video greeting card this year, to nod his firm's investment in beats electronics, which was later acquired by apple. and there he is. >> love a guy with a sense of humor. we appreciate it. that does it for us today, folks. make sure you join us tomorrow. right now it's sometime for "squawk on the street." good tuesday morning. welcome to "squawk on the stree street". time carl quintanilla with jim cramer and david faber. dow, 18,000 once again in sight. a whopping 5%, the strongest back-to-back quarters in five years. oil's up as well. and wait until you hear what boone pickens had to say about prices earlier this morning on "squawk box." ten years, right around 2.18, we are still awaiting new home sales in a bit. our road map begins with stocks

set to open in the green as the u.s. economy grows at its fastest rate in over a decade. is dow 18,000 on the way? >> and walgreens shares higher in the pre-market. >> and new details on the massive recall that is scalding shares of keurig green mountain this morning, literally. but first up, mountains aiming for uncharted territory one day after the dow and s&p hit some record-closing highs, the blue chips are within 41 points of 18,000. a full point would take the s&p to a new all-day intraday high. futures extending their gains on data showing the that third quarter gdp up 5%. and then there's hedge fund manager david tepper, expressing some optimism about the stock market, writing to stock saying, quote, this year rhymes with 1998, russia goes bad. easing coming from europe. sets up 1999 -- i mean 2015. although you can read that two different ways. >> right, 1999 was parabolic for the nasdaq comp, fantastic for the s&p. obviously, 1999 is followed by

2000. he very specifically didn't mention 2000. it's a little bit opaque. but obviously, if next year's 1999, you have to be 180% long. and that's no what i'm trying to advise people to do. >> listen, tepper has had a very strong, long-term track record, trying to divine his intention from an e-mail, i think, is a little bit of a fool's game. i would prefer dialogue. he's a great guest to have on. >> and a great guy. >> a charitable guy. >> be nice to explore that a little more. i don't want to jump to conclusions to s as to whether saying next year will be a great year. you've got to be careful, then it leads to the next year, in 2000, was a big down year and the s&p fell. >> while the music's playing, jim, got to dance. >> look, i think that what matters the to me is that the market right now is not that overvalued is versus treasuries. and you're 16, 17 s&p is pretty good. and get to 29, 30 s&p, and you have what you had in 2000.

remember, 2000 -- >> 5% gdp print deserve? >> no more than what we're getting. i mean, i think you have to recognize that we have a lot of stocks that are pretty fairly valued. we've got some that can go up a lot. i would like to see more data. and he was talking about russia collapsing, david. that would not be necessarily positive. i don't want to base my whole outlook on an e-mail. i agree with david that a little conversation would help. obviously, if next year's 1999, then we're going to have a remarkable year, and you'll have to sell the last day of december. >> meantime, the gdp number driven largely by consumer spending. some good capex numbers in there. the last one was 3.9, going to 5. when you start revising jobs numbers up higher, you're missing -- the data's missing the momentum, the argument goes. >> yes, well, remember what dave cody said from honeywell. he said, we have been stymied

here, absolutely stymied here because of higher gasoline and higher oil. and that that's going away. and when you get oil down to a level that is really good for the u.s. economy, and for the emerging markets, then you're going to end up having a very good economy. and we have it now. i mean, gasoline has fallen dramatically. it's really good for discretionary spending. the actual percentage of jobs that were presented by oil and gas, not that big a multiplier, because really limited to a couple of spaces. it's just positive pip mean, it's okay. it's positive. sorry to be so -- >> it's positive? >> today. >> and if i start to hear some real backups again in the high yield market, that are drifting not just out of energy, more broadly, or emerging markets are starting to have a great deal of tumult again, we have an incredibly strong dollar. can i can go down so many different roads, it does appear there's skri schizophrenia to our market, where oil prices are seen both

ways. >> what happens if emerging markets mature? what happens if they come back? >> now you're talking. now you're talking germany. now you're talking japan. two economies we need to come back. >> i think they can come back from oil stays low. those economies aren't like ours, where there's these giant consumer economies with suddenly a lot more money. but i do think that we are continually underestimating the power of lower oil. it's a remarkable, remarkable thing to have this oil collapse the way it did. >> a few moments ago on squawk, you look at a gdp number like this, the immediate complications are for the fed. highest since april of 2011. a five-year auction later on today. you think the fed regrets not having changed the language more dramatically last week? >> i think the fed's not in charge. what's the fed going to do? the fed going to take -- they want to cause an inverted yield curve? the 2% is difficult. i mean, when you have other than

greece, bonds over europe, selling, you know, giving you very small return, i don't know. i mean, if the fed took the -- i think the fed should sell all its bonds. $4 trillion in bonds, sold. why not get out of them? i haven't heard a reason why yellin isn't selling the bonds? why hold them until maturity? why not provide them to the world who wants them. >> and you think they could effectively dispose of $4 trillion in bonds? >> absolutely. >> you do? >> yeah. >> that's a lot of money. we're still talking a lot of money. >> i want the yield curve to change. i don't think they can sell them at this price, but it would be terrific to raise the 30-year. why not? let's cool things off a little. >> you once said, they know nothing, in regards to the fed, and that was on the downside, you're not saying they know nothing now on the upside. >> this day is such it's very strong. maybe the affordable care act slows down things a bit. i don't think they're going to slow them that down.

this is a very robust number. if you believe that oil bounces right back, boone pickens did bounce back right, you're going to say, wow, what i did was react to that momentary low. but i think that the fed has this great weapon, which is to sell its bonds, give a little inflection in the yield curve, that will help banks, and it's not doing it. listen, it's an idea! listen, i told ben bernanke one day he would have to buy a lot of bonds, and he was like -- well, let's just say, there were meetings where i spoke to people in the fed, suggesting, you know, one day he may have to buy a lot of bonds. it was like, young man. like, young man! i wish i were a young man. >> we all wish you were a young man, then i would be a young man too. but they listen to you. i'm not sure, $4 trillion is a lot of bonds. >> it's a good opportunity. sell $2 trillion. >> maybe. when it comes to oil, which still seems to dictate to a certain extent where this market goes. we have boone pickens saying we're going back up. and we've got the saudi oil minister telling anybody who'll

listen that $20 is a possibility, or at least, they will continue to keep production where it is, even if it goes as low as $20. >> there's going to be too much demand -- look, it could happen. '99, we had a tremendous plummet and it came right back. some things can be turned off very quickly, other things can't be turned off. it's very definitely to turn off continental resources. look, still going to have 16% growth. it's very difficult. people are underestimating the gulf of mexico, which is about to produce 500,000 more barrels president next year. where are we going to put that? where we going to put all this nat gas? >> the term mega-blood is not an exaggeration. as for boone, he said it will go back because the production cuts you're talking about will take place in the next six months. he'll take rig count down 500. >> what's interesting is that boone has emphasized demand, and

if the demand -- he has said demand is week. i don't know whether it's so self-fulfilling that you get demand coming back. when i spoke to boone, he was adamant, look, demand is the issue. well, i don't see demand coming back. >> so how do i read continental resources, one of the biggest shale plays out there. harold ham, the pioneer, decreasing 50 to 34 by the end of the first quarter 2015. and average approximately 31 operating rigs for full 2015, also cutting its capex dramatically again from what was 4.2 to 2.7 for 2015. >> he has fabulous properties and he has expensive properties. so what he will do is shift the rigs to where he has these low costs. he will not go after the high costs. i know he's trying to develop scoop in oklahoma. maybe he has to pack down from that. whenever you try to speak about what harold's going to do, harold will call you, and advise you that you don't know what he's going to do. so i kind of want to avoid that

call. >> meanwhile, they're completing more wells. to your point about supply, they're completing more wells while they're taking down rig count. >> you can drill where there's a lot of oil and drill where you hope there's a lot of oil. and right now, a lot of the guys are switching to where there's a lot of oil. remember, these shale guys do, a lot of them deplete in half quickly during the first year. so you've got to recognize, that boone could be right two years from now. i think boone is -- i think he's shotgunning it. >> a little early. >> chesapeake today announcing a big buyback. closed its shale asset sail to southwestern for about $5 billion. >> sold to you, chesapeake! sold to you! can you imagine the mutual funds right now, saying $1 billion buyback. call him on the phone. i have like 500,000 shares i want to lose right now. sold to you! chesapeake is a natural gas company. where are we going to put natural gas?

>> well, actually, southwestern is is really a natural gas company. they're the one that parted with the $5 billion to buy the assets from chesapeake. >> i'm on twitter this morning, i have to believe -- you can't believe everything you read on twitter, because you can't believe everything -- my thing could be by north korea, for all i know. there's a woman who is talking to me on twitter basically saying, look, we have huge -- we have 51 wells on my land and canada's just walked away from. and canada was drilling. she then gives me the counties. i'll look it up. it does look like there is a lot of drilling there. and canada's a stretch player. so there are stretch players. chesapeake,ic, would have been better to conservative the fun. southwest, i don't know -- >> but they're taking in five and parting with $1 billion in terms of a buyback, and that happens over time. it's not as though they're -- >> so you can't drill them? you can't drill them like you want to? >> they're taking in $5 billion from the sale of this property, which closed to southwestern. so -- >> by the way, gas prices, now

$2.39 is the average according to aaa. down for 88 straight days. that's the longest decline on record, ever. and they're talking about another 10 to 15 cents by new year's. >> definitely! this is what's causing such good sales for the holiday. it's just this -- again, i come back to like the president should be on air saying, listen, we've got this gigantic tax cut. but the problem is the bill m mckiven problem. >> he argues -- he's one of the climate change true -- >> but i don't disagree with him on climate change. but i know that the fossil fuel, we're in a natural gas, it's supposed to be a bridge fuel. no one who makes natural gas in this country should ever say it's anything but bridge fuel. we all want to be electric, we all want our cars to go -- we don't want it to run on fossil fuels. and that's important or our kids. i don't want fossil fuels. but in the interim, we're going to burn fossil fuels.

and i hope we're burning less, but we still burn a lot of coil. periodically, you read that coal is not as bad as natural gas. you know, that's just kind of a -- how stupid of a story is that? but we want to get off of coal, get off of oil, and get off of nat gas. no one's saying that we don't. i used to make fun of them -- i used to call them the black lung, no rainbow coalish. and then these natural gas guys come on and they say, listen, we're from coal states, the governors want us to use coal, how dare you call us the black lung no rainbow coalition. and i said, you've wrecked all our trees, what are you? but when i meet all these ceos, they clearly don't want to be fossil fuel guys. they would like everything to run on what steve jobs wanted cars to run on. water! >> one of my favorite tweets of the season is, mark dow wrote,

if you're bad this christmas, you get gold in your stocking, as opposed to coal, at $11.75. >> you know who's going to be rich? what cso is going to be rich if that's the true? who will be the richest cos in the world, chief selling officer? costalo. >> i thought you were on a holiday hiatus. >> i didn't know where we were going onning that one. >> he just said if you're not -- >> i know, if you get coal, you get gold. >> he can't help himself. >> i know, i know. >> well, i didn't hit it yesterday. >> come on! >> carl gave me a little -- >> what happened to the spirit of giving, man. >> look, i said he was the chief selling officer. i'm not trying to get him removed from being the chief selling officer. >> when we come back, a setback for keurig green mountain. the company hit with its first major recall. we'll till you in, take another look at the futures here. we're waiting to see if dow

18,000 aps once again and we'll get to walgreens earnings as well, when we come back from the nyse. ♪ there's confidence... then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, 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.

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the results coming less that be a week after walgreens shareholders vote on the company's plan to buy what it doesn't already own of alliance boots. that expected on the 29th of this month, that vote. and of course, we're also dealing with the departure of greg lawson, which will take place in the not-to-distant future. one of the largest single individual shareholders of this combination, being that he was a boots guy, will be taking over as interim ceo. a lot of change at walgreens. good quarter. >> when i read this, i talked to greg last week, and i had green on the show numerous times. it did seem curious that greg's out. i mean, this is a fantastic quarter. the basket's up 4%. to me, this is when you give greg lawson a raise. i don't know, there are activists involved. activists like to go after the strong companies. but greg lawson did an amazing job. anyone goes to our cvs -- i

mean, to our walgreens, knows the they compete directly with cvs in a very high-level fashion. and i'm just surprised that he's out. but this is a big international deal and he completed it. he said he wanted to turn the company into a health company, he wanted to make it so the stores were better, he wanted to become international, and he's completed all the things he wanted to do. that's what he told me. >> well, passina is a very strong-minded gentleman. he's in his early 70s, but he is viewed as very aggressive. it will be, obviously, important to see who the company chooses to be his successor for the longer term at walgreens. >> but don't you find it amazing, here's a guy that did a fabulous job, lawson -- >> i would like more insight. i should have had it by now. hard to get ahold of people this time of year to a certain extent to understand exactly what took place in that board room. i think boards are looking more carefully at this thing. i don't know what role passina played and lawson, perhaps, somewhat abrupt departure. >> i think the cfo also had an

abrupt departure. >> the cfo had some issues, without a doubt. but this company has righted itself, certainly. >> i have a lot of ceos who deserve to see the door more than greg lawson. >> how many in five seven comps do you get in retail? >> remarkable numbers. there are a lot of numbers that are not nearly as good. but take a look at the changes at walmart and target, those seem to be merited. target in particular. there was kind of an issue with target and the previous ceo versus brian cornell who's really trying to turn it around. >> you know the best-performing retail stock since black friday? staples, kroger. worst, amazon, gamestop, priceline, tiffany's, macy's. amazon down 11% since black friday. >> kroger's been a horse that no one really talks about.

>> staples is special because of the -- >> what's kroger other than a remarkable store? i mean, i guess that ceo will be out any minute, right? maybe activists take over kroger and want it to be 110. kroger's amazing. when you meet with the natural and organic food people, they say, listen, kroger saw it coming. when you meet with the people who do private label, they say, kroger saw it coming. kroger's the least promotional company i know. you never hear about the guys who run kroger. all you see is the stock -- if you look at the chart of kroger, it is one of the great slopes up. it's a remarkable. >> i know, walmart's going to eat their lunch, walmart's going to crush them. not so much. >> i think that stock -- the problem is, kroger's in that great area, that area between like new york and san francisco. i mean, i know, david, you probably haven't visited lately, but there's a big part of the country that kroger's in. >> kroger, the 11th performi 1t

best-performing name this year, right behind monster beverage. >> we'll count down to cramer's mad dash ahead of the opening bell. take one more look at the free market. not only has the dow and s&p recovered their losses for december, but only with ebola, russia, oil, q4 is now the strongest quarter of the year. we're back in a minute.

all right. we've got about five minutes, 5 1/2 to the opening bell on this tuesday. want to talk a little gilead from yesterday. >> a really big decline and today deutsche bank lowers its gilead price from $1.42 to

$1.45. the stock is up gigantically and everyone kind of felt, there's no way there could be a price war in this thing. a price war is going to mean that margins are lower. it means that we see beak. when the multiple kept shrinking, that was our sign that maybe something was wrong with gilead. i remain on the sidelines of gilead. i think the stock can come in and you'll get a better price. we still have yet to deal with an express grips coming on tv and saying, listen, we're back in charge. the drug companies don't have it, we're in charge. obviously big pharmacy benefit manager. this is a change -- >> is it a watershed moment? do we see express scripps do this with other companies, with other big drug companies' key drugs? i think addv, do they come and say, we want to try to replace that or do a deal there because the price is too high? >> this is a fabulous thing for

the united healths of the world. it's a fabulous thing. it is a way to be able to -- remember, we thought that the u.s. government would start causing competition to the veterans ministry. >> under the prescription drug, they were unable to cause complication. >> suddenly, express scripps is in there and i'm saying, let's wait on gilead. i think you'll get a lower price and then you can take action. it's just beginning to dawn on people that we could be in a new world. i was shocked that express scripps made that deal. but i think addv's fine, but this is gilead, david. gilead. >> we'll be watching gilead look with a lot of other stocks. the opening bell coming up right after this. tdd# 1-800-345-2550 [ male announcer ] your love for trading never stops,

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this. some people say it was because oil was high, other people say it was because of things that happened in washington. we have no sequester this year. we've got some -- gasoline. maybe this is just -- maybe it's what to do. >> there's the s&p at the top of your screen. and down here at the big board, ringing the bell, pure funds, an ise cybersecurity etf over at the nasdaq submitry surgical. a good moment to point out that the s&p has not fallen four days in a row, all year long, and the last time that happened -- never. it has never happened. >> look, it's a great market. i think what's really fabulous, again, is that you pick up the paper and the market's not mentioned. not mentioned. yesterday, the paper, the lead stories about the market were about the problems with techs.

it is a remarkable market without champions. because everyone's been so burned, everyone's afraid to say what a great market, because the moment you say it's a great market and the market goes down, you will be ridiculed everywhere. it just doesn't make sense to say it's terrific. this is not like saying, you know what, i really think the patriots are terrific. it's about saying this market's great and having it decline and watching on youtube, you forever saying it's terrific. it's just easy to say it's good. >> now, you have been cautious. everybody was cautious around ebola, something we didn't understand. you didn't like oil going to 60. >> look, i don't want to -- look, it's a really good market, but i also know that i don't want russia to collapse. i don't want want the high yield market to collapse, but we're being marked up to the end of the year, and i want to see what january's going to look like. but it's really -- look, gasoline is lower than i thought it would go. >> take a look at your screen. the dow now officially topping 18,000 intraday. it's taken about six months to get to 18 from 17.

interestingly, the dow first crossed 180 back in 1927. 1,800 in 1986. and now, of course, 18,000. >> there's a lot that's good. and you know, you go over the charts. a lot of groups in the industrial starting to do better. the defense stocks are doing great. the health stocks are doing great, insurance. typically when oil goes down like this, the utilities have been a leader. tech stocks are starting to come back, particularly old tech. but there's a lot of paying more for the same earnings. a lot of multiple expansion, which is not necessarily terrific, but, look, i say enjoy it while it lasts, but it is getting a little parabolic out there. >> stocks that have added the most to it, visa, goldman, and 3m, followed by home depot. >> 3m is incredible. home depot is amazing. home depot is a play on discretionary spending. 3m is the brilliance of developing a lot of new products. visa's charlie scharf, a

hard-charging guy. i don't want to get in front of charlie. charlie is a remarkable executive. there are some fantastic executives. you know, now, of course, home depot's transitioning, but these are some great executives that have done a fantastic job. >> these are positive point impacts and negative point impacts, since 17,000 in july. negative points, caterpillar, chevron, and ibm. >> ibm and caterpillar run by really nice people. >> there you go. >> and you'll leave it at that. >> that's the new cramer for the holiday season there. >> look, i'm no grinch. i'm know potter. i think an executive is doing -- i've got to turn a new page. i've got to get less angry as i get older. i've got to be more loving. >> i feel the love. >> yeah, feel the love.

>> keurig green mountain is not feeling it, down 3%. this is their first major recall. 7.2 million of the so-called mini plus machines being recalled for what they're calling a burn risk. gmcr will have some trouble getting out of the gate, even on a good day like this. >> what a great opportunity for coca-cola to step up and buy them and also step up and buy monster. this would be a great opportunity to get growth, if keurig's really done. anyone who's burned, it's terrible. when i was using my keurig this morning, i said, i just love this device. i used to throw away a lot of coffee. mine does not spew hot water. my soda stream spewed cold water and spewed ginger ale all over the place and everything was really sticky. but mine does not do this, obviously, it's a recall and recalls are bad, but i think coca-cola wants to buy keurig. >> think they're paying too much if they were to do so? >> knob wing they need the growth and keurig's a great company. they've come up with a device

that's a better mousetrap. i think it's -- they're going to do cold keurigs. that's really terrific. i remember when i said i liked keurig and david einhorn made vicious fun of me at a -- david einhorn's a nice guy. >> he is? >> david, the spirit, you haven't caught it yet. >> just saying. >> a nice man. ridiculed me, furiously, nice. >> new century, that's a good one. i am looking at, to our conversation in the mad dash at cellgene, down over 2%. gilead actually not being able to host a gain. it is down. amgen down. >> celgene's got a drug that's really great. the fact is, look, addv is a drug that cures you.

this is not a maintenance drug, it is a cure. so does gilead. one has a different regimen that the other. express scripps has decided that adv is as good and you'll get stuck with adv's drug and it's going to save the system money. >> it will cost you a lot money. >> i'm sure if you're an investor and saw yesterday's news, you're going to be focused on trying to make sure you understand where that opportunity may lie yet again for the pharmacy benefit. >> and you want to pay a lower multiple for that stock. now, i like isis pharma very much. isis has nothing against it right now. why should i pay less for isis? i just think it's case by case. but it just so happened that everyone knew that there were a series of companies working on cures. abbvie, a lot of people felt like, listen, you have to take it twice a day, it's just not as

good. i don't know a soul who felt that express scripps was going to cut a deal with abbvie right after they got approval. this was a one-two punch, instant! it shocked people. >> do you think broadly, jim, broad market stuff, january will be a month of pain, a month of tears? >> i kind of do. i think that you'll have a lot of companies that you'll get tired to of seeing that the currency's not that good. you'll get tired of paying the same amount, paying more for the same amount -- >> you say the currency's not so good. are you talking about the impact of a higher dollar on many multi-nationals. >> against that is, retail's really on fire. i'm watching retailers that i've really kind of given up on. like a dillard. i'm watching ross stores doing really great. but lowe's corp. if gasoline stays down, you'll love the retail. >> interesting, because there's been some analysis lately that retail at year-end has typically not been such a good trade.

you think gas prices change? >> i just think they have. there's just more spending money. we are a nation of spenders. that's why our consumer economy is 70%. you have to be a little more bullish about the rth, about target, about walmart, suimply because a major tax has been crushed. the tax of oil. i think oil, we forget. how did oil not come down? we had all of this decline in europe and in china and in latin america. and oil stayed up there. we're seeing the real price for oil. and that is great for walmart. look, has walmart changed that much? but you have more money when you go to walmart. do you think walmart's changed, under mcmillen? >> it hasn't been that long. i think it takes longer to truly transform a company. again, i think these things take a long time. leadership can be applied right away, but the actual changes that come from that take time. >> but when you have more money in a holiday season, i think you

spend it. i don't think people save, i think they spend. especially when saving is such a bummer. >> in this country, that's basically how a lot of people feel. >> it is such a bummer. >> because you don't get anything. >> you get nothing. >> you know, i'm getting -- i don't even know what i'm getting on my cash balance. i know i check it every day and i'm not being hacked. and every day i'm not being hacked. >> you mentioned that, this times piece today doing some forensics on the jpmorgan hack does not make them look very good. no two-factor authentication? >> on this one particular part of the network or this server they haven't gotten to. >> i feel like every day i have the money in the account is a good thing. just a good thing. >> well, it's a day we haven't mentioned the sony hack, so that's got to be a good thing. >> we're going to get to that. >> any new oneones? >> how about the fact that george clooney is coming out the hero? >> how about that sony's unchanged since halloween

because of the yen? >> do you think we should be jealous of george clooney. he has the number one selling tequila -- >> you mention this every third day. >> he's trying to get him to come to san miguel to bring tequila. >> that would be the greatest day if he came. >> i'm sure it's going to happen. >> we're hanging on to 18,000 by a thread, first intraday high for the dow since december 5th. let's get to bob on the floor. >> modestly on the plus side. i think the problem is, we've got an issue with q4 economic numbers. q3, fantastic. but the q4 numbers aren't looking so great. those durable goods numbers this morning were a bit of a disappointment for november. we may see estimates coming down for the fourth quarter. but take a look at is sectors, we're up. that's because oil's a little bit, and energy is helping to lead the way, financials, industrials, consumer staples, all the right names are leading. but we did get some news out

there, chesapeake, a $1 billion stock buyback. they just finished one of their $5 billion asset sale, i should say. continental, i think, is the big story. you know, continental is a real wake-up call to everyone who says, oh, capex expenditures take a long time to go through. huh? look at this cut they have in the capital expenditures. this is a staggering number, $2.7 billion. previously, we were around $1.6 billion. that's a capital expenditure cut. that's an enormous number. and the recount, the first quarter 2015 at the end, prior numbers were for 50 rigs out there. now they're talking about 34. everyone who said, this is going to take a while, well, the bottom line is, the supply side is going to be very quickly adjusting to the lower price of oil. all this is very good news, companies like continental are going to be well-positioned when oil recovers, and i'm sure it will eventually recover to some extent. and they're going to be better positioned for that.

meantime, i keep getting questions, a good time to buy or not? part of the problems is looking at p/e ratios is a tough way. put up some of these names, these shale plays. their numbers are pretty low. chesapeake's at 13 times. denburry at 13, i think it's more important to look at capital expenditures and oil is a better way, whether or not you should buy these stocks, but certainly they're starting to attract them on a 2015 basis. meantime, david tepper was on our air this morning, on "squawk box," talking about valuations in 2015. and he went back to 1999 and '98, the year rhymes with 1998, russia goes bad, easing coming from europe, setting up 1999, i mean 2015, he is saying there. and of course, he's talking about the fact that russian defaulted in 1998 on its debt. meantime, he says, remember, 1999, s&p went to a 30 p/e. next year p/e is like 16.

it's not going to get that high, but be aware that the conditions are high for overvaluation. and finally, you were talking about the sony hack. we should note, opening the ringing bell here, the only etf that actually has cyberhacking, that's hack, only a month old, and that etf has gone through the roof, just in the last few days on that discussions on sony. guys, back to you. >> thank you very much, bob. meantime, we're watching fixed income as well. let's get to the bond pits. rick santelli at the cme. hi, rick. >> hi, carl. obviously, it was the one-two punch. the first punch was a very strong five handle on gdp, but the other punch was a very weak diagnosis of what we're looking at in the first quartourth quar. first quarter, minus 2.1. second quarter, 4.6. third quarter, we just saw the final revision, 5%. everybody handicapping the fourth quarter, around 2.5%. what does that average out to?

exactly 2.5%. so let's put that out there. let's look at the last time we saw a two-year note hovering at 73 basis points, april of 2011. but be careful. yes, that's accurate, but that's the new guy. the old guy is gone. that's what we auctioned into a new guy yesterday, the old guys becomes off. so you can see why things on the comps are going to be a little peculiar. the same will be true tomorrow when we have the 5s today. if we look at the five-year, speaking of which, we have that auction. last time we were up here was just recently. so if you see the chart from october of this year, it gives you a good sense of how the curves are kind of flattening some more, especially with the two-year and five-year are doing. if you look at a ten-year intraday, you can see it definitely responded to the stronger-than-expected gdp, unlike our counterpart, boons went from 58 to 60 basis points. so you know, disengaging to some extent. let's open it up to december on our ten-year to give you kind of a glimpse of where we've been.

we do see that we came close to 2% on an intraday basis closed higher. we continue to monitor the mid- to teens. if we look at what is going on, i referenced the boone yields. knowing that the boone yields didn't move up as high as ours, the spread widened, close to 160 basis points. which is really getting to a very historic area. we go all the way back to summer of '99, you see it wider. but if we start to get much higher, we'll be setting historic records on that spread. why do i go into it? that's going to draw our ten-year down or theirs up. we want to monitor that. foreign exchange, after today, the dollar was just on fire, or you can say that fire currencies were being doused. either way, works out the same. the last time the euro was at these levels was august of 2012. dollar/yen now flirting a couple of sessions in a row, back over that 120 mark. so we're comping back to june, the summer to have 2007. carl, back to you.

>> rick, thank you very much. r rick santelli. when we come back, the dow surpassing 18,000 for the first time. the s&p with a new all-time high. "squawk on the street" will be right back. 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.

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take a look at the dow, as we are above 18,000 for the first time in the dow's history. against some data we gave you a while back, 1927, it crosses 180. 1986, it crosses 1,800. and now this. that motion components in the green led by microsoft and counterinto counterintootively, cart pillar. >> nike coming right back after what i felt was a good quarter and people were too negative about it. and proctor doesn't seem to put anymore, every day they seem to sell another division that was underperforming. they are really dismantling the negatives. >> they're shrinking to grow. >> how profound.

and there's just a lot of good feeling, except for in the drug group, where i think people are trying to reassess whether the express scripps is just going to determine the prices. >> best -- i would not have guessed this. best dow component this year? intel. >> intel?! >> i would not have -- >> 45%. >> brian kresanich has done a lot of work. amd has been kind of left behind. remember, hewlett-packard's been terrific. brian is a fabulous guy. he's an engineer by trade. he is nonpromotional. it's a return to the engineers. when intel was run by the brightest people in the country. >> and worst? there's like three names you could guess for worst dow component. >> oil? >> i would have thought chevron or exxon, it's ibm. >> well, ibm is kind of the opposite of brian. >> yeah. >> but remember, i'm in the --

don't get me going. >> they would take issue with that, as you well know. >> i said that they're nice. who would take issue with being nice? >> nobody, but they would take with issue that they're not a forefront -- >> get cramer on the phone. >> -- research and development, they spent an awful lot of it at ibm. >> people there are just like -- it's just such a nice place! >> got a lot of people. >> we will get stock trading with jim in a moment, we'll get some breaking news on consumer senting. 18,014, hanging in. "squawk on the stree "squawk on the street" will be right back. can it tell the flight attendant to please not wake me this time? at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim? like, right now?

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some say buy gold. others say buy soybeans. i say, buy comcast business internet. unlike internet providers that slow down when traffic picks up, you get speed you can rely on. it's a safe bet.

like a gold-plated soybean. reliably fast internet starts at $69.95 a month. comcast business. built for business. time for cramer and stop trading. >> i think i'm trying to get the prototype stock that people like right here. what is the stock that people like? tom faulk has done a remarkable job at kimberly-clark. it yields 2.85. that's a safe yield. there we got the edge on the ten-year. it's a gigantic maker of huggies. okay, what's in a diaper? okay well, you may think a diaper's cloth, but a lot of it is oil-based. what do you need when you make kleenex? you need a lot of energy. they got rid of a health care division, i like it very much, this is what people are buying. bmo pointed that out today. and i want to say, if you want to get involved, you're paying 21 times earnings for a very consistent company, that seems

expensive, but kimberly-clark is this real. it is a rally based on what dustin hoffman talked should have gone into in "the graduate," plastics. >> plastics and a yield, too. >> and a 2.85 yield. mr. faulk terrific. a great story. that's what people want. and i give it to you. i give you kleenex. i give you huggies. i give you scot paper. what do you give me? >> consumer sentiment. which rick santelli has right now. rick? >> all right. once again, we have an extreme day going on. final december read. remember, 93.8 was the mid-month read. that was powerful. the final read, just as powerful, about. 93.6. 93.6. why is this important? because now as the final read, i can comp this all the way back to the best number since january of 2007. we still have richmond fed new home sales, personal income, and spending, all coming up at the

top of the hour. back to you. >> all right. thanks very much, rick. jim, what is happening tonight? >> we have via sat. this is a company that's terrific. you can watch netflix on a plane because of -- >> a good thing. >> movies on a plane. >> better than snakes on a plane. >> better than snake on a plane. a lot of stocks that go up. again, all of this stuff is kind of happy days. i don't want to say it. >> be careful! careful. >> we want to say, kind of happy days. >> relative to the rest of the world? >> yes. >> and remember, to all the executives i've been tough on, i know you're all nice. >> we'll see you tonight, jim, 6 p.m. eastern time. we'll get some more breaking economic news at top of the hour. income and spending, some new home sales. with the dow at 18,019. we'll be right back. nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour.

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good morning. welcome back to squa"squawk on stree street". i'm carl quintanilla. take a look at the markets, 18,021, the first intraday high for the dow since december 5th 37 of course, this puts us above

18k officially. on the back of that, a who were of a q3, final gdp number of 5%. the first back-to-back four-plus numbers since the second half of 2003. >> let's get to our road map. the dow, topping 18,000 at the open, propelling the dow, visa, goldman sachs, 3m, but what could derail the rally? >> and what on earth is happening with nat gas? the 9% drop that we got, the worst in ten months and the lowest close in nearly two years. >> just two days left for all you last-minute shoppers, so how is mobile disrupting this holiday season? we'll speak to the co-founder of comscore exclusively this hour. >> more breaking economic data. we'll get to rick santelli for that. rick? >> yes, let's start out with the freshest data, december, richmond fed, comes out at 7, as expected. now let's go to november, new home sales, we're expecting 465. 438,000, last month, revised down from 458 to 445.

which should make it down a little less than 2%. how does 438 figure? i'll give you some statistics. you know, 459 is basically the high water mark for june of 2013. and the last time we were over 1 million was november of '06. now let's look at november income and spending. very close to expectations. income up 4/10, spending up 6/10. both of those originally released at up 2/10 last month for october. they both now stand at up 3/10. so pretty good. we like to see the spending, but see it fueled by income. spending did outpace it a bit. if we look at the deflatteror, n 2/10. i'm at year over year in october. interest rates still can't get to 220, even though, of course, the dow is passing out 18,000 hats. back to you. >> thank you very much, rick. so there are two main headlines coming out this morning, one,

the dow has crossed 18,000. the second big headline, in the third quarter, this economy grew at its fastest race in more than ten years. a gain of 5%. an upward revision to 5% at an annualized rate. joining us now for analysis, chad morganlander, along with deutsche bank's chief u.s. economist and cnbc contributor, joe lavorgna. he joins us on the news line. joe, we knew there was going to be a big bulge in medical spending in the third quarter. is that what is mainly driving this revision to gdp? >> yes, simon, that's right. it was mostly medical services. but as you know, the overall economy, capital expenditures, consumption of durable goods is doing very well. but, yes, the latest figures were stronger health care expenditures. and that's been a reason why growth through much of this cycle has been weak. we've not had a whole lot of growth in consumer services and fortunately now, simon, that appears to be changing and this is unambiguously good for 2015. >> chad, the consensus in the

market is that health care and technology, which is obviously a proxy for this strong business spending, are places to be next year. presumably, you reinforce that sentiment here? >> without a doubt. we find value both within the health care sector as well as within technology. i would suggest, though, within the technology sector, to stay with the old-world technology names, the oracles of the world, ciscos of the world, and within the health care side, go with abbott or etna. stay with the bluest of the blue chips. >> joe lavorgna, not to put a dent in your optimism and be a debbie downer this morning, but unambiguously good even with a negative goods figure? when the consensus was calling for 3% and that's a much timelier number? >> well, sarah, actually, it's not. it is timelier, but it's extraordinarily volatile. and the things that i look that have been telling me for the past year and a half, with the growing of about 4%, which we have, are saying, look, this economy has got tremendous legs,

we've got improved household balance sheets, a healthy corporate sector, low rates. it's all really shaping up for a boom. by next quarter, we'll be over 4% year over year growth, very strong. >> hey, joe, how much do you worry about -- i mean, it's great -- it's obviously fantastic for anyone who lives in this country. but the asymmetry between our growth and the rest of the world, how much do you worry about it? how much does it provide the potential for misallocation of capital over time? >> well, the misallocation of capital call, that really is a fed question. so that certainly is a problem with rates where they are. if the rest of the world were doing well, we'd be at 5% growth, on a trend basis, not moving up to 4. you've got to remember, the u.s. is a closed economy. only 13% of our gdp is exports. and the remaining 87%, or most of it, has gotten a huge tax cut, that we've yet to feel the full effects from the lower energy costs. this is just really, really good news. i wish this economy got more respect, because post-revision, the numbers look great. >> joe, you point out that next

year, there are no monetary policy hawks on the fed at all. let's leave that to one side at the moment. david tepper, the richest man in jersey today, is gaining a lot of attention for suggesting that basically, because of where we are with the russian crisis, i assume, because of where he thinks we are, with the federal reserve, that actually we're setting ourselves up for 1999. now, people should remember in 1999 that the stock market surged 19%, arguably because the fed had moved in the wrong direction three times the year before. joe, what do you make of what tepper's saying? >> there are some serious parallels to 98. and i agree with him on that. and if there will be hiking next year, just as they did in '99. but remember, back in '99, the s&p was about 40. and that's certainly not the case now. and when the fed raised rates, they took rates to 6.5%. real rates were over 400 basis points. if the fed takes rates to 1%

next year, real rates will still be about negative 100 basis points. so there are some similarities, but the economy and markets, they have a long way to run. this cycle is nowhere near being over yet. >> i think the point we mentioned here, after 1999 with a 19% gain, the stock market fell for three years. that's when he's talking about. he's not calling a top, but warning about overvaluation. and that instance, which took us down 25%. >> look, for the whole year, we have been bullish and overweight equities. we decided to go neutral within our portfolios at this point. forward-looking multiples are roughly about 16.5 times. we see gdp growth in 2015, roughly about 2.5%. and earnings growth, perhaps around 7%. so when you come out, come out with probably a 6%, 5% total return for the year. here in the united states. by the way, let's just face it, okay. this was a global economy, but it's also a global financial market. and the economy overseas is

doing lousy. decelerating growth within china, as well as the emerging marks, which can't get out of their own way. and let's say, hey, look, the bonds are trading there, the sovereign bonds are telling you it's deflation, not disinflation or modest inflation. so we're fighting this and this will be the situation for 2015. >> and this all comes back to what does the federal reserve do in 2015? does this ensure that there will be an interest rate increase? 5% growth? 5.8% unemployment rate. >> they signal they will go, go by a quarter of a percent, perhaps a half a percent. feedback loop into the overall financial system will be virtually nothing here in the united states. but you will see dollar strength. >> already. >> so as a u.s. investor, overweight u.s. equities, stay away from overseas, because you will underperform. >> chad morgan, thank you for joining us. joe, nice to hear you as well, joe lavorgna joining us from deutsche bank. >> and the dollar is making a fresh eight-year high. people are calling 2014 the

mobile holiday. but just how much is that impacting brick and mortar retail sales? the cofounder of com scores is with us next. one more check on the break. the dow up 88 points, past 18,000. the s&p urging on top of 5% economic growth. here's a question for you: if every u.s. household with a computer used sleep mode when they weren't using it, how much could we save on electricity each year? up to $1 billion? $3 billion?

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the street". check out the hertz. it announced prices for all hirts, dollar, and thrifty car rentals for pickup starting january 1st. this due to falling vehicle values. it's been a tough year for hertz, which is down about 20%. remember, sarah, the biggest shareholder in hertz right now, carl icahn. back over to you guys. >> we've been following that drama all year. comscore labeling this holiday season the year that mobile forever changed retail. with one in every seven dollars spent by consumers done online. joining us now, dan fullgoni. so those who shop on mobile phones spending as much money as they would online or in stores? >> maybe on a per-person basis is a little less than if they were using a desktop. but there are so many of these mobile devices now, both phones and tablets, that somewhere around, approaching 20% of all online spending is being done off these mobile devices. >> and i guess the fact that

mobile is growing so strongly, is that coming from online users or is it coming from shoppers and therefore put more pressure on retail traffic? >> it's a good question. it's certainly coming from online users. but i think it's what's happening -- which has a little downside, if the phone is used while the consumer is in the store, to check prices and then the consumer ends up buying online, i think the in-store retailers are matching prices more frequently than not. and so while they might keep the sale, it's possible they're keeping it at a reduced margin. i think that's the unknown issue at the moment, as we wait for the final number. >> i guess the other question is, who wins? which names are doing better on the growth in mobile and online versus -- >> so that's another good question. so the pure online retailers, like amazon and ebay, have figured out mobile early on. and apps are the key, because more than half of all the time online now is spent using an app. so if you don't have an app on

the phone, and if it's not being used, you could be in trouble. and what's interesting, this season, is that both walmart and target have done a pretty spectacular job developing apps that are really being used extensively. so they, i think, have figured it out, and are really copying the pure play guys. >> i'm much more interested in your stock and your business, and what you're doing. you're partnering with google, of course, so they can prove to their clients the sort of traction that they've got. and the pitch battle is on for you against nielson, for cross-platform. the stock is up 64% so far this year. you've done phenomenally well, $1.6 billion now is the market cap. what happens next to your business? there's some talk that you might do a deal with renttrack, which is in set-top boxes. can you talk to us about that relationship, whether you're taken over, whether they're taken over, how you better position yourself against nielson? >> i really can't talk about

that, that particular relationship, especially given the time we're in right now, in a quiet period. >> so there is some sort of discussion with them? >> i'm not saying that, i'm not saying that either. but we are certainly looking at the opportunities that exist to measure multi-platform behavior. that, to us, is the key for the future. so it's no longer just measuring television alone. it's measuring television in conjunction with the desktop, in conjunction with the phone and the tablet. and that's what we have built. >> but you've got the pc and the mobile, as we just saw? >> the pc and the mobile and now we've added television with a combination of set-top box data, which is plentiful. as well as we get data for individual on tv. >> the important thing to note here is i think your market cap of $1.6 billion is very small relative to the amount of money that will shift when we get solid data, for advertisers, on those platforms. so my question is, who bulks up

in the industry, and how do they do it? >> so, that's a good point, in that the total market for digital measurement is certainly smaller than the larger market that encompasses television, right? so if you look at ad spending online, it's equivalent today of about 60% of all the money that goes into television. so television's a bigger market. but i think as things evolve here. and et will me stress that i think that multi-platform measurement is the key, because what we're finding is that if you take an ad plan and deliver it on one plafrl, versus taking exactly that same number of add impressions and spreading them, you get a bigger bang for the buck. >> my question to you, which i'll return to one more time, briefly, is there m&a here? can you do it organically, or do you need to bulk up and take one another over? and how does that play out? >> i think there's a lot to be done organically, but i think in any market where it's dynamic and the technology is changing, there are also m&a

opportunities. but from our perspective, we've really developed the technology. >> just wrap it up for a minute, with the economy. we saw 3.2% growth in consumer spending, in today's gdp number. do you see that in this holiday shopping season? >> absolutely, absolutely. the season started off with a little scare. you'll remember the nrf reported there was an 11% drop over thanksgiving, which turned out not to be the case. i think what was happening is that at that point in time, there was an acceleration of spending to online, that wasn't clearly understood. we've seen growth rates since thanksgiving pick up. we're now seeing about a 15% growth rate off of desktops alone. and when you add on mobile, it's going to push the growth rate for the season up to around 17%. so it's very strong. and i think that the numbers that you referred to for offline spending, you put the two together, the consumer looks in pretty good shape at the moment. >> we'll leave it there, thanks for the insight.

co-founder of comscore. when we come back, nat gas continuing its losses. you can thank some of these mild temperatures, pushing it sharply lower. we'll go to the energy pits in just a moment. dow's up 61. this is a burrito made with chocolate, soybeans, and apricots. what kind of chef comes up with this? a chef working with ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm.

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this week we're looking ahead to the new year, giving investors a playbook on how to cash in 2015. jackie laying out her predictions for the energy sector, but first let's see how she fared with her picks for this year. she predicted that moving crude by rail would be a big deal this year, and she was right, oil shipments by rail rising for the first ten months of the year. she also predicted easing sanctions on iran would not have a substantial impact on production and prices. we're going to give her half credit on that. iran's overall exports are still pretty limited, but japan and

india have seen big increases in iranian oil in recent months. and she predicted that exxonmobil shares is would continue to rise, uh-uh. exxon down 7% on the year, one of the worst-performing stocks on the dow. what is jackie looking for in 2015? here's a look. >> energy prices began a wild ride in 2014, increased north american supply, coupled with waning global demand pushed prices of domestic and international crude significantly under $100 a barrel. here are three predictions in energy for 2015. first, oil prices will bottom around $50. with the u.s. producing more than 9 million barrels of crude her day and opec putting out 30 million, prices will continue to decline in 2015 and producers will sacrifice margins to hold on to market share. low oil prices will take some time to trickle into the economy, but they will give markets a boost. and that will spur demand, which

will then help prices rebound. second, opec will lose influence. within the first half of the year, opec will be forced to cut production to help stabilize the market. key member saudi arabia has more flexible on pricing than other members, like venezuela and ecuador, but as more supply comes out of the u.s., opec's influence on the global market will diminish. third, stocks said u.s. producers will see some volatility. in an environment where prices move lower, produces like exxon, chevron, and hess will continue to feel pain. they'll manage costs in the face of declining prices, but those efforts won't be recognized by investors. after oil bottoms and begins to rebound, energy stocks will be loved again. >> and jackie deangelis joins us to take a closer look at her predictions for the new year. jackie, oil has not hit 50 yet. are you hearing that it actually is headed that way? >> hi, carl. that's right, we're bouncing around 55 with wti, bouncing around 60 on brent right now. it's a temporary stabilization of the market. but traders are saying we could

potentially go lower in the new year. this is a first half, second-half story. we could see that $50 in the first half. and i said around 50. we could be in the 40s as well. but then we think the supply/demand equation will balance off and those prices are going to come back up in the second half of the year. >> plus, you've got what boone said on stock this morning, pretty interesting stuff. jackie, great, thank you so much. for more on the energy space, let's bring in peter amoundio, joins us from the i max. did many people see that move coming yesterday? what was up with that? >> in natural gas, it's all about supply and weather right now. and what happened is, with supply and weather, it ended up making the market look technically very weak, like crude did in the very beginning, in its decent to the downside. you have a lot of room on weekly and monthly charts to the downside. ed and i would expect, below these levels, you should test at

least 2.50. >> are there players who have taken it on the chin in crude and now taking it on the chin in nat gas. that's not the way you want to end your year? >> maybe long etfs, that's for sure. but i think right now that you definitely have to have bear sentiment in both. it looks like in natural gas, this is just the beginning. and as far as crude goes, we finally had a stabilization, and i think this week, on the heels of the holiday, that it may not make it stand this week. but you're always subject to a high-volume sell-off in crude, at any time, to brings us down to test around $50. >> $2.50! that's quite a prediction, peter. pretty steep fall, even from these levels. what's going to drive it? is it the warmer weather and the oversupply? and if it is, how oversupplied are we? what does that glut look like? >> well, in crude oil -- >> no, no, no, we're talking about nat gas. because you mentioned thee$2.50 which is a pretty sharp drop

>> in nat gas, marcellus gas is $2.50. there's a glut of nat gas right now, so without weather, it's going to head to the downside. but you us a have to keep in mind, this is the natural gas market. you're going to have a lot of shorts in this market because of how it looks technically, and if at any time you do get cold, you will have a quick move to the upside. >> boone pickens was on "squawk box" this morning, talking about house rigs would be basically shut down with a nine-month delay. can you give us some idea of historically where $2.50 is? is that a drastically ridiculously low price that would actually gouge the industry quite severely on supply, once people have had the chance to make the decisions and they feed through? >> i think what really needs to be looked at is production budgets. there might be a lot of fluff in them. they may turn around and start cutting whatever they're paying to different people for services, that have to do with their production. and you have to look at their budgets, to see if they're

really true, and see if there's any fluff in them. >> peter, how much is the strong dollar having an impact on all of the commodities prices right now? it's not just gnat gas and crude oil. we're seeing it in gold and silver and a lot of the commodities. >> i've said it many times before, if you go back to 2008 and 2009, in 2008, you had a very weak dollar. during the housing crisis. in 2009, the dollar picked its head up. crude oil fell all the way back to $33. and that's without north american shale and bigger demand abroad. >> i assume, when it comes to boone calling opec no longer a cartel, but a trade association, you agree? >> absolutely. throughout the years, with all these free and open markets that are traded, that it doesn't mean as much, and especially now with the role the u.s. is playing in the north american shale production, they definitely don't have as much say as they used to. >> yeah. unbelievable. just six months, what a turn of

events. peter, thanks for your time. peter amandio. >> for the first time ever this morning, the dow broke through 18,000 and then surged substantially above it. cometh the hour, cometh the man. art cashin next on cnbc. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out...

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almost an hour into trading. good morning. the dow is above 18,000. here are the stories we're watching at 7:30 on the west coast, 10:30 on wall street. a blowout figure on gdp, coming through to an annualized rate of 5% for the third quarter. but the university of michigan's consumer sentiment index coming in at 93.6 for december. that's slightly below mid-month levels. but on a final basis, it's the best reading in almost eight years. sales of new homes fell for a second consecutive month, down 1.6% in november, according to the commerce department. and chesapeake energy the the biggest gain on the s&p 500, up 7%. closing its deal to sell shale assets, to southwestern energy, for about $5 million. >> while the dow charges to some new record highs, who have been the biggest drags on the dow. don chu has that. >> let's take a trip to our land of misfit stocks. it is that time of the season, and if you look at what's

happening with the overall markets, there are a bunch of stocks that have missed the rally as the dow has hit record highs. you can see here, already up 72 points just off its session highs. there are a handful of these names that have now been negative for the year, despite the dow's record move here to this particular level, 18,000. let's take a look at some of the names that have been dragging. there's a big one in aerospace and defense. when we talk about dogs of the dow, oftentimes it's about dividend yields. and in this case, boeing has an almost 3% yield. boeing one of the biggest drags, but take a look at some of the other big names. the other ones like boeing, exxonmobil down 8% year-to-date, dividend yield of 3%. then you move on to another big one as well ear, move from exxonmobil, one of the oil stocks here, to what's happening with an ibm, what's happening with other stocks again. so as you look at what's happening with the dogs of the dow, if you do look at some of these names, it is important to note here that some of the

underperformers from this past year are some of the ones that oftentimes may lead comebacks. so sarah, as we talk about what's happening overall with the dow and the underperformers, remember, the ibms of the world, the boeings, the chevrons, some of these names are the ones that oftentimes investors look towards if they're looking for value hunts. and in this case here, dividend yields may play a big part of that picture. >> and energy as well. thank you, dom. >> joining us, art cashin. while we see the dow above 18,000, that is the showstopper. the nasdaq, and we like your hat, too, by the way. >> i finally got a chance to wear it. >> last time you broke it out a little too early, you jinxed it, i think. >> well, we didn't put it on, though. we wait to 18,000 to put it on. >> start, we have the fast dak negative and the s&p is not up a whole lot. about three points. what does that tell you? >> it's a little troublesome. i mean, yesterday, it was the s&p kind of holding everything

back, failing to get really much above friday's highs. so you like to see real confirmation, particularly when you get to a nice round number and a celebratory mood like 18,000. and we would like to see the s&p kick in and try to get to 2,100 on its own. >> is it the reaction to that 5% gdp number? that surprised everybody? that was shocking. i mean, we've been debating here at this desk, could they sustain gdp above 3% for a long period of time? and, this number was a blowaway number. and showed that the consumer was getting involved again too. >> and what's good about it, we saw a positive reaction on wall street, with a positive economic number. good news is good news again. breaking away from that sort of perverse attitude around quantitative easing, that the better the numbers, the more fear there was about higher rates and losing qe. >> and we're seeing rates, on the short end, inch up without the market being too spooked by it. so we'll see, but we'll wait and

see if yellin comes across sooner than june. and see where we go. i have have been doubtful they'd do anything at all this year, but with blowout numbers like that, i don't think they can stand by too lock. >> you're an avid watcher of david tepper's comments, more of them this morning, making comparisons to a year that we liked but also didn't like. what was your take on those -- that setup, i guess, 99? >> well, it depends, you want to do the cup half full or cup half empty. if he talks about them being susceptible to missed pricing, what you're saying is you could have a rocket shot to start with. and then you'd be vulnerable after it. but in the meantime, that rocket shot can make somebody some money. so, you know, i don't think he sounded too terribly negative. cautionary, but not negative. >> can we be really simplistic about and say, don't fight the feds, so for as long as the fed is not going to raise interest rates or indicating that it's going to raise interest rates, as deutsch bank points out, no hawks on the fomc voting next

year, they've all gone. so for as long as they are bullish and dovish -- or as long as they're dovish, can you assume the market will rise? >> it makes very bit of good sense and i've been pounding the table here about seasonals, the year-end seasonals are very, very strong. next year ends in a 5, and as silly as it sounds, years that end in a 5, middle of the decade, have a propensity to be up. the bulls have a lot of things going on their side, including the fed. >> nasdaq is the only major average not up for the month. it's in the red today, on a good day, these biotechs, art, the game has really changed here in the last couple weeks of the year. >> i think people are looking in a new direction. and while it is not terribly frightening, it -- this lack of confirmation of the move in the dow is somewhat frustrating. we'll keep watching it, with the seasonals working for us, we're looking forward to a merry christmas. >> some wanted to nitpick at the

gdp number, looking at within the consumption column, a lot of it health care. does this feel like a clean number to you? >> no, as i say, it was tremendously surprising and i think we'll see if not second thoughts on it. you won't see revisions, but you'll see second thoughts on it. >> does the stronger the santa claus rally get, the more momentum it gets as we get into the year end, mean it's going to be a bumpier january? >> i'm a little concerned about january. i think we'll get through the first week or so pretty well, but after that, mid-january can be a little bit of a problem. >> wasn't that just an argument, though, that because the selling at the beginning of december was so heavy and the falls swore great and the mutual funds didn't buy for a while, that a lot of that will be delayed action into january, particularly as there were so many corporations due to buy back their own stock? presumably those programs now spill over. that's in your timing turns? >> i think that's valid. the part about the mutual funds, however, i'm not so sure of.

they've been working more in this year than early part of next year. >> finally, your annual poem is out. are you able to -- can you read these two out loud? you got your glasses? just those two. i just want to get a reading from the poet. who's actually a very good poet. >> putin scooped up crimea and some parts of ukraine, but an oil plunge and sanctions are causing him pain. in europe, a song contest was won by a nun, and the song that she sang was, girls just want to have fun. >> that's why we love you. art cashin, in his cap, and writing his poems. we'll look forward to your singing tomorrow. >> thank you. >> here on the floor of the new york stock exchange. when we come back, facebook, another all-time high and a market cap of $227 billion, bigger than chevron. why is it on such a roll right now and should you actually be buying in? we'll talk about that, with the dow up 72. >> arthur, have a good christmas. dad, i know i haven't said this often enough, but thank you.

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the dow above 18,000, down all sectors but one in positive territory. one the flashing red, with considerable falls. health care. dom is back at hq with more. >> so, simon, health care, like you said, the only sector in the entire s&p 500 that's not participating in the rally today. leading the way lower, our shares of celgene, as the biotech sells off. also alexion, regeneration, and gilead lower as well. gilead said express scripts picked its rival, abbvie's version of an important hepatitis "c" drug. so a lot of story lines playing out in health care, specifically in biotech, but biotech was one of the top performers going into this particular session. so coming off a bit from its highs, carl. >> dom, thank you very much. let's get to the cme group and check in with rick santelli and get the santelli exchange. hi, rick. >> hi, carl.

on a day where we had a robust final look at third quarter gdp, my guest, mark skousen, is just perfect to have on today. welcome, mark. thank you for coming. >> glad to be with you. merry christmas. >> merry christmas. listen, we've talked in the past, gdp, basically a measure of all final goods and services, represents, you know, measures two-thirds of the notion of consumption within the u.s. economy. but you think that we should move on to a better measurement in this regard called gross output. explain to our listeners what you keep telling me in e-mails. >> yeah, gross output is this brand-new statistic that's coming out every quarter, along with gdp, which is a measure of all stages of production. you know, gdp leaves out a huge chunk of the economy. first of ally all of the b-to-b, business-to-business transactions, it's a measure of production, the value of

production in all stages. and the supply chain, in essence -- and that's left out of gdp. so that leads to this misnomer that's frequently repeated on cnbc, that consumer spending drives the economy, because it's two-thirds of gdp. but it's less than 40% of gross output, when you pressure economic activity at all stages of production. so this is a new statistic. i consider it a great triumph in supply-side economics, because it's a way of valuing the importance of business spending, which is almost double the size of consumer spending in the economy. >> let me interrupt you there, okay? now, my guess is that you've gone back and kind of looked at and tested how history would have treated the gross output. are there any issues with regard to the economy, whether it's the medicine applied or some of the u-turns we made, we shouldn't

have made, that if monitoring gross output would have been the more economic, fundamental friendly, we might have been for insightful. can you give me some examples? >> yeah, because, for example, in 2008, 2009, gross output actually declined 6% compared to only a 2% drop in nominal gdp. so it's much more volatile. and in fact, in the last couple of -- since the recession has ended, gross output has been growing faster than gdp, which has made me more optimistic. in fact, it doesn't surprise me that gdp is up 5%, because in the last few quarters, gross output has been growing faster. and this is very traditional, as part of a recovery stage. so i'm quite optimistic about the economy. so, economists and pundits on cnbc should also be looking at gross output. just google gross output and you'll find out lots of data that i have written about this, that suggest that the economy is

growing much faster and that business investing is a much bigger factor in economic growth. >> well, i'll tell you what, we'll have to leave it there, mark, but after looking at the weak durables that was the counterpunch to the very strong michigan and strong gdp, embedded in weak durables was weak investing. this is indeed good news. i'll monitor it and make sure that i do and i want you to come back over the quarters ahead to see which picture paints the most accurate portrait of the economy. merry christmas, happy holidays, and back to the gang on "squawk on the street". >> thank you very much, rick. up next on the program, the pulse of the night. the businessman who creates some of the most iconic bars and lounges in the country. scottgerber will be live here at post nine to talk about what's working this holiday season, to keep those cash registers ringing in the run-up to new year's eve. "squawk on the street" will be right back.

as the dow sets up record highs, above 18,000, a little less action for the s&p. there is your heat map for you. as you can see, much more on gainers than decliners. all of the major groups are in

the green, led by energy and materials. health care is bringing up the rear. as we look ahead to 2008, here's robert frank with his predictions for the luxury market. >> reporter: while 2014 was good to the rich, it may end up being a mere warm-up, with soaring fortunes and spending of the wealthy in 2015. >> rising stocks will help create a record number of american millionaires and billionaires. >> reporter: the number of american millionaires will likely top 10 million next year, and the world's billionaire population will near the 2000 mark. but after years of new wealth coming from china, the middle east, and other emerging markets, in 2015, the u.s. will dominate millionaire and billionaire production. most new billionaires will come from tech, especially innovation in health and consumer apps. the feverish bidding for art, cars, wine, and other collectibles may cool with slowing demand from overseas. >> real estate prices may soften

with rising inventories. >> luxury condos in new york, miami, and l.a. will see the biggest gluts and the number of homes priced at $100 million or more will start to pile up. spending on super cars, jewelry, the with christmas and new year's eve days away. drinking venues come. it says here hot toddies are the name of the game this year is that right. >> i love those. >> especially with the weather

cold and everybody wants to warm up a bit. it's nice to have that nice hot toddy. >> is it like it used to be in the days of the bling. >> there is still a lot of champagne. that's one of the things people drink for new years. >> and what if they want other stuff. >> i think people are partial to bourbons and te key lay tech la. >> -- there are not enough cashiers and the lines were extraordinary. how do you staff a bar on new year's eve? how do you know what's enough bar staff? what's too many. must be quite difficult. >> it is but in reality new year's eve we have a lot of pre sales more so than normal. so we are have a good gauge.

as opposed to a normal night where beam are just coming in. >> is there a ratio one bar minnesota per. >> we don't have ratios like that. we'll have a serve at a table for like ten people. but we like to get our drinks out quickly. and. >> reporter: what i notice about new year's eve booking restaurants and bars is the price goes up. tremendously. 100, $200 in manhattan. how much of that is a profit driver for you just that single night? >> i think it comes down to the real estate part of it. how much can you commit to people. obviously new year's eve is a big day. do our prices go up? you have to the make a reservation and there is a cover but a bu that's because we have limited capacity and only so much we can do to manage that business. >> can rents go any higher than this? >> i'd like to think not.

but unfortunately i think they can. rents just keep going and going. and with the prices people are paying for real estate they have to drive the rents. with us it's a little different. we have the opportunity to partner with hotels and bring added value. >> not just driving potentially the food and beverage revenue but the occupancy of the hotel. and if the value of that real estate is rising i imagine the hotel owners will increasingly say come on we can get money doing something else. >> i think what i a see is they want a bigger piece of our deal. before what kind of added value can you bring to the hotel. now they are saying you are bringing added value but the real estate is worth so much you need to be able to pay us more. >> can you afford that. >> yeah. obviously it eats into the

margins. but, you know, we're in it for the long-term and we balance the things from the little less profitable and the home runs. >> happy holidays. >> happy holidays to you. >> dow is up about 72. let's get to dominick chu. >> we're watching shares of the aqua and financial. the em battled mortgage services firm. executive chairman resigned, the stock dropped at 15% today. and oppenheimer concerned about the company's earnings visibility, also weighed in on this particular stock. it is currently traded down at 16%. brings their year too date down 75% this year. >> ouch. let's send it to john forn fort

a look at what's next. >> facebook's near all time hies what. it might tyke to go even higher in 2015. also the latest on the sony hack. maybe a pretty high profile viewing coming for the interview, that movie a that has been delayed as a result. and yahoo's tumblr, perhaps more value than meets the eye. we'll look it into cometing up

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. all right we are watching a few movers here as the dow is well above 18,000. s&p 500 is still green. not as much. -- mountain, forced to recall more than 6 million machines. this is one of the best performing stocks of 2015. >> keurig is down. chesapeake is one of the top gainers today. partly because you have this 1 billion dollar share buyback. and also because they finally inked that deal to sell some shale assets.

up 6%. the biotechs down that other pharmacy managers are getting more aggressive in pricing. for those worried about healthcare costs. and. >> the head line for the day and for the week so far really has to be 5% economic growth. that was the revision for the third quarter. that means the best back to back quarterly gross for the u.s. since 2003. you saw the reaction in the the dow, above 18,000. only took six months to get from 17,000 to 18,000. >> we're kind of on track for that steady non volatile fed supported rally. >> and lactic acid tthere is th.

>> good morning, 8:00 a.m. at sony. 11:00 a.m. here on wall street. "squawk alley" is live. welcome to "squawk alley" for tuesday. joining us this morning, henry blodget. editor, founder ceo at business insider. kayla tausche is out. jon fortt's here. sarah said a moment ago. gdp