good morning, america. hello to the world. we're broadcasting live here from new york today as we're working and most everybody else is not in europe. happy boxing day to all of our friends overseas. anywhere here in the u.s. doesn't know, boxing day is celebrated in europe and parts of africa and europe on the day after christmas. it used to be a day when servants would get gifts from their employers. in english premier league, it's a full day of football fixtures. matches all day long. our sister network will be broadcasting the chelsea western game, manu/new castle and it's a

big day for soccer. it's also a regular working day here in the u.s. sony "the interview" opened up as planned. it was released online and at 331 theaters in the u.s., mostly independent theaters. sony has said it will release ticket sales later today, but there have been no reports of problems at any of the theaters or with online distribution. north korea is accused of launching a massive hack attack against sony to stop distribution of the movie that features the killing of their leader kim jung-un. >> we thought this might not happen at all. >> welcome to our neighborhood. we live around here. >> we've been here before. >> well, the movie seemed to go off okay. no problems have popped up for

sony as of yet. elsewhere, sony's online play station store and microsoft's site suffered disruptions on thursday in a possible cyber attack. both companies say they're aware some users were having trouble signing on. an obscure group called lizard square posted online that it was responsible for the trouble with those video games. they were open in business in japan and china today. the nikkei, up today about 10% year-to-date, up by about 0.5% here and just flat for most of the day. one easy way to play the japan trade here in the u.s. is through the msci figure ewj. not as strong, down a little bit more than 5% so far for the year. and the shanghai market was, you can see here, as well, up nearly 3% today. it's also up about 45% so far in 2014. the ishares china tracks china's

biggest 25 stocks. it's up around 35% this year. so let's get a check off how the u.s. shares will open today. futures are showing some signs of life. the nasdaq up about 68 points and we look to build on those preholiday gains. we have four full days of trading left in 2014. the s&p 500 settled at their record price 51 times this year. it's up more than 12.5% so far in 2014. the s&p also hasn't had four straight down days all year long and that is a record in and of itself. today, the dow will open and year-to-date the dow is up 8.7%. procter & gamble, visa, disney, cisco systems, home depot and travelers are all at multi year

highs. here with us to talk more about the markets are carter wurth and ken cayman. and we want you, our viewers, to chime in today. where will we go in the first quarter of 2015? will they rise or will those market fall? go to krn r cnbc..com/boat. thank you so much for joining us here on this early edition. i want to talk about how the markets are steadying up. the santa claus rally looked like it was going to start the day after christmas and looks like it can continue. but there are some reasons why some traders are more pessimistic about what was happening. ken, maybe we'll start with you. what is the outlook as people start to look towards 2015 after a nice run of stocks over the last couple of years? >> it's hard not to think you might have taken some from next year into this year. but i think as we look at next

year, especially in the beginning of the year, i think we're going to see potentially a choppy period for markets as people start focusing in on the backside of this story. the sectors in the market do not do well when oil goes down. the fact that labor markets increased a lot on the back of, you know, the energy markets, also. so i think we're going to get through some of that in the beginning of the year and take a rest from this huge run we've had of late. >> one of the big drags on the market overall has been these the falling prices. it drives costs down for consumers and sectors out there. but the energy market, can we consider that drog to be even more pronounced in 2015? >> our lunch is that it's largely played out. the real question, at least by our work, is that is the bull

market intact? on the headlines, it's been a good year. if you take s&p or whatever indetective you might refer to, the dow jones, like the russell 2,000, all the s&p and so forth. the broadest measure of equities. it's up about 14% on the year, about -- but the average stock is up only four and the medium stock is actually down. it's not really as much of a bull market as it would appear because all of these market cap weighted industries are being driven by super cap names. so we think a lot of the stall that has gone on after a big bull advance last year, because 13 was the big year. this has been a turning year. and we think we get more turn in '15. >> now, when you look at the charts, one of the things you look for is whether or not these patternes have repeated themselves in history. so as you look towards 2015, can you say you are seeing signs the bull run is in for a bit of

pause? are we do for a correction? >> we had like four down days. by all accounts, that down draft, a 5% sell-off coming into the last week and a half, these are the vibrations that start when you have a consistent ball that's now quite mature. >> so let's talk about this. if we look at what's happening in 2014 to carry over into 2015, there have to be some place that's outperform the market. one of the things that's been nice is that certain places fundamentally have outperformed others. as we look towards 2015, where do you think the outperformance comes from for the u.s. stock market? >> i think you have to look at financials. if we start seeing interest rates normalize, whatever that means in the future, that financials have some pricing

power. i think you're going to look at technology doing very well. i think also the consumer type things. i think the huge dividend is the second half of the story. no one is running out because they saved $50 last week, but at least they're not getting a cumulative effect of people not saying my budget for energy, gas and home heating has been reduced. plus the input costs of so much manufacturing is energy. so i think these are stories that are going to lump some real positive events into the end of the year. i think we could see a choppy period in the beginning of the year. >> carter, where would you stay away from in 2015? >> the least attractive here would be industrials, one.

and consumer staples. we think the strong dollar hurts that situation a lot. we think the valuations are stretched. we don't think there's a lot of opportunity here. >> guys, based on the 82% of people say that stocks -- will stocks rise in the first quarter of 2015? 82% say no and 18% say yes. so four out of five people think the markets are due for a pullback. guys, thank you so much. now, last year, it was a shipping mess. you can blame the weather all you want. blame retail and online shipping strategies, everything. this year, it looks like things went a bit more smoothly. having spring-like weather in most of the nation didn't hurt things.

tisch is in dubai right now. satish, how did you -- i mean, if you look at u.p.s. and fedex this year, you've got to say that they did better than the same time last year, correct? >> by a huge margin. the service in the last couple of days of delivery during this week was at 99 many 6. no service industry operates at that level. i think all of their employees must have felt great to provide a merry christmas for everyone looking to have that experience. >> now, fedex and u.p.s. had some seasonal hires this time around. how much can we expect at least the logistical issues to be resolved because of the seaso l al hires and do they carry that

same efficiency into the first quarter of 2015? >> the additional hires, 50,000 at fedex, 90,000 at u.p.s., and when you consider they have total of 300,000 employees at u.p.s., that's a part of the employees. that obviously added a lot of cost to them. but it goes a long way to managing the volume increased that they have which could be up to 30%, 40% increase. and i think going into the first quarter, a lot of the employees are not going to be part of it. one is going to drop down to volume for both of them. however, not having the problems that sort of comes at this time and then have to be corrected afterward, they won't have to deal with that which is a huge relief for every employee at these companies that they'll be able to operate at the normal level. >> really quickly here, as you look towards the metrics that investors will be watching in the coming months, what are the most important things to watch for out of fedex and u.p.s. as we go into earnings season next

time around? >> i think what they need to look for is did they achieve the volume levels that they were staffed for? they added all these people and technology in mays to handle a certain volume level. if the retailers, because the weather was much nicer, limited some other people from online, but ended up goss going to the store, then they may have had more people than the volume that was needed for and as a result it could be impact on the earnings. however, what i can tell from you my years of working with industry is when you have a service problem, in addition to customer dissatisfaction, the cost of recovery is much greater. you will see a better result from the same quarter as last year. these companies are such a large consumer of oil. and the decline in the oil price is such a flavor of stocks, they

should look at the transport as beneficiaries of that. >> that oil price is going to drop out in a lot of industries. our thanks, satish jin did he l of the sj consulting group. now, moving on here to what's going to happen, when we come back here, we've got a buy who i would imagine really got what he wanted this time, at least for christmas. see who bought this $70 million mansion so high up in beverly hills that you can see right down on the lights of l.a. we're going to give you the name, show you how he made his money and take you inside this house. it's really some amazing stuff here. and a hot topic in the last several weeks here, should police officers wear body cameras? in one city not too far from l.a., they're already wearing those body cams. see the sights and sounds of police officers see up close next on "worldwide exchange."

technology has enabled a lot of this stuff to happen that whenever inspiration hits you, you'll be able to find a market somewhere for it. but on the minus side, when are we all going to sleep? we're awake right now. through the magic of television, i'm back here at our cnbc

headquarters. los angeles has announced it will kwequip 7,000 police offics with body cameras. our own jane wells reports now on one police department not far from los angeles where the officers are already armed with body cameras. you're about to see sights and sounds from the war on crime that you've never seen before. >> for the last three years in realto, before ferguson, before new york, before cleveland, these police officers have been wearing body cameras. >> this is what my camera is seeing live right now. >> the chief thought cameras might build community trust. >> the whole experiment wasn't

figuring out whether the camera was the right camera. it was really more to evaluate the impact that the cameras would have on law enforcement. >> the chief used grant money to pay for assistance from t.a.s.e.r. there was almost an 80% drop in complaints and a 60% drop in use of force. sergeant josh lindsay helped roll out the program, which consists of a camera, a battery pack you tap to turn the system on and a smartphone app that let's you see your shot in realtime and add information. after each shift, all videos are downloaded and occur rated automatically using t.a.s.r. software. >> has it modified your behavior? >> absolutely. >> but the sarmt says the camera has affected the behavior of the public. >> the couple of people have mentioned it to and i say, just so you know, i'm recording everything. that even though they might have been a little angry at the time

or whatever, it seems like it's calmed them down just a little bit and they've gained a little bit of compliance from them. >> i asked this man pulled over for speeding what he thought about being videotaped. >> now on both sides of the party, we know that there's video evidence. it's no more of a he said she said. it's more of a -- now there's proof, you know? >> hey, douglas, step out out and see your kaeps hands where i can see them. >> the chief says some video clips have exonerated some officers, but led to disciplinary against one. the cams only work if you turn them on. >> can you delete? >> no. not at all? >> not at all. >> chief ferrar eventually hopes to see video streaming in realtime to dispatch or supervisors. however, it's clear cameras don't always stop misconduct. and rialto says this sa tool,

not a solution. >> if you have a problem with your community, a camera is not going to fix it. >> it could be abdomen interesting theme in the coming months here in the u.s. 2014 saw a rise in spec mansions. one l.a. home received a lot of attention if it was going up and just found a pretty famous buyer in the business world willing to pay top dollar for that real estate. here is cnbc's editor rob frank with more. >> marcus pearson is the ultimate bachelor, 35 years old, a bachelor and now he has the ultimate bachelor pad to match. he just bought this home in beverly homes for $70 million. it's 23,000 square feet with eight bedrooms and 12 baths. it has a massive lounge with a wall of glass that looks out on an infinity pool and a view of l.a. and the ocean. there is a hydraulic lift that can bring your you bughati into

the living room. it hats three bars, two for drinks and one for candy with $200000,000 worth of confection. from the art and the furniture to the cavala table settings at $3,700 each. all of it is included. so persons can move right in. >> now, just think of the parties you could throw in a mansion like that. now, as we hit the end of 2014, most of the reporters here are predicting what's ahead in 2015. at the same time, we're looking back at what we said would happen in 2014. i'm a man that is not afraid to say i was wrong, so i'll give you my scorecard for the year that was and show you where i think we're going next year in the world of sports business. plus, gwenth's new digs from the business to the stage, it's

a candid interview when "worldwide exchange" comes right back after the commercial break. 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.

this week, we're looking ahead to the new year. i took a look at the sports world. but first, let's see how he faired with my pick for 2015. keep in mind, i'm a man that clearly knows when to admit that i was wrong. last year, i said those monster major league baseball contracts were a thing of the past.

strike one for me. john carlos stanton signed a monster 13-year b $325 million deal this offseason. now, i also predicted that the nfl would embrace next generation media technologies up. i was right here with the league introducing that nfl now product this time around. finally, i said 2014 would be a ticking point in major league soccer here in the united states. we'll call it half right. mls tv ratings rose, but they still can't come anywhere near with competing against the major leagues here in the united states. we'll see how they do next year without star landon donovan. now here with my predictions for 2515. so listen up and let's get the game started. from a-rod to donald sterling to ray rice, scandal plagued the sports world in 2014. here are three bold predictions for 2015. the nfl crosses the pond.

after sellout crowds for three games at whimbly stadium in 2014, the national football league will announce the first ever international franchise in london. and weir not talking about nfl europe part two. with more than 8 million casual nfl fans in the uk, there is demand &. student athletes cash in. as ncaa revenues grow, so will student athletes. in 2015, the ncaa will continue to loosen rules to allow college athletes the opportunity to get paid. and not just scholarships, but also a cut of the money they help bring in to each school. this could away game changer. two words, triple crown. the year, 1978. the horse, affirm. the last one to win the most coveted distinction in horse racing. 12 horses since then have had a shot, but all fell short at the belmont stakes and it's torturous mile and a half track.

in 2015, the triple crown drought ends. all right. so they're pretty bold predictions. they may not come true but hey, i'm going out on a limb there. gwenyth is an entrepreneur taking on the likes of martha stewart with an online site and investing in a chain of blow dry bars. cnbc sat down with her for an exclusive interview. >> what does it mean for you two to be partnered? >> you know, i think that my strengths are in anything aesthetic. so the look of the salon, trends, social media, and i also -- i'm also very interested in the business aspect and i've learned a lot from ari. it's been a fascinating experience. >> why the blow dry bar business in general? how big do you think the business could be overall? >> for me, it's an amazing service as a customer. the idea that you can go in and

get a 20 or 30-minute blow dry and be out the door and ready for your whole die of meetings and parties, i think it's amazing. >> i'm in the midst of having strategic discussions with several large well known retailers that are allowing us to put stores inside their stores in order to generate the traffic this they need as a result of online shopping. >> you just hired a new ceo away from martha stewart. is thislty of talk about you being the next generation martha stewart? >> well, i don't think of ourselves as that. i think this is a very modern lifestyle brand and it's not autonomous or collective of women. and i think it's really about, you know, we sort of call it contextual commerce part. there's a lifestyle part and a customer start and we've weaved them together. and, you know, obviously, martha

invented the category and we have a lot of respect for her, but we don't consider ourselves -- you know, it's a very different business in my mind. >> what did you make about her comments about you? are you flattered? >> i'm incredibly flattered. we're a very mason business. we're just growing and it's amazing that she would rather us as competition. >> what's next, will you continue expanding your empire? >> you know, in my dna, i'm an actor. it's kind of what i'm born to do. but i do believe women can have very different chapters in their lives. in this chapter, i'm very interested in the purely side of me and raising my kids and i do try to act when you can and i really love it. hopefully, you know, it's not an either/or situation and i can do a few things. >> well, if you put $100,000

down on the spy at the start of 2014, today you would hav$2014, $112,550, not at all a bad year. see what the bill wall street prognosticators think will happen in the year ahead. plus, the boots l.l.a. bean keep in stock, why they're so popular.

good morning here in usa and canada. hello to the rest of the world. we're broadcasting live early this morning from cnbc headquarters here in the new york area. many european and asian markets are closed due to the boxing day holiday. we're getting set to trade here in the united states on this day after christmas and i hope everyone had a great holiday. here are some of the headlines at 5:33 a.m. eastern on the east coast. "the interview" opened up on christmas day despite hackers' efforts to stop it.

they mainly opened in 331 mostly independent theateres and streaming online. there are reports sony playstation system was hacked along with microsoft online dating system on christmas day. widespread problems were reported. and u.p.s. and fedex both had a pretty flawless holiday shopping season. but this time last year, both were criticized for not being able to handle the extra holiday season loads. now, the russian government expects gdp to contract by 4% next year if oil prices average $60 a barrel. a drop in crude prices brushes main stores of our currency could prompt the kremlin to cut budget expenses by 10% and tap into its rainey day fund approximately until recently, moscow forecast gdp to fall 0.1% next year. although it expects the economy to recover in 2016. let's get a check on how the u.s. markets may open up today. futures pointing higher, the s&p 500 could open by about 7

points, the dow jones up by about 65 points. and the nasdaq up by nearly 17. now, trading has come to an end in china and japan. the shanghai stock exchanges finished the day. you can see they're up by nearly 3%. the nikkei in japan, pretty flat for the day. it is, though, up 10% this year. again, though, flat for today. citigroup is selling its japanese retail banking business. the deal is reportedly worth $333 million. in october, citi said it was pulling out of the consumer banking business in 1 1 markets in order to cut costs. its japanese business has been hurt by weak demand for loans. it has about 740,000 customers and $20 billion in deposits. and you can super size it again in japan, as well. mcdonald's has said it will start selling large sizes of french fries. mcdonald's japan says it received extra fry shipments

from the east coast. frozen french fries are a leading u.s. export to japan. and standard & poors is reportedly faced with a settlement over how the company released raided real estate bonds. "the wall street journal" says the could he deal would be reached as early as next month and could result in s&p being suspended from rating certain deals for several months and could result, as well, in a $60 million fine. in october, mcgraw said it was in active settlement talks over ratings on commercial mortgage backed securities or cmbs. the u.s. markets could be a pretty decent so far. it's up 12.5% with four days of trading left. i want now to turn to the s&p ten sectors that make up the s&p 500. you can see now how they faired all day wednesday in the wall behind me here. but so far this year, from the bottom up, energy is the worst performer. down almost 9%.

telecoms down fractionally. materials up about almost 6%. consumer discretionary, up 7.5%. and industrial up 9%. financials and consumer staples both are up about 14%, pretty decent move. and technology up more than 20%. almost a 24% jump, as well, for health care year-to-date. utilities up 26% are the best performing sector in the s&p 500. and for 2015, rbc is bullish saying will s&p will hit 3,225. oppenheimer's prediction, just under that number. morgan stanley says the s&p will hit 2 275. and bmo and jpmorgan both calling for 2,250 next year. go to cnbc.com and the market insider's site on cnbc.com. now, let's bring in art hogan for more on the markets. susan boston, todd horwitz, he's

in chicago. and, art, i want to start with you because we just ran through all of the sectors that we're looking at for 2015. we do know that utilities and health care led the way this time around. do you think the market goes higher? if so, what leads the way in 2015? >> i think the consumer facing sectors, the tailwinds that the consumer has right now, not the least, you have a higher level of employment and a level of confidence we haven't seen in several years. so i think that's very positive. also, i think you still have a lot of cash in the balance sheets of corporate america with m&a activities. so i think you see that in large part in technology but certainly in the energy patch you have a lot of distressed energy companies with the commodity pricing that will probably be seen as an attractive target. so, yeah, i think that they put

a 17.5 multiple on $127 worth in the s&p you'll see something like 2225, 2250 next year, an 8% increase, tack on a 1.7% dividend to that and you've got a pretty good year. >> todd horwitz, you're a trader, right? so you got a look at the more day-to-day markets here. if we do expect the markets to go higher, can you expect it to be slow or do you think there's going to be more volatility in 2014? >> good morning, dom. i think there will be a tremendous amount of volatility in 2015. i think we've been hovering around these ten-year low eggs in volatility. could the market go higher? sure. as long as you have the fed continuing to manipulate the markets and brick in free money, it's hard to find years yield anywhere else.

but as a trader, i think we're going to have extreme volatility and i would expect to see well over 10% correction, into the market here. i think we're starting to see -- you know, art talked about the discretionary spending. the problem is if overall middle class is still in a recession and it never comes out of the re session. maybe jobs are better, but we're making less money than in 1999. the upper 2% may be able to continue this run on the manipulative part of the market. however, the middle class, i think, is going to say you know what? it's kind of hard here. they're starting to pull some money out of the markets. the energy part of the sector is only helping people pay their everyday bills. it is not bringing more money into discretionary spending. if anything goes wrong, i think we'll see a down year. the market probably does drift higher again, but i think we see, you know, 10% moves going back and forth and i think we

might get a point -- we saw in october 15th, it was ugly and scary. i think we'll have quite a few of those positions throughout 2015 writ looks like we could really break down. then you take a look at what's going on in russia. they just turned into a war with opec. there's a whole bunch of things going on that could create a big sell-off. >> art, todd has an interesting point here. is middle class america actually participating in this stock rally? if they are not, what brings them in? if they are not, are they better off staying out of the market given the volatility that happens in 2015? >> i think that's a good question. retail investors, whether they can -- and we know for a fact that the frg investor is in this market and probably more so than they have been over the last several years. 2008 took a lot of investors out of the marketplace. things were broken. it was the most significant pullback we've seen. i think that's changed. i think what gradually changes

is the fact that you can see a market and it weathers some of the these geopolitical concerns we have. whether it's russia, ukraine, or all sorts of things going on. i think the average investor does better to be in this market for nothing else other than to think about where else are you going? you're in charge of your retirement. caused 3% for most of this year and certainly probably most of next year. when you look at the available returns in equities market across the globe. the u.s. still looks like it's the safest place to be. you have a 3%, 3.5% gdp growth rate. monetary policy, tighteni inint. i think on the upside, i think it's probably the safest place

to be versus the fixed income asset and emerging markets. >> it will be an interesting conversation to have when you should or want to be in the markets with hovering near highs. >> flower, 20134 is a big year. alibaba and others saw record breakers on the state of the initial public offering now and in the year ahead. >> ipos were struggling big in 2014. 275 ipos. more than 406 companies in 2000. it includes the biggest ipo of all time, alibaba. the sector standout where words like cloud computing and big data and social media all became common terms in 2014. how about 2015? it's about technology again.

some of the big names that may go public include uber, pintrest, box, yolgdz, spotify and palens here. >> others include first data. roku, the owner of the famous set top boxes, and ferraria with chrysler. in the consumer business that casual did well in 2014, there's a big chance smackburger and shake shack could go public, as well. in 2014 cancer therapies of any kind were offered in ipos practically every week. >> and all that depends on what the markets do. even know that christmas is over, the hunt for l.l. bean's boots walks on. these boots were made for selling. courtney reagan reports on why these boots are so popular, and

how l.l. bean is trying, but not really succeeding, in keeping up with that demand. >> a product whose roots dated back more than a hundred years turned out to be the holiday gift this season. this bought does the product that l.l. bean was founded on in 1912. a rise in popularity has caused a spur in demand, particularly among yej college fashionist yas. l.l. bean is the number one footwear brand for teens and young adults. the company is doubling the manufacturing of the rubber bottom, adding a third shift and increasing the number of bootmakers by 25%. however, there could be up to a 25-week learning curve because

part of the bood boot is handmade. so some orders may want be filled into the spring. the company has seen a surge in demand for certain products, but never quite to this magnitude. most shoppers are willing to wait. >> who would have thought lumberjack sheets. when we come back, the auto sector in 2015. what's coming to the showroom floor?

welcome back to "worldwide exchange." another look into that crystal ball for the year 2015. this time, the focus is on the auto industry. let's see how phil lebeau fares in his 2014 predictions. university for phil, that battle never really banned out. so that is strike one. he also predict ed dealers offe big incentives. let's check that there. phil said sales of the tesla model s would stay hot in 2014 and all eyes would be watching for the release of the highly

anticipated model s. the model x sales were strong boosted by a huge september. but the release of the model x did get pushed back until numbers year. that is phil predicting for the year 2014? let's find out. record auto sales? probably not in 2015. but the industry should sell upwards of $100,000 before the next year. first, gps. the national average is under $3 a gallon. the energy department is predicting a national average of $240 a gallon. some admit it could wind up lower than that. low gas prices mean you can

expect another big year for suvs. in 2015, suvs and crossovers will stay hot partially because several new utility vehicles will hit the showrooms and stir the market. at the same time, fuel efficiency seems to attract the buy ers and the newest suvs are getting better mileage than ever before. finally, the electric krots wings is set so -- will elon musk's company attract as many buyers if the world is running on cheaper gas? okay. so from autos in 2015 to predictions on the drinks

business, pepsi is experimenting with the next generation of drinks.

now, in 25 years, the world will be a very different place. we're taking the opportunity to look ahead. sara reports on the consumer. today, 25 years into the future of the beverage industry, it's going to look quite different. >> shares. >> choices, personalization, customization. that's the key for bev raems in the next 25 years. pepsi is thinking about it as it prepares to role out drink finiti pods. >> what does this tell us about the future of the consumer in 25 years? >> it tells us about a number of things. firstly, consumers are going to look for much more exciting propositions. it used to be a long time ago

that you had a choice between two different types of sodas. now people have floiss doing that. >> the pepsi fire, allows you mix and match hundreds of combos. that's what alcoholic beverage drinkers want, the as well. ieng you'll see the consumer have a plan and look at what that ultimate beer experience tastes like. >> in chicago, they're experiment b with new flavor profiles. >> i think flavor companies are going to get more and more complex with their flavors, more and more natural. >> big companies are currently experimenting with natural sweeteners. consumers want to make it themselves.

that number is spebed to continue to grow. you're seeing the big companies get in on this. coke is teaming one pure green mountain. peppy is working with soda stream to allow users to make pepsi on their open. the trend is clear, personalization, do it yourself, make it natural and healthier. that is what beverages look like. let's have a look at futures. we are going to settle ourselves up for an open in the green here. our friends in lopped will be back large and in charge on monday. have a great weekend. "squawk box" is coming up right after this break.. i hope you had a merry christmas and best wishes for a safe, healthy and successful 2015.

good morning. "the interview," not getting great reviews from what i saw. a christmas outage, xbox and play station networks go down leading many to question if those systems were hacked. >> bargain hunting shoppers expected to be out in force today, looking to catch in on after holiday sales. it is boxing day, friday, december 26th. also my daughter's birthday. 2014 and "squawk box" begins right now.

welcome back to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen and michelle caruso cabrera. becky has the day off. it is a full day of trading here in the united states. santa claus came early to wall street this year. while the bulls welcomed his arrival, some feared the jolly old st. nick rally could feel some of next year's cheer. gains are getting limber. the average expectation of the top 15 strategists is that stocks are liez next year. >> here are the three big stories we are watching today. technical problems prevented play station and access users

access to jot line networks. >> some people thought this was north korea doing this. this is a different group. >> we're sure it was north korea on this? >> i don't think it was in the first place. >> who do you think it was? >> i think sony executives got a look at that movie, talked to seth rogen and franco and it is what do you guys suggest? they go what about this? we pretend that they got really mad. it's internal, anyway, at sony, right? drum up autopsy this publicity. we can't fix it now, it's so bad. did you see it? >> i'm not sure amy pascal would think that is such a great strategy. >> usually you would do something like that to be

current. are your twitter people -- >> nirnl that follows me doesn't follow you and vice versa. >> people wrant their two hours back and they're really mad about it. they're demanding their two hours of their life back. meanwhile, the guy says he's handsome and more thinner than the other guy. you know what? i don't want them to hack cnbc. we've got some e-mails that -- >> speak for yourself. >> you're right. >> key something data out of japan overnight. the big reason? the sliding oil price. output falling unexpectedly and consumption remains week. prime minister shinzo abe is expected to take off for the

near term. "the wall street journal" says the proposed deal could be reached as early as next month. a settlement could involve a suspension of the s&p from rating some deals on a fine of at least $80 million. let's check on the markets this morning. jeremy siegel. up another 55. fair value down about 29, 30 points on the dow, so the futures are up six which equates to almost 50 the. people are now, next year, what, the estimates are anywhere from 2200 to -- 2150 to 2200 on the s&p. whenever you get high single digits as what everyone says, it's either going to be ubl double digits or down.

but if you were in the business of trying -- being a good money manager doesn't mean you know year to year exactly what it's going to do, but we still ask them to do that. trying to get the direction is one thing. he's trying to get the timing and the amount. it's almost impossible. let's go to the oil markets this morning. that could dictate what happened in a lot of other markets. of course, this can happen so the dollar dictates what happens here. 56 many 30. crude, the ten-year, after that big gdp number, we had a pretty big moves. check out the dollar for those of us that are considering a trip abroad. $1.21 now. that is -- i don't see anyone below 1.22. are we looking for the teens? >> you are, yeah.

>> par. >> we're looking for 99. >> it was 90 cents, i remember, yeah. you see how we put the ruble on there now? >> yeah. if you bought it at 80, seems pretty smart. >> looking good. finally, let's check out gold. 1197, but big day this morning. know the really sure now. maybe jewelry shows. who north. >> north koreans. sony's "the interview," people were filling theaters in new york watching at mla. even though some of them, they wanted their money back. two journalists reported to fascinate kim jong up they came out to make a stir of display.

>> well, you know, i probably wouldn't have gone to see it, but the controversy got me interested. i do like seth rogen and james franco. i wanted to come out and support it. >> it's completely safe. we just walked out this morning. we're still alive. >> and most importantly, they're still alive. >> as michelle mentioned earlier, there have been some troubles with that but i think it's now getting itself resolved. >> i don't get the freedom of speech issue. it's the north korean government and they're trying to push around a private company that was just worried about -- or theater change worried about some type of problem, somebody getting hurt. >> like doing change your looifr style because of threats and things like that.

>> but if it was china and the chinese government saying, we never heard of tiananmen. but are they -- they're taking a stand for free speech in north korea? >> no. they're saying they're going to continue living their lives despite the threats of terrorists acts. >> they wouldn't have seen the movie, anyway. no. >> it's so bad. >> isn't your sense that this is like a stick up. it was sony. such a ridiculous statement saying somehow they have fought back. they were the ones that capitulated, anyway. he's like some 29-year-old -- >> weirdo.

>> i don't want to say anything about him. madeleiine albright said his da huge porn fan. loved american movies, too. loved the godfather, lost sopranos. >> there's no way to come back, guys. >> it's been three years. you can use all the time to drive my collection. china's central bank is reportedly considering easing liquidity requirements at banks. the analysts say this is likely another attempt to beautiful productive business investment without an across the board cut to reserve requirement ratios.

russia's ruble riding in trade today. the rebound come up with the government ordering exporters to sell some of their hard currency revenues. the russia central bank will provide a $10 billion loan to rescue trust bank. increasing spending amid a significant drop in revenues due to sliding oil prices. but there's no worry about financing the difference. saudi arabia has a huge stock totalling $736 billion at the end of november. that is a huge number. >> markets will resume trading today now with just four days left until the new year. santa's rally, will that be the

gift that keeps on giving? if so, will this december rally still expect to gain from next year? here with us now, christina. >> we went to -- together. >> really? >> yeah. >> do you have stories for us? >> i don't think so. >> we have mushl respect. michelle was an incredibly hard worker in college. >> are you -- and -- >> are you like a free market type person that would sell mer soul to electric hillary? >> as far as hillary goes, oh, yeah, gotta go. >> i'm starting to wane. >> that is your al ma madder, taking to streams. and chris is here.

dom, are you anchoring? >> it's one of two times we do it here and not in london. >> because they're closed over there. >> you look good. >> i appreciate that coming from you. >> totally in control is what i thought. >> i was trying to channel my pinner jill. >> like this morning when it didn't go off the rails in 20034. i'm going to say middle to high single digits. >> middle to high, okay. >> we are concerned that we're not going to see a huge run up next year. maybe not concerned is the best word. we see a great u.s. economy next year. >> is great 3 1/2?

>> 3, consistently, four the whole year. or ending up with 3-1 even would be a very good engineer. because we see some catalysts that are moving in and gaining traction, we really haven't had many consumers. we think that is changing. with the employment situation improving, consumers are feeling better about themselves. sentiment is improving. >> do you think -- and you might have a better idea because you follow these small caps. you know the january effect. i always get squared after a big run up. do you think we've sort of paid it forward or whatever in terms of gain? >> we wouldn't be surprised to see a giveback in january. >> sort of continue into the early part of january. i don't think it's going to fall off the cliff right away.

small caps have joud performed the s&p 500 this year. we think there is going to be some reversion to the moon. we think they're set up wert for a strong dollar environment. and there is some real tailwinds that are going, you know, certainly within technology which is where we should be focused next year. we have had a terrible winter. we could see a correction at some point. i don't think it's going to be out of the gate. >> at the beginning of next year, everybody who is already in starts -- >> selling them, right? the whole idea of the january effect has been anecdotalal. tkly, it doesn't hold the same

significance. >> yeah, exactly. >> nothing works. >> seriously, here is the problem. if he look at the way they're set up here, it's been very volatile. ieths been much more of a ride for small cap investors. the interesting thing here, and for me, we've watched these oil and gas kms, the large one. small cap oil and gas stocks are just this tremendous, tremendous roller coaster ride. now, even when people are buying oil and gas stocks. you know where this were gone? >> exxon. >> yeah. even if they want to take risks, they're the no willing to go out that much on a limb to take ta

risk. they want the exposure, but they would rather have it with exxon than with a small cap. >> if you're track the high yield markets with small caps, i don't think it's giving you the cue yet that you can get back into those waters. we tend to see when tech falls apart, the large caps come back first. i think what you're seeing a normal reaction. and i don't know when energy bottoms. it's not looking good right now, but we'll monitor it over the next six to nine months. >> what tells you that now is the time to get back into energy? >> i think you need to see stability. the volatility is quite high. prices are dropping almost every week. but once you see that level out, i think you'll begin to say kax epto cut by almost half. that has to play through. that impacts a lot of areas of

the economy. it's struckers, it's people who grow pipelines, so a lot of people impacted. we expect to see the consumer and there's other winners across the me. so we're positive going into next year. >> you see you nodding your head. you're agreeing on the capital versus the 2015. but it's a divergent path with other economies. we're seeing other developed markets in a different place and as a result, we're going to see differences in monetary policy. >> yeah.. and all those set up for pretty good -- if you think about what helped financial assets, it almost seems too good to be true. everyone knows, don't they?

>> not everyone knows. it feels too good to be true for many investors. >> that's the multiple on those? >> it was back in '99, but the 2015 rhymes with 99. and it goes to 30 in '99. so it only went up to 99. >> the question is whether 16 rhymes with 2,000. but it didn't get as extended.

>> we're hoping, you know, it's good for everybody i think when financial assets go up, at least the people that own them for disparity. but we have to figure out a way to start and we decline, right? >> wages are coming up a little bit. >> chris and christina. >> and dom is not going anywhere. today is expected to be a big day for sales and gift card redekzs. >> i'm taking a page out of courtney reagan's book. guess where i would be in just an hour from now? >> a mall. >> i will be at a mall. and this is a reason why. we want to talk about the consumer story.

the reason why it's going to be important is this day and the day after christmas do end up becoming the busier shopping days of the season. retailers are trying so hard to keep the sales that they've had. so when 350e78 come back and return things, they don't necessarily want them to walk out of the store. deals will be abounding, inventories will be slowing moving. and some of the retail experts we've spoken to here at cnbc think this holiday season will be a focus for a lot of investors, specifically because of traffic at malls. take a listen to why this day after christmas is such an important deal. >> 8% of the holiday spend occurs after christmas. so amid the returns, we'll see a

tremendous amount of traffic on friday. >> it may not matter that you save maybe $50 a week. but you bound those weeks after week and people have a little ammunition. guys, we will be talking a lot in the next five, six hours from a mall right here in new jersey about what these shopping trends are, what people are doing with that money and all these different ideas about how to spend gift cards and whether or not those gas prices are going to affect the way they shop. >> i think that's key for 2015. >> i save about $60 a month on gasoline because of the drop. so the question is, that's $720 for the year. am i going to spend that? >> when you go to the mall, do you have merchandise you're returning? >> i don't have any. i was lucky enough because my family got me everything i wanted to get.

>> you're just saying that. >> no. my mother-in-law grew up in a family that owned a retail shop. >> update new york. she said the day after christmas was always huge because her father said we have to get in there and get people to keep their money with us. they'll come ba and return things, but we want to make sure they get it with us and not somewhere else. we'll see if it pans out. >> what did you get, andrew? >> i got a barber coat, like a -- >> yeah, one of those, which i liked. that was a good thing. i got a couple of books, including walter ice anson's book, the innovators. i don't know b what to do with that book. my uncle gave me that. pilar gave me the coat. >> what did you get? >> how did you do?

>> i got one thing. i'm embarrassed to tell you. i have everything else. >> i got a 65 centimeter ball. >> what do you do with this kind of a ball? >> you blow it up and do exercises on it. >> you got an exercise ball? >> i'm afraid i did. i don't know what she's saying. no, there's all kinds of things. you can do squats, lean on it -- >> people in offices are now sitting on them. >> you get in shape blowing it up, i think. your core. >> it improves your core. >> yes. but i have everything. >> what color is it? >> i think it's blue. it's a blue ball. >> i'm not going to say anything. coming up, 2014 is ending as the year in crude prices, a whole different subject. we're going to fast forward to

next year and get a call on commodities. first, though, squawk sports move. zane wade and the heat spieling the return to miami. the cavs did finally tie it up after being down a lot. but then they lost. and the cavs did fall to the heat, 101-91. then the nets got crushed again. anyway, we'll be right back.

as 20134 draws to a close, cnbc is breaking out the play book. this hour, it is commodities. here is kate kelly. 2014 was a wild year in commodities and for many people, not in a good way. a confewence of cyclical changes, dry weather and geopolitics led to big disparities in the asset class. and 2010 won't provide much relief there. five, coffee goes higher. some of the world's key producers are handicapped at the moment and have been for some time. coffee was one of the year's biggest movers rising more than 50%. that is likely to continue. americans drillers haven't gotten the opec memo yet.

the two groups will have a tear down. there is nothing to top it from falling way down. third, gold tips further. with the bullish november jobs report, global gdb, we're emerging from the financial crisis, finally. and look for the yellow metal to merge in the coming year. opec producer expect a oil to rebound between $70 and $80 for 2015. chris faulkner is joining us. good to have you here.

are they right? >> i think they are right. the low 70s make sense by the end of 2015. but in the near term, i think oil may slide further. we have a model that shows it may touch. >> and why douj that's the low? >> i think we're seeing some force alert right now. >> is he the technical or -- >> i think it's some of both. we have speculators to drive the price down. we saw storage numbers up to an all-time level now. in a minute we saw withdraw of almost 12 million barrels. we think the numbers should have fallen more than they have. the support is already there. >> so as it overshoots a little, you're seeing it overshoot now. >> correct. >> you see it easily now. if someone had predicted at 95,

i think it's going to be a -- yeah, it's going to be 70 for the next 18 months, that would have an off the wall forecast. now it's almost the conservative way. >>. >> yeah. >> but that is staggering, everybody that follows the industry now thinks 75 is where it's going to stay for a year, a year and a half. >> i think folks also realize we're in a new era. >> why didn't everyone know that? >> i think everyone thought opec could cut production. they're trying to reinforce the relevancy. >> what price do they panic about? >>. >> they said it again on thursday that we'll produce oil at 30 million barrels no matter

what the price. at the end of the day, we say 50 billion, $55 billion. the young folks in saudi are not going to put up with all that. i think because of the subsidy programs, and the way they operate the kingdom, it's going to create challenges for them. at the end of the day, they can't just plead out money forever. >> did you say this in the journal today? >> i did. venezuela, russia, they're all in trouble. >> the guy that has been on cnbc before, he's in prison held by the so-called president of venezuela. >> it's going to be a huge issue. >> and do you think they are inspect. >> i think there is a pretty good chance they will. >> there are two big payments for venezuela next year. march and -- >> every day it falls lowers, it gets harder. >> that's right. keep in mind that there were all these riotes and protests even

when oil was above $100. so we're happy with that. >> right. and they can't afford any more. >> no. >> the not have have are in serious trouble in opec. >> 2020? >> that's a long haul. >> i think we're subfive. because of seasonal impact? sure. hot summer, cold winter. is it going to exchange supply fundamentals? probably not. right now, the winter hasn't arrived. >> nodties are so amazing. i can remember guests saying nat gas is going above $20 and never falling back again. >> those things aren't going to move the needle that much in the next five years. so i guess we hope for a blizzard. >> no, no. >> thanks for getting up early, chris. good to have you here. >> thank you.

>> that will be one of the biggest, of course. >> oil? >> yeah. >> for sure. geopolitical, too. they get so much oil from venezuela. >> and all those gas guesselers. >> and you saw them. cool, you were down there. >> it's amazing, the ingenuity. bolts and bondo. >> when you open them up, there is engines from france and all kinds of things. they had a lot of infrastructure at one point. ge installed the infrastructure there in 1989. still to come, 2014 has been a wild year in politics. washington is moving on to 2015. we're going to get out the crystal ball for the week ahead.

look inside the sector just minutes from now. come back. [coughing]

dave, i'm sorry to interrupt... i gotta take a sick day tomorrow. dads don't take sick days, dads take nyquil. the nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine. this guy could take down your entire company.h? stay with me. on thursday a hamster video goes online. on friday it goes viral - a network choking phenomenon. why do you care? he's on the same cloud as your business. the more hits he gets, the slower your business may get. do you want to share your cloud with a hamster? today there's a new way to work. and it's made with ibm.

good morning. and welcome back to "squawk box" here on cnbc. i'm joe kernen along with michelle caruso cabrera and

andrew ross sorkin. becky is enjoying the day off. but there is no break in russia this year. president vladimir put yib scrapping new year's holidays for government ministers because of the unfolding economics there. during a televised session yesterday, he has other things on his mind. >> i love that. >> come on. >> that's the one. putin said cabinet ministers in his words can't afford to go on breaks. the main holiday in russia is the new year. russians celebrate orthodox christmas on january 7th. january 17th is a big day to celebrate, though, as you know, andrew. so company employees throughout russia are entitled to the holiday from january 1st to the 12th. >> i missed that. >> what are we doing january 7th? oh, our big day. >> right. >> another day to celebrate.

>> it's a huge day for us. >> yes. making our move. >> the big city. >> we're fiejly growing up? >> we get to sit at the big people table. >> so that means i moved to nmg new jersey for no reason? >> there's a lot or other reasons to be here. >> that's true. >> ground floor. right out of 30 rock. >> we'll be looking right at radio city every single morning. pop in on your way to breakfast. >> the rockets walk into work a lot of times, right? >> when they walk in, they're -- >> take it to work. >> i'll be taking it to work. >> yeah, you are. ben white is here. >> your commute must get from nothing to nothing. >> finally, it's oddly on the way here, it does not change. it's on the way back that it changes. >> light from new york city.

>> we're going in early enough and coming out. >> that is exciting news. >> we are looking forward to that. ben white is here and we are here to ask him the question of how will the economic back drop shape politics in the new year. with us to discuss, of course, mr. white is politico's chief economic correspondent. and my question for you is this, given the numbers that we heard about last week, both on gdp and frankly where the dow is, i don't know, maybe take the dow out. just go with the gdp numbers, some of the wage numbers, all thoughts things. what does it do to the calculus for jeb bush, hillary clinton and maybe even elizabeth warren and others in the democratic party? >> i think it can't help but sort of make it harder for populist candidate toes make their argument that the cd economy is stuck and wages are not growing and that the economy

is not growing fast enough. so i think if you're running in a good economy, that's a drn. >> so harder for elizabeth warren to make the -- hold on. >> does it change? we debate this argument all the time. >> it's not gone. it's just the sour feelings that people have had over the last eight years since the crisis have been driven by the lack of wage gains. wages finally picking up some. that will take some pressure off that. but it's going to take a long time to unwind that whole argument. from what i think tell, her one argument is the banks are evil. >> and it doesn't resinate as much. but i think that message that wall street always gets its way, that will continue to resinate some, but you won't see giant

occupying movements. >> but what does it do on the other end to a ted cruz or handball who has made a very different argument that this is a economy that -- >> i think it also makes their job more complicated. i think it eases the path a little bit for an establishment centrist like jeb bush where he won't get beat up as much. there is plenty of other stuff that cruz and those like him, rand paul, can point to as issues to differentiate themselves. so in that vap, i think it helps jeb bush, it helps hillary clinton and helps the president of the united states. his approve rate is going to go up. not that he's going to be super popular. it's less easy to beat up on him

as a failed president if you've got 5% gdp. >> when do we know? >> i think you see right now he's wound down barclay's, he's leaving there. his private equity funds, ice trying to figure out how to get out of those without upsetting his investors. so i think is pointing in that direction. he's got two or three paid speeches left. if he does that, he will announce right after that. >> could he do those speeches for free? >> i don't know what the speeches are, but if they're like automobile manufacturers, you don't do those for free. but you could just cancel them like hillary. >> they has them scheduled late. >> i think both of those could end up wiping those out and

announcing them earlier. because the race is under way, clearly. >> what do you think about mitt romney, any chance? >>. >> still a chance. he doesn't view jeb bush as the de facto candidate. so i think the chances are slim. >> what do you make of this hand ringing? oh, we are not a country, a political dynasty. >> right. i think ultimately it will be about the person itself. and their platform and policies. but in the end, we like to elect bushes. i don't think that blows that narrative up at all. >> we saw the talking points for the democrats are already -- is

that the poe lit cotalking points? >> that was the dnc talking points. >> oh, so it wasn't actually politico. >> it was politico reporting. all right. i have trouble keep those two separate. >> not another bush, that sort of thing. >> is there any dark horse candidate that i think is going to come out of nowhere? >> either warren comes in or she doesn't. joe biden wasn't necessarily run unless the word gets out. the question is does something change with elizabeth warren? >> and you don't think someone

comes out of the weeds? >> scott walker is a possibility. you can come in and john kasich could come in. there's midwest governors who can come in and make the case that they're the best voice for the party. >> rand paul always pulls well. >> very popular, very care is mat ig. he'll be formidable. >> you once told me de blasio will win again. >> he's in weak shape now, but he has a long time to go before he gets to re-election. but he's in bad shape. >> obama says the two-thirds that didn't show up where the ones that would have voted for democrats. the 90% that didn't vote for new york? >> i don't remember what the turnout was. >> almost zero. >> it was weird the way that -- she's had a rough couple of

weeks. >> thank you. >> thank you. still ahead, we're going to talk about the world's largest start up when "squawk box" returns.

coming up, forbes names the year's fastest start-up. we're going to unveil that winner and talk to the company's ceo here. stay with us. [coughing]

dave, i'm sorry to interrupt... i gotta take a sick day tomorrow. dads don't take sick days, dads take nyquil. the nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine.

you may not have heard of it yet, but zanifis beat air bnb and uber. it's also the fastest growing in silicon valley. to make different software for businesses. the company streamlines it all and the software is if you can believe this, free. >> what? >> joins us now is the ceo of zenefits. this is a free service. mostly for small businesses? >> yes. mostly for companies under a thousand employees. >> how do you make money if everything is free? >> we connect up all these

different systems. we give employers and employees a single place to do all this stuff and we make money from all the different benefits providers. and that lets us give -- >> for example, like? >> so we're a broker on health insurance. if we helped set you up with payroll. we get money from the payroll company. >> so it's not like -- a lot of businesses already have these things in place but they have different providers and it becomes a pain. when you integrate them, sometimes they're changing providers as a result? >> sometimes. but often you can connect up your existing system. so you don't have to move anything over. >> do you make money on those? >> in some cases. if you moved your health insurance over, you don't have to change anything about your insurance. you just make us the broker on your plans and we make money that way. >> we should note some insurance companies are not happy about that. >> the insurance companies themselves usually love us because we send them a lot of business. it's other brokers that are upset. >> and they tried to block you

in certain states. >> yes. we got banned in utah. >> just like uber. >> exactly. they said our service was unfair to other brokers because we made it easy for employers to get up and running. >> it is just like uber. >> and so you talk about companies with less than a thousand employees. what is the gating issue with companies with a thousand employees. comcast, they have thousands of employees, could they use the service? >> maybe some day. what we need to do is build out a lot of these different spokes. we're looking to connect with a lot of different companies to get all these different services connected. some day i think we'll be able to connect as well. >> and right now you are displacing whom? oracle? all of the sort of old groups? >> yeah. those guys, they tend not to sell to small businesses. we end up competing with guys who do each spoke on our system. so we compete with brokers on

the insurance side. we might compete with other companies for various other spokes. like wage works or commuter benefits. >> and the end goal? >> well, the end goal -- >> you want to be a public company? >> oh, gosh. >> you will say you want to be independent, i know. >> what's your private equity investors exit strategy? >> it's not something we think about. >> oh, come on. >> they're thinking about it. >> i'm sure it could be a publicly traded company. there are 4.5 billion businesses in the united states with -- >> if they called you with an amazing offer, would you be happy or disappointed to sell? >> i'd be disappointed. i don't think we would sell. i think we see a huge opportunity and we're looking to grow the business ourselves. >> good for you. >> we're going to follow that. congratulations. happy holidays. thanks for coming in this morning. >> thank you. coming up next, sony's

controversial movie "the interview" opening. we'll head to one in new york and see if moviegoers showed up.

got hacked? a rough christmas day for gaming fans. the hacker group claiming responsibility. "the interview" goes off without a hitch. sony's controversial movie opening at a few hundred theaters drawing many sellout audienc audiences. and let the real shopping begin. christmas has come and gone now it's time for consumers to cash in on post-holiday sales. second hour of "squawk box" begins right now.