8:00 a.m. at facebook in california, 11:00 a.m. here on wall street. "squawk alley" is live. joining us this morning, john steinberg. good to see you again. jon fortt is out. kayla tausche is here. interesting market day. dow is down about 46. worst loss in a couple weeks which tells you something about the environment we've been in for a while. first up, another twist in the

sony hack. according to reuters, u.s. investigators now believe north korea hired from outside the country. now security experts are the starting to question whether north korea is behind the hack. the insider story had been out there until the fbi came in strongly. >> from the business perspective isato ato story is basically over. it's pretty dramatic if the administration got it wrong. who actually caused it now is sort of irrelevant to the business. >> a few experts have come out and said i don't think it's north korea. we have reason to believe maybe it is russia or china. we may all have our theories but the only entity that has the visibility to trace back, to

back all the layers of the onion to see where this e originated is the government. and at this point you have to trust they are using that intelligence and they would not come out publicly and say that if they did not have the expertise and knowledge to do so. >> if i'm a chief technology officer or chief information officer am i more worried if i'm not certain it was north korea zbla i think you are more worried now. because you can't deduce what happened so you can't actually protect yourself from it the next time around. we talked about this way before the sony hack even happened. there is a tremendous investment in technology companies that can actually secure against it. the big cap companies like cisco and others i know of as well have a big opportunity here. to actually secure the cloud based infrastructure. >> a daily mail for instance, has your world view on security changed markedly? >> i think we're always concerned about it.

you really never know how vulnerable you are. we try to use two factor identification whenever we can. and we try to keep the communication separate. the more you can keep the sets separate, and not do password sharing. basic stuff. but if it can happen to sony. it can happen to anyone. anyone who says it couldn't happen to them is naive. >> i think that is the lesson from sony is that we're all sort of equally vulnerable. facebook 2014 has been great for the stock. shares up about 46%. but today an article in the washington post makes the argument that the world is actually turning on facebook. younger users are leaving. others complaining more loudly about privacy policy and just how much data it has access to it. they mention lo as the first true antifacebook platform. >> so ridiculous. yeah facebook is a company that has well in excess of a billion users that's lad some problems

this year. the study that everyone points to shows 13-17-year-old social media users -- they only surveyed 1900 people. that the engagement dropped to 48%. what they don't report is instagram jumped. and 54% said they consider facebook a essential utility. this is where one survey gets everybody going crazy. >> and by saying the world turning on facebook, the world according to america's teenagers is basically what they are saying. what's responsible for zeitge t zeitgeist. but the fact that l.o. yes it went almost as quickly as it came but the fact it was able to capture the sentiment of people who are unhappy with facebook. >> whatsapp is really the issue. and this is where facebook has a weakness. these things are much more fragile than people recognize. facebook gave 10% of market cap

to buy a company that had $20 million in revenue. facebook had to get instagram because instagram was showing so much growth. and we saw now the tremendous numbers instagram has put up. i don't think the services are as sticky as everybody thinks. i think people leave them for new exciting things easy. i don't think it's discontent. i think this is the fact that there are always threats waiting that the take the users. >> is there no room for worry in the halls at facebook regarding skepticism over the algorithms or the knowledge that you are not seeing everything all your friends put on the feed and so on. >> ultimately that is regulatory. there is not much advertisers can really do. may facebook can make them pay for more more promotions snap chat is another example. they tried broke. -- tried poke. it didn't work.

we see more about snap chat talking about how facebook was dieing to buy them. it's competition. it is not discontent. >> when you think about discontent and backlash at experiments they were tweaking statuses and having people post things to see if they were one mood or another. then this issue of automatically posting someone's year in review and some who had years filled with grief were not happy. for a company with a $200 billion plus market cap, how can you have so little eq and operate successfully? >> i think relative to the scale they are operating and the number of things they are doing and the amount of personal information they were handling. they are bound to have missteps. you can't talk of a company out there that deals with hundreds of million tors of users that doesn't have this problem.

but as i said, the bigger threat is what is the next oculus rift? how many of these are there going to be out there over time. >> makes you wonder if they change they're corporate name too. >> or not unlike where apple from apple, inc. >> finally is it time to say goodbye to internet explorer. microsoft is working on a new browser, code named spartan that looks a lot more like chrome and firefox and less like internet explorer. we'll find out more about their plans at a windows event in mid january. provocati provocative? do you believe it? >> yes and good was my reaction. browsers and app stores are the gateways in mobile. and if microsoft doesn't have a lightweight browser that can be used everywhere and be ported to

android and potentially to ios. there is a challenge there because ios only allows web kit chaz engine that microsoft doesn't use. this allows microsoft to create extensions like chrome. to open up a whole new world of access for people to say i go there when i get access to the cloud right now. ie is antique right now. >> but it doesn't have the market share. >> chrome has risen up over the space of five or six years. even as a second strategy to get themselves on mobile i think it is very smart and exactly the kind of move wes want to see them making. >> is it enough to make people nor excited about buying a windows phone. >> we're going to talk about how apple had a dramatic holiday season. for every microsoft loumia devie

that was activated, eight apples were activated. >> stock is up 17% this year. doubled the s&p. not a bad first year for nadella. >> yep. >> even though today the list of the top ceo apologies and the certainly the comment from nadella is one of them. >> yes. exciting at this point. and the things they have done in terms of office 365 very relatively small. so i think 2015 will be the year he delivers. or does not deliver. >> what does it enreally mean to launch a small new browser. >> also what do competitors do as microsoft is waiting to put some of these products and these developments onto the market. >> you're hear for the hour. >> yep. >> good for us.

in the meantime, officials confirming debris from in indonesia waters is indeed from the flight disappeared on sunday. >> a tough day here. officials confirm they found debris and bodies in the water from missing airasia flight 8501. all made even tougher by the fact that relatives learned of this by watching local tv, seeing images of the bodies in the water without warning. 162 people on the flight. 17 were kids. one was a baby. they will begin the search effort tomorrow in earnest hoping yet to find more debris. potentially even survivors. and they are also going to send divers down to a big shadowy area they have seen from above. they are hoping the divers will

recover the black boxes to figure out exactly what went wrong with this flight and what they can learn for the future. meanwhile a plane chartered for the family members so they can pray in the last known location where that plane was. a tough day all around but it will begin again tomorrow. five countries still searching. they are still calling this a search and rescue operation, hoping that there could still be survivors. back to you. >> our thanks to katy in singapore. devastating news as the search continues. we do also want to get a check on the markets at this hour. major averages still posting losses. the biggest since december 16th. you can see the dow below 18,000. the s&p down by seven to 2,084. shares of gopro rallying this morning though. coming after pacific crest said it saw strong holiday demand and

lower inventory levels month over month is enough to bring it up 3 1/4%. >> reuters reporting the auto maker will likely fall short of 2014 sales goal. that stock is down. >> could alibaba really buy ebay in 2015? plus one wearable tech company says it could help you make money just bilosing weight. and with alibaba going public, which sector had the best ipo performance of year? it's come ung up in a moment.

the nasdaq is down this morning. near the break even point for previous december gains. still about 5 facto% from it's time high. >> march 10, 2000, i remember it because i was still a very young guy on wall street back then. 5132 was the record high for the nasdaq composite. we took a look at the large stocks in the nasdaq that co-come the most.

the technology names look at this. amazon shares. they are up and they are up great. about 370% just since march 10th. . that is a huge return for investors. look at western digital as well. the computer hardware side. up over 20 2,000% and apple nearly 2,000%. some of the winners since that march 2000 level. look at the large caps we've come to know so well over the course of the years that have not participated in the huge runback to these levels. intel still about 38% their record levels back in 2000. and it means a healthy gain just to get back to where they were at the bubble peek. yahoo shares down about 43% from where they were at the bubble

peek in march 2000. and cisco down about 60% from that level. names we thought we are going nowhere but up back then are still at these levels. the s&p, the dow, all at record territory. some of of these stocks need to help power that record composite. >> and once again negative for the month. >> 2014 was a big month for ipos but consumer, not tech. average returns of more than 30%. while the average for tech ipos just 13.5%. how does it look going into the new year? consumer. is it mostly like restaurants? >> we tail restaurants. but technology is the laggard.

some of the numbers are skewed. activity post first day because nearly all never get on the opening price. no one got in a alibaba on 60 dollars on the opening. they are paying 90 or above. first day trade going forward, average consumer ipoed gained about 16%. ex first day and they actually had a loss. >> do you think ipos roll into the new year the same way this year. >> march 2009, it was a drought of ipos. it was a desert. now it's like falling ipos from the sky. >> some of the numbers have been skewed by the one big one that has come to the market. alibaba this year.

facebook a couple years ago. do you see 2015 we see any of the mammoths like uber or shaomi going public. >> technology companies having a hard time raising funds year over year. the quantity of deal are coming from bio technology. of the 300 some odd ipos. the top ten gainers in the bio tech sector. >> we've gone 38 months on the s&p without a 10% correction. average since world war ii is 18 months. >> it's somewhere out there coming but the fact we still see positive earnings growth, a former -- current cbc

commentator says profits are the mother milk of higher equity prices. the fact we're going to see upwards of the 9% earnings growth next year. we're seeing 16% growth for the sector for 2015. revenues is going to be like three times consumer discretionary sector voersus overall s&p. >> you see s&p eps growth of about 18%. and 4% revenue growth to. maintain the multiples to have a strong ipo market, how much multiple expansion do you see gets us to those indexes? >> a combination of the both. improvement in the economy and improvement in job sector. and improvement hopefully in the housing market. rates inching a little higher but not dramatically. >> but the multis are where they

should be aren't they. >> the back in the tech boom, it was. so you have a little more room to go. >> using multiple, a lot of investors have chosen to look at sectors, looked at historic performance or forward earnings and you can make a thesis based on any one of those. there is one metric i want to ask you about. and that is that 84% of the s&p is at or near 52 week highs. and normally that peaks at about 88% before that corrects. do you think it is healthy to have so much of an average sitting near a high. >> earnings are going to continue higher. today i saw the metric where many retailers are all time highs. nordstrom, p home depot. but they'll still have upsides.

>> and people are making guesses for 2015. some are outlier calls. down, 10, 15% for the year next year. they say that is an easier call because we have gone so long without 10%. >> sure. the fact we've had three consecutive years of double digit gains. phi of last six i think. but you have to go back tot the horrible year of the 2008 when we lost about 38% on the s&p. i go back to thesis. as long as a good earnings growth that should correlate with higher equity prices. but you could have always have exogenous shocks. with russia and other factors. >> happy new year. see you in 2015. >> may the next 50 be great also. >> when we come back, new numbers on just how dominate apple was this holiday season. we'll bring them to you. on the other side of this short break. so ally bank really has no hidden fees on savings accounts?

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welcome back to "squawk alley." more pain in the oil patch this time around. southwestern energy which is an exploration company e and p gave guidance that isn't impressing traders. the stock has been sliding all day long and down about 5% on the session. with today's lost southwestern is down about 20% this quarter alone. >> in case you missed it. a great christmas for apple. more than half of new mobile devices activated worldwide this holiday were made by apple. the company grabbing over 51% of that activation market with samsung coming in second at at little over 17%. for every samsung fun activated about 2.9 apple phones were booted up. you drew the comparison earlier to how far down that line microsoft actually is. but is it a surprise to see apple this far in the lead. >> i think yes.

it is. but you can get it through your ad b thinking about the fact that apple is what you get as the gift for the holiday. as the disadvantage that samsung and other products are not thought of that way. people go to the apple store and give ipads and give iphones as gifts and the other products don't have that going for them right now. >> it's dramatic when you think about still apple doesn't have the largest market share. they are only about 12%. they are the ultrahigh end. and when you think about the dominance of the product you can sometimes forget that fact. >> europe closes in a couple minutes. and more deflation in spain and greece. >> just note the magnitude of the fall today. it is holiday thin trade obviously. so for any given trade you might expect an exaggerated movement. however a rough day for europe overall. it is interesting that oil is

clearly under pressure. you have brent below $58 and that's concerned a lot of people in europe. so the oil and gas stocks are right at the helm of it today. the oil major, and these are big cap stocks in many national indices have really taken a hit today. it means that if you look at where we've traded for december overall. there is marked divergence between this country and with ma what's happening in europe. here you can see that the s&p 500 for december is still positive. however in europe we're made heading back down almost 2% lower for the month. if you finish in negative territory in europe that will be the first time for eight years. the eye of the storm as carl accurately describes it is the athens today. they met with the outgoing president to meet with the disillusions of the parliament.

and the bigger issue is that as a result of qe or the threat of sovereign qe, that 500 billion euro stability fund that europe has and the fact that ireland, portugal and spain are in much better economic situation than last time we had a problem with greece, you don't have serious c contagion across europe. today the italians were able to sell not a huge amount of debt but able to do it at at record low of 1.89%. so you don't have yields blowing up. that may be because the situation in europe is so poor and you expect the ecb to come in and buy sovereign debt. the discuss continues but that is a talisman of the fact it is not blowing out against yoourp. >> ap reporting several,0 ininid rallying outside the kremlin in

a protest. which is something you don't often see in russia. >> interesting. and i'm speaking off the top of my head. there was a court ruling against an opposition politician that people are getting quite irate about. unusual to demonstrate in such a way. indication perhaps they feel they have some white space in cl do that. >> perhaps. the economy in russia sign language for the first time in five years in november. and we know what the energy and the ruble have done to their economy. when we come back, could alibaba really buy ebay? that's one of the major deals we could see in 2015. we'll get you the entire list of re/code in a moment. ♪ music

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deals such as time warner cable's merger with comcast and at&t's with direct tv highlighted a huge year for m and a but can 2015 top it. joining with us with deals is jason dell ray senior editor at re/code. good to see you. you think that alibaba would potentially buy ebay as it prepares a spin up? that would be pretty cool afteral babb passed overebay. and chose yahoo several years ago. >> it's one of the deals

e-commerce is very intrigued by. and i think it's a possibility. the question is how soon does l alibaba target u.s. consumers. >> and how soon does alibaba want to become the foe on washington. tax lobbists. we talked about its u.s. ambitions. do you think washington would let a deal lake that that happen? >> good question. and i don't know. but i think for alibaba. if you are serious about building a global company t u.s. is a market you need to get into. so you have to consider a big deal like that. india also. ebay has ties with young hot company there is and and that could also help with a deal with alibaba. >> i loved your secondary picks. the old line companies that could buy internet. tj max buying gill group. and whole foods buying blue

apron. and nordstrom buying -- >> so nordstrom has probably been the most aggressive brick and mortar retailer. they did trunk club, a $350 million deal. a the personal shopper service delivered to your door. i think they will continue to be aggressive. and i think it's smart while other companies like tj max and ross stores stay on the side lines. >> you say twitter buying stripe is a long shot. why would they not by square? too expensive? the ties don't make sense. >> i think it's too expensive. and probably stripe is too expensive as well. but it's been talked about enough by smart people they think it's something that as at least been considered at some point. >> and the synergies would work howe? what use to twitter. >> twitter wants the mobile developer tool set called fabric

they announced recently. developers just drool over stripe bouz because how it easy it is accepting payments. >> walmart has also been doubling down on e-commerce with limited success. this holiday season we're still waiting to see how it panned out but you have them on the list for a couple potential acquisitions. paypal as well as wish. would a start up even sell to walmart? there is always the question do you want to lose your cool. >> let's start with wish. a mobile app only a couple years old. really low priced clothing direct if from manufactures mostly in china. do they want to sell to walmart? their business was growing

faster than amazon a quarter or two before. but amazon is still the big threat to them. do they do something in e-commerce which is mobile focused whichs aggressive or do they make a big play for paypal which is on the payment fronts and the lending front could be very interesting. as walmart starts to offer more bank type offerings. >> and they have a partnership with american express. they are moving a lot in that direction. you basically say e epay and paypal that split is made to be gobbled up by others. >> i i can't go two straight days without finding people who think that split will be maintained more than maybe a year after the split and alot of people don't think it's going to happen. >> one topic on investors minds is local delivery stuff. amazon in it. google in it. you broke a scoop about insta cart raising $200 million. how does the economics work now in a way it didn't work before

can do you think as the good idea? >> i think a big part of it is the mobile devices. both on the consumer side but really on the logistic side. you have shoppers who have these phones, can take orders on the go. don't have to go back to a warehouse every time they need a new order. and the biggest thing about insta card is they have making deals with the owners themselves. and it cab big help in lowering cost of delivery. amazon is going to be aggressive here. ins cart probably too expensive for anyone to acquire maybe except for google ats this point. >> your final thoughts on apple pay? >> i think it is going to be big. the big questions merchants want to know is how we get our loyalty membership programs tied in to it. and what is the real benefit to

us. some whole foods retailers are saying basket sizes are increase. but we need to see loyalty programs baked into it. and i expect that to happen. it does not look like a massive slow down at the port of los angeles will get better any time soon. we'll tell you why in a moment.

coming up, less than eleven

trading hours left this year. and we're getting the best ideas from the chief strategist at j.p. morgan and oppenheimerer. zero to here in 2015? and we'll debate. and why the street has it wrong on yelp. the analyst who says it will gain 60% in the next year. see you about 15. >> welcome back. we want to get some of these live pictures out of moscow. thousands rallying outside the kremlin in what's being called an unsanctioned protest. a court gave the opposition leader a suspended sentence today for embezzling money. that seems to be at least part of what's behind this gather zplg a lot of unrest with the move in the ruble and economic effects we've seen recently in

russia. from russia to china where a four day blockout of google's gmail appears to have at least partly ended today. be thank you service is not back to normal operation. the main sigte long been blocke for years but you could still access it on your phone. and over the weekend all services stopped. google publishes a live transparency report. it shows market activity and service of products. complete dropoff over the weekend and ticking back up slightly today. albeit very slightly compared to the fast past. but some still complaining of slow service and you can see obviously that the activity level still lower than expected. but perhaps guys, any claims that gmail's access in china has

come to a full stop is premature. >> it's very odd that china would block gmail web access but allow people to access it on the phone. it seems to me a little more playing around with the great firewall of china. i don't think they would intentionally allow access through apps but not the web. >> weeks after the internet came to silicon valley. do you think any fear os of a slow down in service would halt ambitions for other companies. >> it's too big a market. even google has now expressed desire to give it a shot. facebook has given the most inclination. and it's tentenuous. and at any time you can see the things drop off. >> in the meantime there is a massive slow down at the port of los angeles. a problem that is not going to get better probably any time

soon. jane wells is there live today. good morning. >> hey carl. yeah a lot of press releases. not a lot of action. and the national retail federation says get ready for fourth quarter earnings reports because that is where we'll see the effects here at the nation's largest container port complex. lulu lemon already lowered revenue guidance and both the dock workers and terminal operators blame each other for the congestion which has kept a lot of inventory on ships in a contract deadlock that seems to be repeated every few years. caught in the middle are manufacturers. they say millions of dollars of inventory is stuck on ships and not getting to targeted consumers. >> what we're targeting is people that aspire to have something that they normally couldn't afford. they can afford it and it looks way more expensive than maybe it actually is. >> in the history of our company

is in line with our best-selling groups. and it has been very very successful. and now we have a lot of customers that they are complaining about the fact we promised their furniture is going to arrive and it has not and they don't know what to tell their customers. >> 23 containers are full of their furniture. they think a full on strike is unlikely but the slow down could last another 6 months. other retailers wouldn't benefit. and we could see a surge in cargo here before the february chinese new year as factories over there shout down. and exported loaded containers are also down double digits and so called empties going back to asia have surged. >> one company with with 23 stalled containers. that is a stunning statistic and great reporting from the west

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you may remember our next guests from their fitness tracking devices, shine and flash. but as we head into the new year how being fit in 2015 could make your money gain weight. the ceo joins us this morning.

welcome back. >> great to be here. >> we've talked about wearables all yearlong. health wearables to be specific. and we've wondered at what point would insurance companies link up and give you some benefit if you wore them. and that is apparently where you are headed, right? >> yeah. absolutely. if you sign up with oscar in new jersey or new york you can get a free device and they will help you stay motivated and sleep better. >> how wide spread can this get? >> oscar is really at the forefront of a lot of this thinking. but i think this is going to be a new trend for the coming year. >> traditional insurance companies already have existing plans where you can get money back on your plan if you check into the gym or meet certain fitness goals. how is this different from that? >> i think having something with you all the time is really going to help you stay motivated to move more. and for us, also to sleep better. so it is about constant

engagement, really. >> and sonny, what happens if somebody like forgets to wear it for a day. i often forget. what is the requirements? how stringent is oscar and you going to be at days on? >>, you know, i think with them it is just a really simple, you know, proposition. just if you sign up, you get a free device. and we've seen that when people just have a device they are more likely to stay engaged with health and fitness. and the main thing really, we got to think about why people take these off. because they have to charge them. the shine and flash, neither require charging. so that's one of the reasons i think people keep them on a long time. >> give us an example of a few of the goals and how much you would earn for meeting some of them. >> it's going to depend based on you know your activity levels and what not. and it will depend on i guess the different programs that you sign up for.

and the financial rewards -- >> is it just losing weight? is it getting a the good night sleep? how widely does this span? >> for now it is mainly around activity. just are you active. and i think that is what we're tracking right now. >> obviously a lot of big investo investors. any sense how shipments will go in 2015? what can you tell us in terms of the volume. >> it's been great. we just did a big round of financing and on the heels of the tremendous growth. q 4 with was just amazing. especially from overseas. most of our revenue outside the u.s. >> apple watch? >> i love it. if you want a screen on your

wrist. if you want one of those kind of smart watch, apple watch is clearly in my opinion the prettiest one out there. i'm definitely going to be getting one. and we'd love to develop on it as well. watch kit is ryo going to be a lot of fun to make stuff for. >> you anticipation of how big the apple watch will be and what type of business it could bring the misfit. >> absolutely. it's a whole segment that we're -- of people that we currently just are not going to be able to reach. these are folks who can afford a product at the $350 and above range. for our products it is a different segment. so the we'll see. >> certainly. and we're going to watch every single wrinkle sonny. you know it. >> reporter: r. when we come back, still a

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welcome back to "squawk alley." utilities are giving up recent gains. the sector has outperformed the rest of the market over the last week, month and quarter but today it is the weakest in the s&p 500. leading the decline are these. but let's not forget this is the hottest sector so far to date. >> whether because it is defensive sector or income generating but that is one thing that is clear. let's look at the nasdaq too. currently doesn't about a third of one percent. >> the nasdaq has been lower all day. down modestly lower about 15 points right now. but as 2014 comes to a close look at the nasdaq composite. that is up nearly 15% for the year. and that is trumped only by its large cap peer, the nasdaq 100

which is up more than 19% for the year. some of the stocks that have led the rally in 2014, electronic charts and american airlines have doubled in value. also avago and keurig green mountain is up about 80% for the year. and notable gains inem some ofe large cap techs. apple, microsoft, intel, as well as facebook. but all of that's brought the nasdaq to within about 5% of its record close back to the tech era bubble march of 2000. that is really what traders and investors and strategists are look aggregate here as we move into 2015. keep in mind, this is the only major index that hasn't hit a new all time high in 2014.

if that happens in 2015, all of them will be in sync above the resistance levels. >> thousands of people rallying outside the kremlin in this unsanctioned protest. opposition leader al. >> three big thought into the end of the year. first demand for video advertising has been insatiable for everybody. advertisers cannot get enough of pre role, mid role inventory. a lot of demand there. pro dramatic. the rates are going up. how will that continue. and the final thing is december tends or the have been strong because of all the holiday shopping. january can sometimes be a

little weaker or flat. as the dollars move from tv to digital, how will we see these first few weeks of january? if they are strong, that is a very good sign for twitter, so on and so forth. >> you talk about tech and media and all the things important to this show. we love having you. let's get to wapner with the half. thanks. welcome to the half halftime show. let's meet our starting line up for today. jim laventha. jon najarian. kate moore, and art cashin is at the new york stock exchange today for us where he is celebrating 50 years on the floor. art i'm going to you first. you are a game plan looks like this. bubble trouble with