to complete their shopping list. analysts we spoke with saw increased traffic at stores. still feeling the sting from last year's delivery debacles. saturday was actually the number one sales day of the year for retailers. raking in as much as $10 billion in sales alone. which are ranked number four and number ten shopping days of the year when it comes to those sales. now, if that forecast is right, it'll be the first time in a decade that super saturday will out-pace black friday's estimates $9.1 billion in sales. black friday has become less of a one-day event. it's sharing sales with thanksgiving day promotions which bring in an estimated $3.2 billion in sales. and if you're wondering who's shopping in these last few days, we're hearing it's mostly men who are procrastinators. they're just getting started on their list making this the home

stretch. time for general stocking stuffer gifts. those will be the most popular in the days leading up to christmas. >> wait a second, guys. have you finished your shopping yet? >> finished is the wrong word. >> started? >> that's today's project. there's a lot of things that need to get done today. >> it's only monday. >> thank you, kate. and thank you, pam. maybe we'll spend some -- you going to buy some joggers? what do you think? >> i want even -- if i'm going to do it -- >> they don't look like mc hammer, tighter. >> it doesn't hang as low but the bottoms of the pants are tighter. >> i want the i dream of jeanie. >> you should start the trend. >> thank you. >> i'm not going to be a slave to fashion. i'm sorry, andrew. you got a double breasted -- i saw that one suit you wore here

that day. that thing -- >> it was a beautiful suit. when we come back this morning, the winner at the weekend box office. here's a hint for you, more bad news for sony as "annie" came in a distant third place. and then doug oberhelman. stick around. "squawk box" will be right back. your 16-year-old daughter studied day and night

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welcome back to "squawk box," everybody. the final installment of "the hobbit" series took the top spot at the box office over the weekend. topping $90 million since its opening last winednesday. coming in second, the final chapter in "the night at the museum" series. and sony's "annie" remake brought in $16.3 million. coming up, the energy effect on construction. the ceo of dow caterpillar will join us next. take a look as the dow is up above fair value.

welcome back to "squawk box," everybody. in our headlines this morning, taiwan says that uber is violating the law by operating without a license. it is investigating possibility of blocking access to the company's mobile app. gasoline prices dropping another 20 cents in the last two weeks to the lowest levels since 2009. the lundberg survey puts the average at $2.47 a gallon. and ocwen financials chairman will step down. this is part of a legal settlement with new york's financial regulator. the firm has been accused of hurting hundreds of thousands of borrowers by sending back dated letters about loan modifications and foreclosures. and check this out. an implosion in texas this weekend. the west end of the texas a&m football stadium brought down as part of a massive renovation project. never gets old looking at images like that. it's a two-year, $450 million

overhaul. construction expected to be done by the start of the 2015 season. there's already a new video score board, the largest in college football. watching the scores go by this morning, it wasn't rutgers but i thought of rutgers. it was the virginia basketball game. 76-27. >> and that reminded you of rutgers and not californolorado year? >> so now you've got that ready. >> i'm ready to play. >> okay, never mind. but harvard was good the last couple of years. aren't you in a bowl? >> yes, we are. >> toilet bowl? >> no. it's the quick lanes bowling. they have changed the names all of these bowls. the blue bonnet bowl is no longer the blue bonnet bowl. the peach bowl is no longer the peach bowl. they've sold the bowls. what did the bowl used to be?

does anybody know? >> be careful. >> maybe i should have kept that to myself. >> the year was 1929, will be forever remembered as the stock market crash andi beginning of the great depression. but it was also the year the caterpillar started training at the new york stock exchange. caterpillar is going to be ringing the opening bell today. good to see you, doug. saw you at the round table meeting a couple of weeks ago. we talked then, too, about what's on everybody's mind and that is oil. we need to revisit that again. you're not necessarily big in necessarily exploring. we were thinking if it's just transition and other things, maybe your operations wouldn't be that affected. do you have a better idea how it's going to affect caterpillar? >> we are here at the stock exchange. 85 years of trading. whenever i walk in, it's a

thrill. this is a big thrill for us. certainly we're watching oil. there's no question there's going to be an impact on us. we're seeing some of that in the early days. i think most of our customers are kind of talking, get through the holidays, see what happens to oil price before they make major decisions. we'll have an impact. and it won't be like we've seen in mining and some of our big cycles in the past. but we'll see it in 2015, no question. >> i would think eventually it might -- you might not be able to directly connect the dots. but eventually it might help your business like it helps all businesses that have input cost. there's energy you have to pay for, too, right? >> that's right. and every one of our machines uses a diesel engine in the world. this giant stimulus program we've been blessed with will work its way through. in the mean tuyl we'll see the impact of that. i find it interesting when the people talk about interest rates at 2% ten years and $2 gasoline, $55 oil and it's bad for the

economy, i think for the economy overall it's going to be great. some of us in the meantime are going to have to adjust, go through a transition. and after that i hope it really helps stimulate the world economy which really drives growth and drives our business. >> sometimes commodity prices seem to head the same way. i wonder if you're -- you see the australian dollar when commodities are weak. you've still got the mining business. that has recovered a little or at least it's been bouncing off the bottom. could this put more pressure on that again? >> the mining business is definitely bouncing off the bottom. we're seeing a few signs here and there of replacement cycles starting, we haven't seen a commodity price in the metals really drop much more. but we are keeping on eye on that for 2015. we'll see how it goes again. economic growth drives everything. that's been the root cause of a lot of the lack of growth for many of us. >> doug, the other side of the

oil price decline is the dollar rise. what does that do for you or to you? >> we've worked hard over a long period of time to really balance our cash flow. so the bottom line, we're somewhat new to top line. it will affect us with less sales when we convert into dollars. but with our philosophy of trying to produce where we sell -- trying to make the amount of machines and the three currency zones, the eurozone, the dollar zone over the last many decades, we're kind of in a balanced position. but we will have some impacts on the top line. no question. >> doug, can you just quickly comment? can you feel china? can you tell from your order rates what's happening there? what is your latest take on that? >> china is definitely for our industry has been slow. certainly as they work through reforms, as they work through transition. in the meantime, we've worked

hard to fill out our business model, make sure our dealers are there taking care of our customers. i like our positioning. we're doing okay, but the market's not what it once was. it's still a huge market. we've got to be there to engage our chinese competitors. but in the meantime, we'll see cycles up and down like everywhere else. china's turning into a somewhat with developed developing country. >> we've talk sed so many times about bringing the money back overseas and tying that to infrastructure here. we talk about it a lot. and i know that, you know, at the round table the president came and talked to you. january will mark a new maybe starting point. the president, you know, alienated some of his base again by just getting that -- i don't know what it was, derivative issue in the budget. do you think that might be a sign that there will be some

give with either corporate taxes or could we tie something bringing back some of the money to infrastructure? that would help. that would help you. >> it would. and everyone's talking the right things and saying the right words about tax reform. solving some big problems in 2015. i'm optimistic. yet we've got to see somebody bring it home. there's a lot of ideas on how to use some of that cash to fund infrastructure. there's a lot of other ideas, but we've got to have somebody taking a lead and making big decisions out there. if that happens in january, that could help us all in 2015. we'll see. we know how sad our infrastructure is in this country. we've talked about that many times, joe. you're right. >> we've talked in the past about the dollar swings and how that can really impact some of the big multinationals. i know it's something you've been working hard to make sure that caterpillar is less impacted by that by making sure you set up plants in the places where you sell the machinery and the equipment. i just wonder what does a stronger dollar mean to you at

this point? >> well, for example, use the yen for example. we have lots of plants in japan. we export from japan to the united states, to china, to asia. that's obviously right now a nice tail wind for us. we've worked hard to make sure in the yen zone we try to be somewhat balanced. in the eurozone it's the same way. we see giant moves like we're seeing in dollar strengthening right now, our top line will be impacted. because of our cost structure and where we put our plants and the fact we can use yen in japan, we can use euros in europe it does impact us. it's something you have to work on over a long period of time. >> you don't have any plants in russia, do you? >> we do have two small plants in russia. i was kind of looking back at 1929 when our guys cake out here for some reason in late 1929 and

did their big ipo. which we were into. five years of the company at that time. >> what do you do when the ruble crashes like it just crashed? we're suspending sales in russia because it doesn't make sense when the ruble has wild swings. >> for the most part they're spent on the local economy. it won't have a big impact on us with the exploding economy. >> what do you spend on r & d?

i guess fuel efficiency would be something you spend money on, right? >> we've got some cool things coming. i was just in our text center and grounds not too long ago. a lot of it is around technology. how do we use machines more efficiently. some of the machines coming out today and those three or four years from now, we're looking at 5% to 25% fuel economy in which we tie systems, hydraulics, the engine, and the track together to work efficiently. and then let the owner use that to get 24/7 productivity out of it. we've got no operator running in australia running a complete mine site. dumping, loading, all the things it does with an operate. high-technology. >> would you say if someone

wanted to do something anywhere in the world they'd say i want the best to buy, would they think caterpillar or think some other -- they would, yeah? >> you bet they'd think caterpillar. that's one of the reasons i'm here. because my predecessors have been doing this and really investing in the company for 85 years. we're going to keep doing it for 85 more. >> i think cuba might need some infrastructure. >> oh, yeah. yeah, i'm excited about the opportunity in cuba. i think the announcement last week was long overdue, frankly. not just for business reasons but for other reasons. and i think we could see cuba down the road in a few years, maybe like puerto rico. there's a lot of cubans in the united states that would like to see that. it's a big opportunity. and it's between us and latin america. i think we could look at it that way down the road. >> all right, doug. congrats again on the 85 years trading on the new york stock exchange. and good to see you. >> good to see you, joe, as always. thank you very much.

>> we appreciate it. see ya. >> thank you. have a good holiday. >> you too. joe, i looked it up. i told you quick lanes took over. you know the bowl they took over for? little caesars pizza bowl. >> nice. >> i have not been to a little caesars in a long time. >> i like any pizza. but tell me again. the quick lanes bowling bowl. >> it's quick lanes the oil change company. but my family owns quick lanes bowling in indiana so i associate it that way. >> so it's not a bowling -- that was really. i thought that was -- i felt bad. >> so it's an oil lube, oil change company. by the way, how many bowl games has colorado been to? >> we won a national championship, but you remember what happened when we beat michigan? we got five downs oun one -- do you remember that? yeah we got five downs to win.

that's how we won. official screwed it up. >> by the way, rutgers has been to -- this will be its ninth bowl game since the last time colorado went to a bowl game. so the toilet bowl probably looks good to you. >> there's a a lot of bowls, becky. >> and you haven't been to any of them. >> but you did beat some of the teams that weren't -- you're 1-6 in the big ten. >> no. i think we won more than that. how many did we win? 3-5. not bad. >> i have a christmas present for you, actually. >> oh, no. now i'm scared. when we come back, time for the trading block. i am here tomorrow. oh, boy. can't wait to see this. wti down almost 50% since peaking back in july. plus why shars of oes of one bi company are soaring. "squawk box" will be right back.

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and high quality parts means your peace of mind. it's no wonder last year we sold over three million tires. and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪ in our trading block this morning, we are talking oil and currencies. king dollar keeps roaring ahead. the u.s. dollar index hitting its highest level since march of 2009. joining us right now on currencies with kathy lee and

micha michael khoohen. >> i think that in the new year we would very much seen a further extension. interesting, the last two weeks of the year nobody anticipates a big change in currencies. but we took a look at how the dollar performed in the last two years. and the green back actually climbed a fresh year against the euro at this time. so a lot of the moves that previous happened could continue. >> why do you think that is? is it the late fed meeting? are currency traders seeing something that stock trader aren't? >> i think in general what it is is the thin liquidity allows for exacerbation of existing moves. i think because we have a confidence about policy in this case that we could see a further push higher in the dollar. particularly against the euro because they were closer to the euro than the yen.

dominating with more of the same prices for oil. >> if oil is spriesed in dollars for them, it causes them to purchase that oil. it will lead to weakness further on. it also has an implications. if they're earning those revenues in dollars then they have an incentive or can weather this storm. because their dollar of oil produced is worth more. >> did you see the front page of "the wall street journal" today suggesting this wasn't the saudis being nice and playing u.s. allies. this was them trying to crush the frackers here in the united states. that sound like the truth to you? >> it's a bit of a bunch of things. there's geopolitics involved, certainly, but i don't think that it's the primary motive.

i think the primary motive that's involved behind the saudi decision is to preserve the market share in the long-term. and they convinced the gulf that some of their gulf allies to go along with this that they're willing to endure some short-term pain for long-term gain of market share. >> which means you think oil is where for the first six months of next year? >> our view is that oil stays pressured for the next six months. we have a forecast of about $58 per barrel for wti during the first half of the year. we don't see much potential for strength as we move through the first half of the year. partly because the fundamentals are weak, the demand for opec crude is about a mall and a half barrels a day less than the course over the next six months than the market needs. and they've stated very affirmatively that they're going to continue to produce. also you have producer hedging any time that the prices to come

up, they're going to come in and begin to hedge. that's also going to put pressure on the price. >> quickly, does that sound right with your forecast? >> i agree with all of that. yet more good news for the u.s. consumer. >> michael, kathy thank you for joining us. all right. coming up, sony's lawyers say the company plans to distribute the movie "the interview" somehow, some where, some time. meantime tensions rising between the hackers. eamon javers will join us with more and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're

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. welcome back to "squawk box" this morning. eamon javers joins us this morning and has an update on where things stand. >> good morning, andrew. the united states has not yet said what it will do in response to the alleged north korean hacking of sony entertainment website. it's been an embarrassing and damaging hack for sony. the president said over the weekend that it did not amount to an act of war. take a listen to the president. >> i don't think it was an act of war. i think it was an act of cyber vandalism that was very costly, very expensive. we take it very seriously. we will respond proportionately as i said. >> now, for their part the north koreans released a statement over the weekend. they are saying the u.s. should bear in mind that it will face

serious consequences in case it rejects our proposal for joint investigation and presses for what it calls countermeasures. now, guys, the north koreans here are denying they had anything to do with this attack. they also say that they would like a joint investigation into who exactly did this. and interestingly on the diplomatic front friday, the united states reached out to a number of countries to help develop some response to this including china and remember that it was just back in may that the united states actually indicted a number of members of the chinese military for hacking in the united states themselves. so align with the chinese could be an interesting turn of events here. >> eamon, we were talking to julia boorstin about this earlier. that sony would try to release this. to call up netflix and say here's the state of play and we

will protect you if you were to distribute this film? >> i could see that. if you're going to have some kind of industry-wide effort here as been suggested by a number of people over the weekend to release this on a multiple platforms all at the same time, you're going to need somebody with what they call convening power and negotiations. the white house has to convening power. part of the calculus here on part of the white house is in the past when north korea had provocative actions, the united states has always acted to kind of minimize it, not pay too much attention, not respond too much. under the theory that what north korea wants is a response and an escalation and a possibility to sort of rally the populous back at home. the question here, the president has said this is a core american principle. if they're going after seth rogan films, what happens next when they go after a documentary or news program. >> thank you very much. i think we've got to get dennis

rod man to go over there with a little negotiating for us. >> it's funny. when the film came out, i thought was dennis rod man a ploy that was sent that way. 2014 has been a record-breaking year for the auto industry. and a look ahead to the trends for 2015. plus after a weekend to sleep on it, how are cubans feeling about america thawing its relationship with havana. we have a live report from our michelle caruso-cabrera. "squawk box" will be right back. tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops,

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and during the big tire event, get up to $140 in mail-in rebates on four select tires. ♪ it looks like santa has arrived. >> it's me buddy! >> the s&p 500 tallying its second biggest week in two years. but is this rally for real? >> who the heck are you? >> we will check off the investor wish list. home for the holidays. ♪ falling oil prices and low rates. what will 2015 bring for the

housing market? and it's the busiest shipping day of the year. meet the company that lets you schedule a package dropoff at your convenience so you can avoid this. as the final 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. in studio with us, bob dahl. he is the chief asset strategist from nuveen. >> we've got a couple headlines this morning. u.p.s. expecting to deliver 34 million packages today. that would be an all-time record for the company. it's double the volume for a typical day. fedex to deliver 23 million

parcels today. that's a lot of stuff going on. i don't know how they keep track of it all. caesars trying to restructure the $18.4 billion of debt that it has in its largest unit operating on friday. that unit says it will file for chapter 11 bankruptcy production by january to cut its mounting debt load. then there's dish network pulling fox news from its lineup as a dispute. dish settled disputes that led to the temporary block anl of some cbs stations. we are less than 90 minutes away from the opening bell. looking to build on gains. the s&p 500 posting the second best week since january way back in 2013. this morning the futures are pointing to a higher open. europe's in the green today on a

rebound in crude. prices at this point have stabilized. right around $57, $58 a share. saudi arabia for its part says it will not cut production to prop up the markets. an interesting piece in the journal that we've had had a couple of them, almost what do you call those things? >> they're almost -- >> postmortems on what happened. a lot of it had to do with fracking. they don't -- they're not pleased that we produce 9 million barrels a day. >> no. that is probably what you could say has flooded the markets with more supply. big reason for the dropoff has been the increased supply. sometimes you're friends, sometimes you're frienemies. starting in january it will

exclude drugs from gilead and johnson & johnson for that indication. meg tirrell will join us at 8:40 eastern time. also check out shares of achillion. and it's thought to be a probable takeout target. shortened week, trading week for investors. after the expected lower volume this week, could see a move higher as we head into the new year. joining us now is howard ward, cio of growth equities. our guest host is bob dahl from nuveen. while you were out, your boy letterman. maybe he hasn't stop but colbert's show ended. >> it stopped. and will begin again in the summer. letterman i think is going to

retire in may. then colbert begins some time -- >> could you have a top ten list for why people should buy stocks? have i got that right? >> well, i've been doing that every year for the last few years. >> somehow we missed it. so do you want to start at number one? on letterman they start at ten. do you know all ten? do you have them memorized? >> probably not. >> can i help you? >> i invite your help, yes. >> is there any rhyme or reason to how you did them? do you want to start at ten or one? >> it doesn't matter. >> well, let's do it like letterman. what's that? oh. we made them one to ten, dude. we got to go one to ten. let's just pretend tenth is the best. all right. number one, u.s. economy. right? >> yeah. i mean, we're going to have the

50-year next year of record gdp. >> bob is nodding. when he comes up with something stupid, will you -- >> i read his list. >> you like them all? >> yeah. >> all right. there you go. >> just take my word for it. >> we heard about this. the u.s. poised for its fifth consecutive year. so that's a favorable backdrop. >> what about number two? central bank policy. here or everywhere? >> well, here -- you know, even if they raise the fed funds rate from zero to 25 from 25 to 50, that's still an extremely accommodating policy. so yes. and overseas, even easier. >> global markets, stimulus abroad in global markets doing better. that's three. what's number four? >> yeah. so china's weakness is resulting in part of the collapse we've seen in the produce of oil and

commodity prices that will keep inflation down. low inflation is good for the dollar, good for profit margins, good for higher pe multiples. >> you're not saying china just being a quick rower. it's a consumer-driven economy now. >> not yet. it's going to take years. >> and because of that, that's the bullish part you're talking about. >> correct. less demand for stuff. >> in your view, stocks are still underowned. by whom? >> sure. both institutions and households have around -- and what i'm talking about here is households, financial assets invested in stocks is around 37%, 38%, 39%. institutions, private and public pension funds combined around the 40% mark. those numbers had been north of 50%. and when the previous market peaks in the trade percent was 6% or higher, much more competitive than it is today. >> that's number six.

number six is relative to bonds are attractively priced. don't mush them together or we'll only have eight of them. >> i know. that's a no brainer. the hurdle rate to outperform bonds is very low. if your bond yield is roughly 2%. >> that's the one thing that could be a head wind eventually. >> it's going to have to go up a lot before it becomes a problem. >> i agree. goes up 25 basis points at a time, it's going to be -- i hope to see 5%. >> if you remember back, greenspan was trying to raise rates in the early 2000s. he kept raising the fed funds rate. it kept going down because of foreign demand for u.s. treasuries. that was his so-called conundrum nap could happen again. because the german rate's 30 bips. and u.s. treasury yield is at -- >> i didn't think of that. that puts a very interesting spin on how the fed manages all

of that. >> wuch is another reason, good news for the u.s. economy. if rates are so low. how do you get a 3% treasury? very unlukly. >> companies will continue to -- number seven. continue to reward shareholders with buybacks and dividend increases. that's kind of obvious. i mean you don't need to explain that. andrew doesn't like buybacks. >> i like them when the company's making a lot of money. >> just last week boeing the raised their dividend and buyback. >> it was the other one we made a big deal out, disney. all right. market will continue to enjoy gridlock. that is a cynical, ward. >> it's a fact. and that's been true of recent

years. >> these republicans better start playing and let the president do all the progressive things he wants to do. don't you think? that's what i hear on mainstream media all the time. when are these guys going -- >> to let him do his thing. >> yes. when are they going to stop being obstructionists! market will con't to -- they're just meanies, all those republican guys. mergers and acquisitions will continue. >> i do love those. market continues to go up. >> mergers and acquisitions will continue. that's good. all right. number ten. >> yeah. here we go. >> wait a second. drum roll. wait a second. wow. that's boring. estimated investment returns continue to favor stocks. see did not plan -- i think it should have been ten to one, maybe. we did a drum roll. that's what we get for the drum

roll? well explain it now that we built it up. try to make it interesting. >> yeah. >> rising pes came up a couple of times in the commentary. you'll remember pes went up 95, 96, 97, 98. the dollar market seems finally here. >> we've had the last several years you've had expanding earnings and pes. very likely in 2015 you're going to have expanding earnings and have another little bump in the pe. typically when inflation is around 2%, the pe on forward earnings is around 17. we're still not quite there yet. personally i think earnings estimates and gdp will be going higher, not lower. so we'll be looking at a higher figure to base that off of before too long. >> howard, your mind is fried now from doing all ten of those. so i'm going to do your stock

pix. you like names with cyclical exposure. >> correct. >> honeywell, boeing, financials, blackrock. and then energy like eog, pioneer, and continental resources. and i did that all from here. >> that was beautifully done. you might have a career here. >> thank you. because you couldn't have come up with those after you got all ten of those. >> my head is spinning. >> i'm here to help. thank you, howard. bob is going to stay and keep nodding for the rest of the hour. you added some stuff. we appreciate it. say hi to that guy -- >> dr. love? >> yeah. brings us the cheap briefcases. does he -- you know how frugal he is, right? yeah. it's just unbelievable, isn't it? >> yeah. >> for a guy who makes that much money. but, hey, you know, you should watch every penny. good businessman. >> thank you.

when we come back, nissan sounding the alarm about russia saying they are facing a blood bath over the ruble. plus reporting. michelle is back from cuba. and we show you a new app that promises to keep your packages safe from thieves this holiday season. and jim cramer is getting ready for the day ahead. "squawk box" rolls on after this short break. thanks.

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this week we are looking ahead to the new year giving investors a playbook on how to cash in. phil lebeau lays out his predictions for the autoindustry. but let's see how the predicted this year. he predicted entry level would heat up for 2014. unfortunately that battle never panned out. that's strike out. that one phil got right with the incentives help boost auto sales. he also said tesla model s stays strong and all eyes would be looking to model x.

he got that half right. boost bid a big september. the release of the model x got pushed into the new year. but that just write up the calendar. i can't believe we're judging everybody like this. however, let's see what phil is predicting for 2015. >> record auto sales? probably not in twpt. but should be pushed up for the first time since 2001. here are the things to expect. first, cheap gas. the national average is now well under $3 a gallon. and most analysts believe relatively cheap gas will be with us for much of next year. how low could it go? the energy department is predicting a national average of $2.94 a gallon. but even better and subtract gas prices admit it would wind up lower than that.

low gas prices means you can expect another big year for suvs. in 2015 suvs and crossovers will stay red hot. partially because several new utility vehicles will hit showrooms and stir the market. at the same time fuel efficiency still attracts buyers even with low prices at the pump. and the newest suvs are getting better mileage than ever before. finally the crossover to watch next year will be tesla's model x. the electric crossover will falcon wing doors is set to roll out by the middle of next year. will it be as successful as the model s? can tesla make the transition from making one model to two. and will elon musk's company attract as many high-end buyers if the world is running on cheaper gas? >> joining us now to look at the road ahead for autos in 2015 and what is next for your car's technology package, reuters managing editor paul ingrassia.

we better talk about the lower gasoline prices. how is that impacting sale of these things and will what will it mean for what consume consumers are buying in 2015? >> phil had it right. party like it's 1995. they've changed that equation on to get an suv or a sedan. that's what it amounts to. >> is that something that the manufactures actually respond to or do they kind of figure out this is a potentially changing thing. >> it's a bit of both. i think their model development plans are already going. but they have the flexibility to add extra shifts at assembly plants that make bigger vehicles. one of the most this year will be the new ford f-series pickup

truck which is the first all aluminum body pickup truck. but can it compete with steel body trucks? it's going to be a big one to watch. >> you also pointed out something i didn't realize. the big three and the uaw are up for talks. how's that going to play out? >> it's going to be interesting. this market has had a remarkable recovery. the uaw will want a piece of that. and they'll want to end the two-tier wage system. hourly wages of people who have been on the job for decades. so, you know, they're going to probably have to come to agreement in the middle there. you know, the other thing will be interesting, of course, would be weather in the wake of saving these companies and really saving the uaw whether the union will mount a serious strike

threat. whether the talks will be contentious. we don't know. >> finally we've been looking at technology. seems like every technology wants a piece of your car. you can name just about any technology company that wants to be there. are the big three going to give that up, or is it going to be something they can control how this gets laid out? >> it's going to be a battle royale. probably the silicon valley and that sort of thing. obviously the automakers will have a voice in this. but you have three simultaneous. hybrids, electrics, et cetera. all that stuff in your dash board. the nav system, et cetera. and driverless cars a few years off, but probably closer than we think. >> it's clear lower oil prices

are great in the developed world. there are more costs in the emerging world. how do you assess that? >> i mean, you know, russia is the big example where, of course, oil prices are going to take a horrendous toll because the ruble, the currency has been sharply down. worth about half of what it was. the russian automarket is collapsing. so i think that countries that are really commodities dependent and there's a lot of those including russia, but a lot of them around the world, a lot in the emerging markets. those markets will suffer because of what's happened to commodities places. >> i want to thank you for joining us. merry christmas. >> good to be with you. thanks. up next "the hobbit" is victorious at the weekend box office and sony's other movie makes it into the top three. details after this. plus will plunging oil prices help housing in the new year? predictions from a top analyst straight ahead. "squawk box" will be right back. cute little guy, huh?

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welcome back, everybody. "the hobbit" on top this weekend. debuting with $56 million over the weekend and taking in $91 million since its opening on wednesday. and a distant second place, fox's "night at the museum"

installment. the comedy took in $70 million while sony which is reeling from the cancellation of "the interview" amid hacking attacks unveiled its other holiday option as well. and the "annie" remake opened with $16 million. the north pole, the weather outside was frightful. so santa went some place delightful before his busy night this week. old st. nick diving on a reef in the florida keys. scuba santa's swim helped raise money for a children's charity. that's good. >> that suit is never going to be the same. coming up next, michelle caruso-cabrera has returned from cuba. we'll talk about her experience, the mood there, and the economic opportunities to come. plus there's a new app out there that says it can stop this from happening to your packages this holiday season. and beyond.

the man behind it is going to join ugh moments from now. after the break.

welcome back to "squawk box," everybody. a number of analyst calls of note this morning. rite aid upgraded to market perform at cowen. credit suisse thinks that blackberries should break up. the analyst sites the inherent challenges in trying to revive the services business and expects the company to continue to burn cash. little late. finish line downgraded to neutral from buy blaming promotional comps and margin pressures. the price target cut to $25 from $32. michelle caruso-cabrera is back in town after spending a few days in cuba. you still have a blackberry, i bet. >> i have a blackberry and

iphone. >> who else copped to that last yeek? >> you. >> you and someone else. >> i have a different provider on each of them. >> exactly. >> my wife does the blackberry with the mini. she says i have everything i need here. you have cute purses to carry it around. so tell me. >> so cuba's relationship with venezuela is on full display if you go to cuba. there are posters and big billboards. you know, there's no advertising in cuba. the billboards are pro communists and pro socialism. you see chavez on the right, castro on the left. we have no evidence that fidel castro is alive but no evidence that he's dead either. but they really talk about him in the past tense. cuba's relationship with two other time is in focus right now because of the decline in oil and the geopolitical situation.

it's really crucial for them because they've had to retrofit their power grid in order to be able to run off heavy oil so they can maintain the electricity. they get more than half of their oil from venezuela every day. and 50% of the oil that venezuela gives away every day goes to cuba. we know venezuela is descending into chaos. and you can be sure they have fears. russia -- now, the question also now, what about the relationship with russia and how does putin feel that we're re-establishing relationships with cuba? putin was there this past summer. he forgave about $20 billion in debt from the old soviet union to cuba. that was denominated in rubles. it's shifting in value at all times. the other question you have to wonder about and central bank experts have raised is we don't know what kind of reserves the central bank of cuba has, if any, and are some of them denominated in rubles which is

certainly a possibility. >> talk about a double whammy. >> exactly. speaking of russia, we have news this morning. russia has had to bail out a bank called trust bank. half a billion dollars worth of rubles. >> there's a more importants a te -- important aspect to this. >> we're going to get to it. bruce willis is their spokesperson. that's their home page. >> he gets paid in rubles? >> i hope he's got a good enough adviser that no. i mean, we've reached out to bruce willis for comment. we'll see if we get any response. >> the dangers of foreign endorsement deals. >> i wonder if he can even read what's on that website. >> i doubt it. maybe he does. who knows. >> but all those movies he's done with the russians always seem like the bad guys, right? the yippy kiyay you know.

one of them were the russian bad guys. >> good day to die hard. >> the fourth one. no. the first one was they were like terrorists. remember, hans gruber. >> but the more recent ones were definitely russian. >> you guys got to go. i mean, it's just so -- it's so weird. it's just such a strange time warp place. i wish young people could go so when we hear people like michael moore endorse socialism. you want socialism, come down here. >> he could slim down down there. you said people were -- not a whole lot -- >> for a long time there was little to eat. that's gotten better because of the easing of the travel restrictions. so more and more exiles go, they bring more money and products. and because now individuals there can open little restaurants, there's a lot more

actually fast -- not quite fast food, but the equivalent. more places to eat, more food. >> for some reason socialists and left leaning people write it off as any type of historical lessons that can be learned -- >> i don't know why. it's amazing to me. if you want massive government intervention into an economy, you want say every person works for the government, this is what you get. >> where you give everything up. >> they themselves cannot admit -- like it's not the public and private sector. it's the state sector and the non-state sector. >> venezuela, look at the oil production. >> it went down. >> i know. i know. >> mexico went down. right. >> but we have to learn at every 20 or 30 years, it seems like. in the process again. but you're doing your part. thank you. all right. mixed year for housing starts so far. prices and gains have fallen

sharply. in 90 minutes we'll get the latest on existing home sales. joining us now the former chief economist at fannie mae. do you expect 2015 to improve over 2014? it's just -- it's been a slow grind. kind of like the overall economy, i guess. but obviously interest rates aren't going to get any lower. and we're still -- i don't know. is it regulations? why is it still not as good as it should be? >> merry christmas, joe. i think 2015 will be a better year for housing. the fed isn't going to tighten if the economy isn't growing sthonger. or even if the fed does tighten, it's not going to tighten much. what we're really waiting for are millennials to form households. they haven't yet. as they get older, as they start to get married, as the jobs get better they're going to be less interested in living in their parents' basements and more

interested in owning a house or renting an apartment. >> so that's going to be one of the big shifts. what about just whether it's easier to, you know, to get credit at this point? i still hear that there's a lot of people that even though they would have qualified ten years ago, they're not qualifying right now because it's more stringent. >> you know, ten years ago the qualifying standards were too easy. what we want to do is go back to the qualifying standards of, say, 20 years ago. we're not there. it's much tighter today. qualifying standards are way too tight. we don't want to go back to where we were ten years ago. that was just too easy. but somehow we have to get a little easier from where we are. we're not quite there. and part of the problem is if you ease just a little bit, people complain that we're going all the way back to where we were in the middle of the housing boom. >> i thought we're talking about sales for people who are putting down less than 3%. >> you know, 3% is probably a risk.

5% maybe is not. but the real problem is layered risk where you let somebody put down 3% and give them a loan where they have a fairly low fico score. maybe it's not fully underwritten. as you add those risk factors, the probability default goes way up. if you just loosen one factor and maybe keep everything else fairly tight, the loss probability is still pretty low. we haven't eased in any way at all. >> this is the issue, joe. i think you hit the nail on the head. it's less about demographics. it's less about where interest rates are. it's all about how stringent are these lenders and they're very stringent. >> at this point, better to rent or to own just long-term, do you think? depends on your own individual circumstances? because it's not always better to own, right? >> no, it's not always better to own. if you're going to be moving in a few years, you think you're mobile and might be changing jobs. it's often better to rent. if you're an in area where the

price of homes is very high. if you live in san francisco where i used to live. even though rental costs are way up, the price of owner housing is through the roof. but there are many parts of the country where i live now in columbus where owning a house is less expensive than renting. you know, you're starting a family, for example. owning a house may be a better long-term investment for you than renting. >> all right, david. thanks. happy holidays, merry christmas. >> to you too. >> see ya. up next, afraid of this? take a look at what's happening here. are you afraid of this happening to your holiday packages? if you want to make sure things arrive at one piece, there's a new app to let you do just that. we have the brains behind doormen.

♪ the clock is ticking and the men and women in brown are out in full force. that can't be right. two days -- well -- i thought it was -- anyway. with two full days left, today predicted to be the busiest day of the year for u.p.s. set to process 34 million

packages in just one day. and that'll happen in the next 24 hours. >> until midnight on wednesday, is that how much is left? >> is that how it works? we should tell you it is the most wonderful time of the year. it is, but it can also be stressful especially if you just start buying all those gifts. there's a surge in package thefts and mis-deliveries in the season. and for all you last-minute shoppers, there is no room for error. doorman is a san francisco base start-up that ensures you get your packages on time and exactly when you want them. with us now zander o'dell, he's the founder and ceo of doorman. if you don't have a doorman, he will get you one. tell us how it works. >> thanks for having me. good morning. you sign up and we give you a new shipping address you can use on any site. once your packages arrive, we notify you on your home.

then you can use the doorman app to schedule delivery from 6:00 p.m. until midnight seven days a week. >> what i'm worried about with this to be honest is this is just setting up a second level of delivery, if you will. right? they're going to deliver to you and then you're going to deliver it to me within a two-hour window. now i feel like i'm waiting for the cable guy. >> well, it's a two-hour window when you're actually home. then if you get the gold service, it's just a one-hour window. you can say i want it on wednesday from 9:00 to 10:00 p.m., and i will be there. >> how much prior notice do i have to give you about when i will be there? >> you can get a scheduled same day as long as you get your request in by 5:00 p.m. that day. >> and who's bringing me this stuff? >> so we have our own team of drivers. they're all background checked, dmv checked. these are great folks for a lot of them it's their second job. and they're driving around in their own vehicles delivering packages all night. >> now, you just introduced

this. walk through the fee structure. >> sure. so we have a few different plans. you can either do $3.99 per package if you just want to try the service out. for a lot of our customers that order a lot of stuff online, we have unlimited plans for 19 bucks a month or 29 bucks a month if you want one-hour deliveries and unlimited package returns for all those trunk club and rent the runway purchases. >> so i get amazon prime right now and i have to tell you we probably have a package coming in virtually every day. it's crazy at this point. how can you make money off of me -- even if i pay you $30 a month and i have a package coming literally every day or every other day and 20 days, you can't -- i can't imagine that $2 per delivery actually makes sense. >> well, the way it works is most customers don't actually want a delivery every single day. even our gold customers.

they're getting around 15 packages a month. but they tend to get around seven deliveries a month. and even at that many deliveries in a single month for a customer, we're making money. >> we have go. we have breaking news but is this stuff insured? >> yeah. we have standard coverage rates. similar to fedex and u.p.s. >> well, congratulations. sounds like a cool business. >> thanks very much. >> thank you. we do have breaking news out of russia. michelle caruso-cabrera joins us. >> more fallout from the sanctions. morgan stanley and ross were supposed to be doing a deal together. morgan stanley was to sell to the russian oil company. but both have put out statements saying they are unable to get the deal done. they are very specific saying it's due to the impossibility of the deal because of regulatory clearances being refused. i'm being told that it is relaid to the political situation and

the change in relationship to the countries over the past year because of the situation in ukraine. more financial fallout because of what has happened in the last year or so. back to you. >> all right. okay. up next, jim cramer's wish list. plus the chief medical officers of express scripts will join us with meg tirrell next. the futures at this hour have been strong all morning. up 80 point oss on the dow. we'll be back.

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big news in the ongoing battle over drug prices. express scripts saying they will have an exclusive option on its biggest plans. sharing the news of gilliard down sharply down $11. abbvie up almost $3. in dollar terms, bobbles the mind. >> $160 million market cap. >> and down $10 on -- >> $16 billion right there. >> our meg tirrell is here with a special guest.

>> let's bring in steve miller. thank you very joining us. >> thanks for having me. >> so let's get right into it. we know that abbvie's drug has an $83,000 list price that the company told us about on friday giving you. >> we never disclose drug prices but you can say, it's a significant discount, big enough to allow us to recommend treating all patients with geno type one hep c. >> folks argue abbvie's regimen has more spills, some need to take it longer than gilead's renlment what happen do you say to doctor whose need the choice to prescribe gilead's drug. >> in the clinical trials the outcomes from the drugs, which never faced head-to-head trials, but the studies demonstrate the outcomes are outstanding. with both drugs cure rates over 90%. abbvie's done a phenomenal job of packaging the product, convenient to take.

comes in a blister pack with morning dose, your evening dose. compliance in trials has been really hoop. we're excited to be able to offer this product to our patients. >> you called this unprecedented arrangement. do you see this as the new normal for negotiating drug prices? >> we have been very clear in the marketplace that the drug prices are becoming unsustainable. and abbvie was really convinced that they wanted to open up access. we're hoping that more and more pharmaceutical companies take that same view. listen, this is what express scripts does for the country, we think when we find like partners leak this we can move drug prices and get more patients treated and more patients cured. >> are you looking to do this in other therapeutic areas, moving into diabetes, cancers, where there are multiple drugs on the market? >> yeah, we think there's great opportunities across all of the categories and we have to do something because the prices have become unsustainable. >> dr. miller, thanks for

joining us. >> thanks for having me. >> stay tuned. i have plenty of questions about this, because it reminds me of putting ten experts in charge of what you get for, you know what kind of medication you get. i'd rather have my doctor decide. >> exactly. changed it right there. >> much rather have my doctor decide than someone who is only worried about negotiating a deal with a drugmaker. new york stock exchange. gilead, jim, i know you followed that for a long time. what a story, number one, a larger market cap than some pharmaceutical companies that have been around for a hundred years. this is crazy, isn't it? i want to hold down the cost of drugs, too, but i also want to make sure there's an insensitive to develop drugs for things that where you're not going to make $10 billion, you're going to help people that need the help. >> yeah. look, i think that gilead paid a huge amount in order to get the

formulation, did a lot of great work on this. abbvie did a lot of great work, too. abbvie's drug, no one thinks is better. but you know what? they cut a deal. express scripts is 70% of the whole group. 70% of the populous. so express scripts is more -- you dealt with a guy who is like the government. i mean, he just mandated this. his team mandated. does he want to save people money? well, yeah. but i agree with you, don't we want the best drug? if the other drug's better, i'd like to think that the other company, that my insurer would pay for it. but we heard an edict and the edict, gilead, you're done. i think it's pretty shocking. i'm sure gilead, you see it's going down all morning. meg's next question, who else is at stake? this, my friend at the street.com saying, listen, everybody's going to have to rethink pricing if express scripts is now going to be the arbiter. it is kind of -- it's on a

sleepy monday the only story. >> brave, new world. i can see even if it works 9 out of 10 times where the drugs are equivalent enough to where it wouldn't make a difference. >> the doctor gets cut out of the equation. >> the doctor has no say. it's tough in health care land in terms of cost and everything else. >> the flip side of this? >> you want -- you know you want to throw your poor relatives over, you know, 75 years you want to throw them under the bus. i don't know if you have much credibility. >> it's not true. >> yes, it is. >> it is not. >> i have spoken about it. >> we had zeke emmanuel, you're behind his effort to kill everyone at 75. >> so -- by the way, he wasn't even agreeing with that. >> i know, i know. >> but the other question becomes whether when you give doctors as much discretion as they have -- you want doctors to have discretion -- whether they use the discretion properly. >> jim, andrew's word there.

we have to rethink our opinion. thank you. we'll see you in a couple of minutes. >> when we come back, bob dahl, 2015 investment resolution. later on "squawk on the street," a top mastercard executive talks apple pay. stay tuned. [woman] can it make a dentist appointment when my teeth are ready? [girl] can it tell the doctor how long i have to wear this thing? [man] can it tell the flight attendant to please not wake me this time? the answer is yes, it can. so, the question your customers are really asking is, can your business deliver?

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♪ get -- get back to our guest host, bob dahl. bob, for your -- you have a resolution for 2015? >> i guess i'm supposed to. >> did you come up with one? >> no, i haven't. this is the least believable market of my career. i'm reminded of john templeton, led me read it bull markets born on pessimism, grow on skep mifrp, die on euphoria. we move from disbelief to belief. from skepticism to optimism. it's not over but a lot of money in the rear view mirror. >> does it tell you how old the bull market is or how much life

is left? >> the first half of the bull market has more price vengeance than the second half. i don't want to get bearish. stocks are not as cheap as they were, can't pound the table. everything is expensive. >> what inning? >> we're in the sixth inning in time in the seventh inning in price. how than sound? >> that's -- that -- could be a doubleheader. >> love a doubleheader. >> resolutions? what are those things, fit things, what are those? >> jawbones. >> aren't we doing something? >> when the new one comes out, we'll get them around the table and we can all monitor our sleep and exercise. >> i don't want to know. >> kind of got sucked into a personal trainer, like a free beginning and i feel like a -- i'm doing stuff that i want to kill this guy, seriously, when he stretches my leg and pushes it up over my head and stuff. >> whoa. >> i'm supposed to wear one of we're going to get one? i don't need to spring for one

myself? that's my resolution. >> i'll get you one. >> are you going to pass it off as as a christmas to me? >> yeah. >> thank you for being here. appreciate it. >> we'll be here tomorrow. >> we will be here tomorrow. joan us. right now time for "squawk on the street." ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. kicking off a holiday-shortened week after the second-best week for stocks in almost two years. oil down 11 in past 12 week, some arguing the worst is over, b it's in the red. te ten-year yields around 217. housing numbers in an hour. markets, stocks again poised to break records as s&p starts