d. >> yes. he made $12 million a day or something. david stern. check it out "squawk box live" here on cnbc. now it's time for "squawk on the street". happy birthday to joe fuhrman. so far free market all that encouraging. downgrades at work including ge. oil is down. we hit $48.47 earlier in the morning. just above that level. yields at record lows around the globe. u.s. ten years below 2. our road map begins with the

markets after the dow falls 300 points. futures modestly higher. >> dish going over the top. streaming tv for $20 a month. no contract cable box, a few channels will it accelerate cord-cutting? >> the 114th congress sworn in today at washington. falling gas prices in focus. futures on the rise the morning after the worst day for stocks at about three months. losers in the energy sector. oil prices fall below $50 since 2009. i guess it's your sense there is more to go. >> i think there's big supply problem. meaning we just don't have any place to put it. people don't understand in the last few months there was dramatic growth. eagle ford in texas.

there is a gigantic amount of oil to hit the gulf of mexico. big wells drilled initially and were caused come on. what matters, you've got to look at this in perspective. only 2% of the job growth was directly or indirectly related to oil. there are only 16 states that produce oil in this country. roughly 10% of the population is possibly at risk in terms of consumer spends. 290 million people directly benefit. last i looked, that's a lot of people and 317 million country, yes north dakota is hurt. there are 700,000 people. >> why the violent moves in the stock market primarily down of late. certainly perhaps more than we might have anticipated if i told you in june oil was going to fall more than half in price. >> i think a lot of people were thinking what the demand side must be weak. there is demand but weakness in europe. >> you said supply glut. that is an important distinction. if it's not demand as supply

that would not imply as negative thoughts about the economies in the rest of the world. >> iraq producing 900,000 more barrels than people thought, 2.9. a record production. russia more than you realized because they need the currency. and the united states. we are talking about we stopped picking nigerian oil. we are not going to need venezuelan oil. keystone pipe is an issue. you're talking about north american self-sufficiency. that wasn't supposed to happen until 2020. we have no place to put it. oil did fall from 140 to 40 in a six-month period beginning 2008. it's historically the most volatile commodity. we can freak out about the decline or accept the fact oil increased 10% i would be telling everyone at home to sell their stocks. >> for those who have come back from vacation saw their 401(k), saw the dow down. last night you issued ten

lessons. one was don't sell too soon. >> yes. look at their 401(k) how they did at the end of december. if you were in an index fund a la vanguard you were up 11%. mid cap more than that. small cap up a little bit less. realize there were huge profits being taken. be careful when you take profits. take profits in starbucks. you heard the last three weeks may be bad. is it time to sell? what i'm saying is these great american growth companies that benefit from lower oil prices are not the places to sell. we've got a huge number of restaurants retailers that are terrific. is this the time to bail from walmart when they have a good quarter because of weather and oil and natural gas down? propane heats a lot of homes. we have a big spike? weather. terrible weather. wait till you see your heating bill. it won't go up as much as you thought. >> yesterday's market action exacerbated by fears in europe

and terms of what the ecb will do whether there is a deflationary concern to be had there. also about greece and potentially the party taking over and saying to austerity go away and trying to exit the euro. that didn't help us. i had a lot of people yesterday saying should i be looking at things differently with this move down? am i perhaps, should i be thinking about the domestic companies i know are going to be beneficiaries differently because something is out there i don't know and is being reflected in this significant move downward on the s&p. >> take disney okay? i know in the conference call they didn't talk about how much they could benefit from gasoline. it's very clear parks are more crowded. it's clear disney benefited by espn doing the segue because you'll be talking about that.

what is the gist when the company is probably in there buying hand over fist? my thesis is i'm scared. i like more than i'm scared. hyg not down that much. 18% of it is oil and gas. these are backed up by properties. good note by bank of america, merrill talking about do i need to own oil? can i really afford not to own retail in restaurant in 2015? >> that hasn't stopped credit suisse cut ing cutting kors. >> the switch to natural gas is happening rapidly. ge we had jeff unger. they pull beinged up infrastructure and energy. >> to that point, the capital goods companies did suffer. for obvious reasons but there

was pain there. >> if you're an international company based here you're looking at the dollar and you're worried. you're looking at europe 770 million people and worried. if you're a domestic company, darden upgraded today. the former ceo did come on and say we are the big beneficiary of lower gasoline prices. 70% of our country is a spend country. china? they are a huge beneficiary of the decline in oil. listen up china. sell a trillion of our bonds, take a big profit. me to china. >> it was on cnbc asia. >> i'm sure he listens every morning. >> ring the register on $2 trillion in bonds. put that in infrastructure and solve your pollution problem. >> it's incredible. >> and solve the world's problems. everyone should ring the register treasuries when you're

under 2% ten year. take profits, china, yellen. >> a lot of people wonder how copper can be acting the way it acted albeit with a strong dollar if china is going to be building so much. >> they are not. the trade index is pathetic. it's the rate of growth not the actual growth rate. it's still what we want. united states is the only country actually growing. that scares people. we saw petrobras down. i was in mexico last week. peso was 14.5/1. it was 12/1 three years ago. there are stressors in the system. you don't want to own the lower-tier oil companies. under $2 gasoline is coming. last i looked that means i've got enough money to shop at kroger and go off high end at kroger. one of the top ten stories in the s&p. >> the falling currency whether it's mexico or euro should help

their exports, which one might argue will help their economies, as well. our exporters are hurt. i haven't heard that much about it. >> fox upgraded. restoration hardware imports. some of the great retailers imports. we've got port problems in the west coast. they are not going to cut prices. we see beef rolling hear hear. do you think they are going to cut prices in chipotle? >> right. are the airlines cutting prices? no. american doesn't have a hedge. they are making a lot of money. >> thank you for saying that. that has a huge multiple. southwest is the best-performing stock. i'm not crazy on southwest. >> mcdonald's weaning itself from the dollar menu which will happen too. they could use food inflation. >> i'm not going to disagree with that.

when i looked at the upgrade about food it didn't even imply what's happening is they are getting the double whammy in their favor. there is real price deflation in agriculture. the downgrade for dupont which they said no catalyst sorry last time i looked you are a catalyst. agriculture could be under pressure. the complex is coming down. when you go to the supermarket and you have more money left you are not a hedge fund you don't understand why it's bad. hedge funds say it's bad. wish there was more to it. >> there is concern one of those hedge funds, perhaps there is a surprise loser in all of this. we haven't found out and it could happen. i don't believe that but that's the thing going around yesterday. >> what was oil up 140 because of natural demand? was it at 40 because there was natural demand?

no. oil is incredibly volatile. the cutbacks in spend in capex are huge. you do get a boone pickens effect 18 months from now. >> you think boone was right? >> 1998 we had a quick shutdown of production. we can't shut down as fast these days. we have too many contracts held by production. drill no matter what. those are still -- the bakers hughes discount is dropping but not as much. >> 114th congress sworn. in president will face a republican controlled house and senate. mitch mcconnell says legislation to approve the keystone pipeline will be the first item up for review. the white house says he believes the pipeline would have little impact on gas prices. what do you make of that argument? >> i don't think it will happen under this president. this is one of those issues

frankly, where the canadian companies, where people don't understand. canadian pipeline companies, you think they are waiting for keystone? they've taken direct action to get that oil into our country because they don't believe president obama is going to approve it. when they do come on "mad money" they are, can you believe we want to create 60,000 jobs do this and that? what matters is that the pipeline has been obviated by u.s. companies. it is dirty oil. they spend billions upgrading refineries to take care of keystone. only nigeria has cleaner oil than eagle ford. >> depends where you are.

>> i think continental suffered because people feel they are the bakan. >> yesterday anadarko down 8%. does this keep going? is there a bottom to be found whether they are bakan or eagle ford related? >> look at the ratings. look at the numbers the analysts are using. they haven't started cutting them yet. there are a lot of buys on these stocks. when they get downgrades of these stocks and anadarko was under pressure yesterday. when you get the number cuts realistic, you'll get a u.s. silica, the sand supercycle announced august 27th. we need to see everybody in the patch lose hope. >> that's not the buy. >> a lot of buzz surrounding dish network's new slinging options, sling tv. is it truly a game changer?

qualcomm ceo on what's next for the king of mobile chips. john fortt is in investigation. another look at futures. the bulls trying to regroup, the s&p finally down four days in a row on biggest volume here at nyse since december 19th. more "squawk on the street" in a minute. these ally bank ira cds really do sound like a sure thing but i'm a bit skeptical of sure things. why's that? look what daddy's got... ahhhhhhhhhh!!!!! growth you can count on from the bank where no branches equals great rates.

dish network yesterday at the consumer electronic show

introducing its long-awaited over the top broadband screaming offering. about 11 channels $20 a month. that price point coming in below some expectations. you've got a lot of analysts writing about it this morning. differing takes. it does appear to be aimed at those people who simply don't take the cable bundle who are typically younger, 18 to 30 or so. perhaps an underserved market we are talking about. some people also seeing it as the first of what will be a number of different offerings that will start to attack the cable bundle. we've been talking about this for a long time. we've been waiting for this offering from dish for quite some time. they did that disney deal that gave them access to espn for this service. it finally is here espn being the key offering. >> is this the beginning where i can select the 12 stations i

want and forget the 490 i don't want? >> it may be. it may be a slow start here. if you think about this particular offering espn certainly is a key part of it. you don't have the broadcast networks here. you do get the disney channel. you've got time warner offerings, disney and scripps, food network, hgtv travel channel. what i wonder is the price. $20 doesn't seem to be that expensive, but you have to access through broadband that you're paying $50 and add on netflix or hbo go. you are getting up to $70, $80, $90 a month and start to wonder where the price no longer is a benefit to that consumer versus the cable bundle? >> you could argue there is a generation if you give them cartoon network, espn and cnn, that's good enough. you agree? >> i don't know.

i find it hard to believe. other than espn i dvr everything. i don't have time to watch the stuff other than espn. >> what this is is a long-awaited offering they've been putting this together for some time. remember when they did that disney deal i was wondering, what does this mean? now we see it. espn being available. you'll get a lot of commentary about it. from my perspective, dish is important in terms of the stock is what's going to happen when these auctions end which should be any day now. how much spectrum did charlie ergen buy? what does that mean for the future of the company? that is interesting in the part of the evolving world of content and how it's being distributed. >> disney said even though this is evolutionary it still supports the multichannel

strategy that all distributors have. >> it's exciting. excuse me. >> i believe we have a moment of silence. we'll let them have it.

about what happens when you turn sixty-five. but, really, it's what you do before that counts. that's thinking time when you ask yourself, how do you want this to go? see, medicare doesn't cover everything. only about eighty percent of part b medical costs. the rest is on you. so, get started on an informed decision. [ male announcer ] consider an aarp medicare supplement insurance plan insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans these plans could help pay for some of what medicare doesn't. that could really save you in out-of-pocket medical costs. so, call now and request this free decision guide. just a little preparation could mean a lot down the road. make sure you have the information you need to go long™. think about this -- do you want to choose your doctors? avoid networks? what about referrals? [ male announcer ] all

plans like these let you visit any doctor or hospital that accepts medicare patients with no networks and virtually no referrals needed. hey, you've made health insurance decisions before but this time, you're doing it on your own. so, the partner you choose is big. [ male announcer ] unitedhealthcare insurance company has over thirty years experience and the commitment to be by your side. call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only plans of their kind endorsed by aarp and nine out of ten plan members surveyed say they'd recommend their plan. having the right information is just smart. do you really want to leave something this important up to chance? [ male announcer ] remember, medicare doesn't cover everything. the rest is up to you. so, call now request your free guide, and explore the range of aarp medicare supplement plans to choose from based on your needs and budget. sixty-five may get all the attention, but now is a good time to start thinking about how you want things to be. [ male

announcer ] go long™. 6 1/2 minutes before our mad dash. want to start with a new chapter involving gilead. >> we know that people don't want these pharmaceutical benefit managers don't want to pay the price of their hep-c pill. cvs does things differently. just like they took cigarettes

out and everyone thought they would be her. cvs is okay with that formulation. it puts gilead in the driver's seat. i know the adv people was favored. this says you are wrong. they are going to reap big profits. >> do you know if they are offering a price discount here? to refresh people if you call, abv and express scripps reached a deal to be the sole supplier of the hep-c treatment. it is considered to be some what inferior to that offered by gilead which costs $80,000 a year. >> but it's a cure. >> now gilead signs an exclusive deal with cvs. >> what i like and was saying on the street gilead has enough cash to do what it wants. what does matter is everyone

dumped this gilead soon as the ad-v news came out. if you get 30% of the market you didn't get from express scripps you are making a lot of money. i think gilead will be back as one of the companies people talk about with celgene and regeneron. >> all these stocks suffered. there was a big sell-off in biotech with this deal. >> exactly. people felt this was the peak. these companies which had great pricing power are done. i heard that. biotech is done. biotech is not done. >> it's not that big a move given how much it lost. >> yesterday was a tremendous day. stock was up and came back. gill yasead is bigger than a lot of companies. i don't want to leave biotech because it keeps inventing. i had isis on yesterday announcing what could be an $800

million deal with j&j. i think gilead if it gets an 11 multiple will go back to its high. >> opening bell after this. for over 60,000 california foster children nights can feel long and lonely. i miss my sister. i miss my old school. i miss my room. i don't want special treatment. i just wanna feel normal. to help, sleep train is collecting pajamas for foster children, big and small. bring your gift to any sleep train and help make a foster child's night a little cozier. not everyone can be a foster parent but anyone can help a foster child.

so you're looking for a loan? how's your credit? i know i have an 810 fico score, thanks to the tools and help on experian.com. and your big idea is hot dogs shaped like hamburgers? nope. hamburgers shaped like hot dogs. that's not really in our wheelhouse... you don't put it in a wheelhouse. you put it in your mouth. get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90%

of credit decisions. you are watching cnbc "squawk on the street." the moment of silence was for former governor mario cuomo. our apologies for not stating that more eloquently. the ten year below two. takes us back to that middle of october day we hit 186. not there quite yet but not that far. >> very disappointing. i have to wonder where we don't get some mortgage pick-up. the banks have to loosen up credit. it's back. >> there's the opening bell.

the s&p at the top of your screen down at the big board, only make believe, an organization performing interactive theater for children in hospitals. and over at the nasdaq lifeway foods, a supplier of kefir culture dairy products. >> i think it will be a big stock. >> if you are why kraft or nestle, don't you have to wake up and smell more than just the coffee? >> you think so? >> yes. look at the kroger numbers. look how great kroger was a performer. look at the way whole foods came back at the end of the year. people just want natural and organic. those companies are dinosaurs. they are. when dinosaurs ruled the world,

that ended. >> they did hang around for a million years. it was a good run. we should be so lucky. >> michael kors down more than 5%. credit suisse cuts it to neutral today. they argue promotional activities up. margin pressure accelerating. price target $103 to $79. >> that's brutal. the stock has been horrendous for a long time. people like kate spade more than coach. i don't care for the handbag business. it's too competitive. what i want to do is swap out a kors and go into constellation brands. upgraded by goldman stocks. watch this stock. the numbers are way too low. i've done work with these companies in part of a side job i have at bar san miguel. they are making a portion. beer kills it. >> the best performer on the s&p, up 4.5%. >> deservedly.

>> ever since they did that deal with the justice department stepped in. that's been off to the races for that company. >> it's a very good company. mr. sands runs a good company. what is important to remember this is an olygopoly. miguel and corona are hot brands. craft beer is hot but those pierce are hot. >> they cut pvh. >> that was brutal. they have a good cotton background. under armour. kevin plank is a competitor. there is room for both nike and for under armour. under armour is a more expensive stock. i agree with the upgrade. they also like dick's sporting group. that's tougher. that's pricey. you are dealing with a company that has too much golf exposure. maybe the numbers will look

better. >> while you were away wba became an official ticker as walgreens. put comps together for december up 9.2. front end 2.6, not bad. >> worldwide boxing association is back and bigger than ever. these are terrific numbers. my charitable trust owns it full disclosure. every drug store company is on fire. rite aid reporting great numbers, cvs. it's the nature of the beast. this is unfortunately, knock wood a terrible cold and flu season. >> happening earlier than normal. >> year over year is going to i hate to make money off this year over year will help. did you get your flu shots? >> i did, but apparently it may not have as much efficacy. they didn't get the strain right. >> if you get it twice does that help? >> ideally you take it in october. it's late for me. >> too many.

my kids fell by it. purell season is here. >> especially on shared keyboards like these. >> there is a grain alcohol that there is a maker of for all those hand sanitizers. >> if you are at a gym, clorox kills everything. >> cc corp? >> really? >> oracle gets an upgrade. >> that was a survey. it worked last quarter. my hats off to those guys. they gravitated to the cloud faster. a lot of people think the cloud is back. i had an interview yesterday with john chambers on "mad money." he is talking about a level of data growth a level of video growth that is shocking to me. remember a lot of people felt he got off the reservation when talking about this explosion of data that would come 2015 2014. he was dead right. talking four five times more

than everyone else is talking about. we have cs, good coverage there. video is exploding. >> does it lead us to a discussion about? >> sure. i was going to do it on verizon as much as anything else. that was involved in the reports from bloomberg about potential talks between verizon and aol what they said was a joint venture or outright takeover. mcadams of verizon is going to be presenting at syly's telecommunication conference taking place in las vegas. apparently last night there was a dinner as well. i tried to confirm this with verizon, but the notes i received from those attendees indicate mr. mcadam was speaking. when it came to aol, he seemed to squash speculation there was anything really going on there. discussing the fact that really

they are thinking about video in a variety of ways at the company. but there's not really anything specific going on with aol. i'm looking at the notes here. coming out of work on video. we've been speaking to everyone. the notes i have say it was an irrelevant story. the way it was referred to. we'll hear more from mr. mcadam will be speaking. >> aol is the king of video online. i understood the logic behind it. it's always good -- as i e-mailed you when we were talking beforehand i said david always does this thing. don't ever let the facts get in the way of a good story. this was said to me when i was a homicide reporter. the facts indicate this is not a good deal. >> i don't think so. we know verizon is looking at any number of things. when it comes to that company, something i was referring to earlier would seem to be

foremost in investors' minds. how much money have they spent at these auctions? in answer to a question about that i believe mcadam, they say it was from the ceo. wouldn't talk about it. they can't except to say we love to talk about it because there is a lot of speculation we look forward to clearing up. there are some who say maybe that will mean they spent less than we think which would be viewed as a good thing or maybe it will mean they spent a lot which could be viewed as a good thing depending on your view. there's a lot to come on verizon which we'll be reporting earnings in the not too distant future. these auctions will conclude so we'll get more clarity from that company about its plans there and perhaps about what it means when it comes to video. the market wireless he said is all about video. >> john chambers is saying you can't afford to not spend.

talking about european spending even. service provider spending he did say on the previous conference call -- >> chambers we are talking about. >> right. remember you are dealing with some mergers that could freeze spending. now you are getting into spending on spectrum doesn't help capital ventures. >> we should mention news out of our own family today. cnbc announcing by the fourth quarter of this year our daytime business day programming will no longer be measured by nielsen the ratings company but by cogen reports. our bosses argue for years nielsen struggled to mention our dayside viewing for the fluent audience in a hotel or in a restaurant or country club. they finally decided to do something about it. >> i work for cnbc. i have to admit ceos who are completely not measured by nielsen do watch the show.

>> they absolutely do judging from their e-mail. >> everything we say is under scrutiny by the ceo. >> nielsen down by 1.3% this morning. there are no shortage of critics of that company when it comes to the media landscape. how they've measured is the crux of the argument and whether they are advanced enough. can you capture that in an effective way so advertisers know what they are getting? >> the time shift, "mad money" 6:00 to 7:00. a lot of people are doing something else and watch it later. does that measure? no. is our program measured? most people work in the country. it's still something i discovered. they don't all play video games those though numbers are good. >> one reason electronic arts is doing okay today.

>> and don't forget take two. >> dow up 27. bob pisani is on the floor. >> good morning, guys. we had a decent start. all ten sectors of the s&p 500 were up. we maded a little bit. energy is lagging. health care is a leader with the utilities. big topic on the floor. i came in early, bob, did you see the bond yields? what's going on in europe? the numbers were staggering. traders, that's all they were talking about this morning. at one point the german bund yields were down 15%. we were at 0.44%. it recovered a little bit, the yields there. france was down 10%. that was yielding 0.72%. it's recovered a little bit. they are higher than earlier. ours are down below 2% for the u.s. if this is not a sign of concerns about deflation, i don't know what is. when stock traders talk about the bond market and bond yields pay attention. that is not normally on their topic of conversation list.

other thing, other macroissue is the oil situation with crude trading in the $40s. a lot of traders are nervously eyeing the stock markets for the major oil-exporting companies. you can own them through exchange traded funds. russia brazil russia dropped 30%. you can own nigeria in an exchange-traded fund. nge. that stock has been all over the place. that is down about 30%. it's down another 3% today trading at 10%.

a raft of retailers should be reporting holiday sales. barnes and noble, american eagle, pier one. hopefully they can talk about improved traffic due to the lower gasoline. surveys are suggesting consumers are spending the money. national retail federation holding to its 4% increase for holiday sales. that is a good sign. auto sales yesterday were terrific. my concern is every little dollar. at the end of the day i got a whole raft of inquiries why was apple down five days in a row? it was $113 and $106 yesterday. apple now trading negative. a number of people wanted to

sell not to pay the taxes. they don't have to pay them for 16 months. you can see apple going negative here at the open. back to you. >> thank you for that bob pisani. let's get to the bond pits. rick santelli at the cme. >> good morning, carl. traders on the floor have a bit of a smile. look for yourself. here is a two-day chart of the spread. the difference between bunds and ten year. you can see we've been up well over 1.61 1.62. look how it dropped back to that 150 mark. let's i's open it up to november. 1.50 seems to be its comfort

zone. when you see it widen out within hours or trading sessions you see u.s. yields coming down to bring that spread back in line. it's a huge trade to pay attention to. let's look at the individual parts. let's look at our ten year for a couple of days. you see 1% 2%. carl adequately pointed out exactly what you are supposed to pay attention to. the 1.86% intraday low yield from october 15th. bund yields 44 45 basis points seems to be the low. they are on the move. maybe because of what draghi may be forced to do to morph the qe program. how it's in front of that really putting pressure on him to deliver. it's not only those yields it's in the uk. it's under 1.60. lowest closing yields since the summer of 2012. much further back than our may of 13 regard with our ten-year

yields. just to give you a big view of how weakness in foreign exchange is pushing that dollar higher. pay close attention to the bottom area of 119 or ten year of the dollar versus canada. australia would be a similar chart. back to you. >> we'll talk to you soon rick santelli. oil prices got down to $48.47. jackie at the nymex. >> downward pressure continues today. traders are expecting to see a build in u.s. inventories from the department of energy. we get that report tomorrow. we are hovering around $49 on wti and $52 on brent. if we close under $50 for wti that would be key. if brent breaks $50, that could imply wti will see that three handle. what we know from this report

tomorrow is supply/demand divergence could continue. that will add downward pressure to prices. bob talked about the consumer before. i want to give stats to highlight what he was saying. in terms of savings, consumers are saving on prices at the pump on gas prices. also the eia short term energy outlook says they will save 26% on heating oil this winter. they are projected to save 33% on propane and 5% on nat gas. less because of the fixed cost. when you take that all into account and retail gas prices at $2.19, consumers are set to save big this year. back to you. >> thank you, jackie. >> phil lebeau will talk with ford ceo mark fields about the auto automaker automaker's new technology. roku ceo here with streaming device maker has in store for the new year. >> stocks with a modest bounce.

[container door opening] ♪ what makes it an suv is what you can get into it. ♪ [container door closing] what makes it an nx is what you can get out of it. ♪ introducing the first-ever lexus nx turbo and hybrid. once you go beyond utility there's no going back.

sony ceo breaking his silence on the cyber attack against sony pictures which nearly brought down the releels of "the interview." speaking last night he called the hacking vicious and malicious. here is what else he had to say. >> i am very proud of all the employees and partners we worked with as well who stood up against some of the extortionist efforts of the criminals that attacked sony pictures and its employees. >> we talked about the shares up double digits last year because of the end. >> playstation is over taken by xbox. this gentleman seems to be doing a lot of things right and the yen is going away. i still think japan is a terrible place to invest but hedge funds want to be there. >> they made a lot of money

short in the end. it's unclear whether they are going to be able to get their way out of the funk. did you see the number on japan? >> they need china to do better. china should do better over energy. look at those numbers, spending's not so hot. how are they hurt by infrastructure? china can do better. they are big consumers of energy. >> that's true. we'll get stop trading with jim in a moment with the dow up 42 points. well, a mortgage shouldn't be a problem your credit is in pretty good shape. >>pretty good? i know i have a 798 fico score thanks to the tools and help on experian.com. kaboom... well, i just have a few other questions. >>chuck, the only other question you need to ask is, "what else can you do for me?"

i'll just take a water... get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90% of credit decisions. in my world, wall isn't a street... return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars.

time for cramer and stop trading. >> i like biotech and drug companies because they keep reinventing themselves. alks will be up because they have a new depression drug that reduces depressive symptoms almost in the first week. 66 patients studied. not a lot. eight weeks later really good. this depression market is the largest. richard park owns this drug. they takes drugs that are short acting and do long. the stock has been a horse and is going to get faster. >> last night you said don't

think all biotechs are one-trick ponies. >> look at regeneron up another seven. these companies reinvent. regeneron with a new anti-cholesterol drug celgene came down. agios pharma has the next cancer cure. this group is underestimated. biogen reinvents themselves. they reinvent and everyone wants to sell them gill yacht at $110. i'm saying saying to yourself what am i selling? you are selling the future. i don't like to sell the future. you're selling progress. don't short it. >> don't sell progress. >> progress is their most important product. >> what's tonight on "mad?" >> dogs in the dell. these are canines and some surprises for people when i pick among the dog pile there. >> last night you did the top

five. >> home depot will have a great year. some are doing amazingly. >> see you tonight. "mad money" 6:00 p.m. >> thank you. >> breaking news on ifm services. first impressions are important. you've got to make every second count. banking designed for the way you live your life. so you can welcome your family home... for the first time. chase. so you can. hi. pete and jon najarian here in new york city outside of the nasdaq,

where we bring you live daily market updates. and today, we have a very special free gift for you. so many viewers e-mail us wanting to know our secrets on how we trade options. so we put our secrets into a new book. and if you're one of the first 250 people to call in right now and just cover shipping and handling we'll send you a copy for free. look at the rate of return we've made on some of our recent options trades versus what we would have made had we just bought the stock. there's no comparison. to make the best returns in today's market, you have to learn how to trade options. and our book will show you how to do it for free. jon has been trading options for more than 30 years. pete is one of the top 100 traders in the country. and our book will teach you how to trade options for free. so call now. [ male announcer ] call the number on your screen now for your free copy of jon and pete's new book. that's... (see the number on your screen) call now.

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ the evolution of luxury continues. the next generation 2015 escalade.

good morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, simon hobbs and david faber at the new york stock exchange. we are coming off the brutal punishing in the markets. dow trying to make a stand up 35 points. oil has been weak early in the session down to $48.47. the real news is going to come in a moment when we get ism. >> let's start the road map. live from cs in las vegas. ford ceo mark fields will join us live with a look at tech behind the wheel. >> the ceo of broadcom tells us how they are powering new smaller top boxes for tvs. >> the keystone pipeline in focus as the new congress is sworn in today. we'll talk to senator john hoven

who is sponsoring the bill. here we go ism nonmanufacturing, service sector recent read of december expecting 58 survey says 56.2. last month stands unrevised at 59.3. keep in mind last month at 59.3 was among the top few of the all-time highs. 59.6 in august. highest read the second month after its initial release in 1997. that read was 62. 56.2 disappoints. factory orders are down 0.7, bigger down than expecting. looking for 0.5%. that's the november number. let's dig through the internals on ism. we like to look at the employment number index, especially this week. moved lower from 56.7 to 56. new orders now stand at 58.9.

that's a big drop from 61.4. for the most part, some slight disappointment but from ism nonmanufacturing, a disappointment from a lofty. interest rates four basis points under 2%. that's but bunds are four basis points above 40 basis points. you are getting about 0.8% in europe. that seems to be the driving force in treasuries. sara eisen, it's yours. >> borrowing for free. for more on the markets, big moves and oil's renewed slide let's bring in christina cooper. francisco, we'll talk about oil in a minute. on this weak economic data weaker than economists were looking for. does it worry you at all or trouble you or make you rethink the fact we have seen 4% 5% growth rate in this country? >> it doesn't. it's one data point. we are likely to see some less

than terrific data points along the way as we recover. make no mistake, this is a strong recovery. what we've seen is the consumer coming back. for the last five plus years, many americans haven't participated in the recovery. that's changing. lower and middle income americans are participating more in this recovery. you have companies more likely to spend. they have done well for several years now. they had wide profit margins. they said it's been about regulation. with midterm elections behind us there is less fear about regulation. there is a direct inverse relationship between economic policy and corporate spending. we should see more corporate spending. >> francisco we watch this aggressive move lower in the price of oil and the price of brent. how long until we get some sort of stabilization until the price of energy adjusts to the new supply and demand picture? >> you say we've come down in a

really fast manner which is true. remember we've come down in an ordinarily fashion. we haven't seen one side of the market. we've seen two-sided market ordinarily declining prices. what needs to happen we need to see, a, strong demand b, some curtailment from opec which i don't think is coming any time soon. or c, some curtailment from nonopec producers in terms of oil output. that is one of the three things needs to happen before prices start to stabilize. we aren't seeing any yet. >> what is your view we've seen the sharp slide along with the fall in government bond yields? rick just quoted the ten year falling below 2%. are you buying into the deflation camp? >> i think that the decline in oil prices is certainly deflationary from a headline

standpoint. there is no question about that. i also think it's quite stimulative for the broader economy. not only for the u.s. but europe and potentially for japan, as well. i do think unfortunately that global gdp growth is way too slow. we need to see more monetary policy stimulus out of japan. we need to see more fiscal stimulus. deflationary risks are meaningful. also because i think emerging markets aren't growing very fast here. that combination of sluggish growth and declining oil prices is actually been a really nice driver for bond prices here with prices heading quite high. >> let me pick that up. stephen england at citi has been writing about the average bond yield is below 1% negative if you take account of inflation.

what we continually say is bond yields have been pushed down because the european central bank may act or japan is doing what they are doing. what if that's not true? if the european central bank couldn't organize a party in a brewery, something more profound is coming from these bond markets, something scary about the fact central banks may not be able to turn these economies around and the future is not what this stock market says it's quite dire. how do you dispel that concern? >> first i would point to the history of the united states. a central bank did turn around the economy. largely it was monetary policy that helped really create this recovery we are seeing in the united states. so it can help. what we know about treasuries there are a lot of different dynamics at play including flight of safety and arbitrage plays. we are seeing a divergent pass.

the united states is recovering. >> you have the two most liquid markets in the world oil and fixed income which are sending strong negative signals. you can't really manipulate the treasury market. it's way too big. it's a high sea of a market compared to any other market. you can't manipulate treasuries. >> you can't manipulate treasuries, but there are a lot of reasons why investors buy treasuries. right now u.s. treasury yields look attractive when you compare them to the german bund. that is driving a lot of what we are seeing in terms of treasury yields right now. >> the action of the volatility we've seen in the past couple of days do you make much of it? does it alter your view or some funky beginning of the year tax-related volatility and selling? >> this is a great introduction to 2015. we expect far more volatility

this year. we just ended quantitative easing in october. we are looking ahead to some time this year moving well within conventional monetary policy by starting to tighten. that is creating uncertainty with markets used to having that qe cushion. expect more volatility shifts in leaderships and rotations as we move through the year. >> good to see you christina hooper. a dutch newspaper leaking a discussion document within the european central bank indicating its governing council has not yesterday made important decisions how to launch sovereign qe and the market could be disappointed at its january 22 meeting by a decision only in principle to by sovereign debt by delays of weeks or months. the leak indicates the ecb is considering three ways to pull the trigger on public qe.

the first option is what the market expects, ecb buying 19 governments' debts. the second option is smaller where the bank only buys aaa-rated sovereign debt to limit the risk. the third option 19 national central banks buy their own local sovereign debt and only they in principle, take the risk. good greece wanted to restructure its debt only its own central bank would be seen buying up greek sovereign debt. i think this is going to be one of the major dynamics over the next two or three weeks. the understanding that the european central bank is not where so many people think or hope it is in the market and its readiness to buy sovereign debt. >> at least they are thinking of options. >> they sorted the options out by now if the market thinks they are going to start january 22nd. this is how do we do it if we get there discussion. >> they have different

limitations and different legal parameters than the federal reserve. >> tech ontos from every globe in attendance. john fortt is in vegas with a look at what's coming up on this show from ces. >> there is a time coming up and they've been announcing everything from improved tvs to beer pong robots and everything in between. let me tell you about a few guests we have coming up you are not going to want to miss. ford ceo mark fields. broadcom ceo scott mcgregor, qualcomm ceo and roku's ceo anthony wood. they all have announcements across the spectrum. don't miss it. >> thank you very much.

when we come back double dose of news makers from ces. first ford ceo mark fields will join us live. ing for pain? i have bayer aspirin. i'm not having a heart attack, it's my back. i mean bayer back & body. it works great for pain. bayer back & body provides effective relief for your tough pain. better? yeah...thanks for the tip! your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions, backed by a trusted network of attorneys. so visit us today for legal help you can count on. legalzoom.

legal help is here. i have a cold with terrible chest congestion. better take something. theraflu severe cold doesn't treat chest congestion. really? new alka-seltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. oh, what a relief it is. here we go!

tech behind the wheel with big headlines being made over there over driverless cars. phil lebeau is in las vegas talking about the vision for the future of driving. phil over to you. >> thank you, sara. i am here with mark fields. let's start off with the big statement you made last night. you think within five years we will see a fully autonomous vehicle introduced in this industry here in the u.s. >> i think as you look at the technology advances around sensors, around cameras, the software, i believe there will be in the industry a fully autonomous vehicle. in our case at ford we have semi autonomous vehicles on the road today for people who purchase. in the future you will see a

fully autonomous vehicle. you see some of our competitors talking about fully autonomous vehicles. when we come out with one we want to make sure it's accessible, affordable to the masses. >> america is not ready for it the world is not ready for it. when you hear that reaction what do you think? >> when you think of the examples some of the other technological advancements in the industries over the years cruise control with when it was first introduced there were questions would customers ever on a highway give up control on putting their foot on the accelerator pedal and have the vehicle maintain speed and brake. today it's commonplace. >> people worry about whether these are full proof or could be hacked do you say we can overcome that challenge? >> as an industry and company, safety is one of our priorities. it's where we are developing

these features. you want to make sure they are intuitive and easy to use. and the customer has the confidence those features are going to work. that's what we are working on. >> you need the regulators to sign off of this. when i talk to people in the industry in your company, everybody says the same thing, we've got to bring the regulators along quicker. >> technology in most cases in any industry leads before legislation and regulation. our philosophy is always to be part of the solution engage with the law makers engage with the regulators. as we learn to help along with them and give input to set regulations which customers will feel comfortable with and the industry. >> we had full year auto sales yesterday. 2015 are we going to talk 17 million? >> our range for the industry next year that includes heavy is 16.8 and 17.5. when you look at fundamentals,

you look at consumer confidence. income growth. you look at some of the other sentiment surveys, interest rates relatively low. we still think the economic situation really bodes well for continued moderate growth but growth nonetheless. >> does the tremors in the market whether coming from the energy sector or wall street or elsewhere, does that give you any pause right now? >> we are always looking at the business environment, phil. we are looking at it literally every single day. when you look at the oil prices and what's happened that's good for the consumer. it will put more money in their pocket. i don't think it will juice the industry above the growth we are seeing. it may impact the type of vehicles customers are going to want. in that regard i think customers will still want to get good fuel economy in any vehicle they buy. that's why we are offering that across the board. >> mark fields ceo of the ford motor company. there you have it. within five years we'll be back

here fully autonomous vehicle here in the u.s. somebody will introduce it. >> very nice work in the hallway, phil lebeau in las vegas. thanks. staying in vegas at ce seven, let's send it over to john fortt with broadcom ceo scott mcgregor. >> it's happening in vegas so we are staying in vegas. thanks for joining me. you made a number of announcements including ethernet in a car. this is related to all of the wiring of the various electronic functions we are going to have. what is this going to allow us to do in our cars the next few years we can't do now? >> cars are becoming intelligent. all parts will get wired up with higher bandwidth. we think of the car as the living room on wheels. the back seat of the car seeing games and tv. you'll see high-definition content. the car will have additional features for driver safety. all the sensors in cars so you know if things are going well.

the car will be a nicer place to spend time. >> we've got wearables that are big buzz words at this year's shows as in the past. what i see is the itunes problem. lots of different sensors, lots of data not a lot of great ways to manage that. what are you seeing in wearables that's interesting? what will bring this all together? you've got chips that are power efficient. how are we going to manage it all? >> broadcom makes the chips that enable us to talk to one another. we work with customers doing the internet devices. some create content, allow you to see the content and control things. i have a ring here. this is a device that allows you to point at different devices. you can control a tv a presentation. you can change the volume all by gestures. >> that should be green.

it reminds me of green lantern. >> indeed. this will allow you to control devices out there. internet of things is important. if you look back at the previous century, it was bringing electricity to appliances and things. now it's about bringing intelligence to them. this will be making all the devices intelligent and more useful to you. >> let's talk about the home. lots of talk about 4k. prices for the tvs have come way down. how big of a focus is that for you? are you making bets how long until we get mass consumer adoption of ultrahigh-definition 4k viewing? >> we've seen 4k for a number of years now. it's been impressive. the question is when does it become mainstream? it's becoming mainstream. you are seeing a large number of sets out as reasonable price points. >> under $1,000. >> exactly. and under $1,000 now. you are seeing content.

you had a great tv but you couldn't watch it. we are seeing set top boxes that support 4k. >> the size of a smart phone we'll start seeing settop boxes. why do i want a set top box that small? it doesn't need power. it still does. the term used to be you had a big tv set in a big box and big box on top of it. that's where the term came from. we are seeing set back boxes where you velcro it to the back of the tv set or more the size of a stick of gum and you put it in a usb or ultrahg slot. it enables you to get the form factor down and more affordable. it's not these big boxes in the living room. >> home automation. are we going to see that market accelerate? i hear it's take truck rolls and visits to get these installed. it's not accelerating on a mass

scale. >> it's early days for a lot of this stuff. we are starting to see things attractive for people. putting cameras in your home whether you want to see your pet, child or see your house when you're away on vacation. this is the stuff i think will drive the wave of this. there are different ways to do it. there is the do-it-yourself market and phone carriers. at&t is doing a great job putting all the different devices and providing a service for you to enable that to be simple. >> you can't pick a favorite kid or partner, one trend you think is maybe undercovered or underappreciated we'll see play out? >> i think people underappreciate how much the intelligence and connectivity is going to appliances. that and medical. improving your lifestyle. understanding your body. you get born with one.

you've got to take care of it. understanding that and know more about that will be interesting to people. >> i could get down with that. back to you. lots going on here at ces. >> busy couple of days for you, john fortt in vegas. the ceo of roku will be on "squawk alley live." he'll discuss the future of tv and plans to go public.

markets at session highs. we had a sell-off after ism services came off a ten-month low. we expect more chop later in the session. let's get to dom chu. >> we are watching shares of michael kors right now. the clothing apparel company is

falling after credit suisse analysts downgraded the stock to neutral from prior outperform rating citing a dramatic ramp in promotional activity across the u.s. retail landscape for hand bags. those shares down by 6.5%. back to you. >> thanks dom. president obama facing republican-controlled house and senate as the 114th congress is sworn in today. the keystone pipeline is one of the top priorities. republican second john hoeven is sponsoring a bill that will okay keystone. barbara just bought a bike. she wrote a tweet about it. you can't learn much from that. but take data from millions of tweets combine that with your company's supply chain and sales data. apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from,

where to sell them. because barbara and the world just told you how to build a better bike. there's a new way to work and it's made with ibm. hi. pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. and today, we have a very special free gift for you. so many viewers e-mail us wanting to know our secrets on how we trade options. so we put our secrets into a new book. and if you're one of the first 250 people to call in right now and just cover shipping and handling we'll send you a copy for free. look at the rate of return we've made on some of our recent options trades versus what we would have made had we just bought the stock. there's no comparison. to make the best returns in today's market, you have to learn how to trade options. and our book will show you how to do it for free. jon has been trading options for more than 30 years. pete is one of the top 100 traders in the country. and our book will teach you how to trade options for free. so call now. [ male announcer ] call the number on your screen now

for your free copy of jon and pete's new book. that's... (see the number on your screen) call now.

one hour into trading, here are the stories we are watching. it is 7:29 on the west coast, 10:29 on wall street. ism surfs so coming in below expectations. down more than three points for a december reading of 56.2. prices paid component 0.50 the first time since september 2009. factory orders falling a fourth consecutive month down 0.7% in november. that according to the commerce department. anthem is the biggest gainer up 3%. deutsche bank upgrading the health insurance from buy to hold. the 114th congress being sworn in today with republicans set to control the house and

senate. what does that mean for wall street? kayla tausche joins us. >> there are potentially a lot of changes with the new congress being sworn in today. wall street is bracing for many to have a near-term impact. here is what they are watching. the renewal of the terrorism risk insurance act. it died due to a wall street-friendly rider that exempted nonbanks from holding collateral when they traded derivatives. republicans say it's a must do. it will likely make it through with something wall street pushes for that the white house doesn't necessarily like. that doesn't mean rolling back dodd-frank all together. it's now the law of the land. certain parts of the law could be edited like the consumer financial protection bureau which could see a push for a new governing structure that emulates other regulatory bodies. the senate is expected to take up a bipartisan bill that allows them to declare chapter 11.

that makes tax bailouts lease likely. there are people moves. the controversial appointment of antonio weiss as treasury under secretary which garnered a surprising and some say unfair amount of criticism last year. there is the nomination of loretta lynch of new york's eastern district to helm the justice department which is pursuing several investigations into wall street activities. two new nominees set to come for the federal reserve. one we know will have community banking experience. the other is unclear. a lot of the same debates but many new voices. richard shelby of alabama. those could change some of these outcomes from wall street. we are seeing a new populous debate resurface against wall street. something banks thought died a couple of years ago. the farther away we got from the financial crisis. we've seen with elizabeth warren's conversation topics we are not through with that yet.

>> she is fired up. i don't know if we heard if there is said to be more fed board nominees and potentially the next one coming with community banking experience. that could impact. we are waiting for the white house on that. >> community banks were actually part of the early part of the recovery. wall street wants to make sure as well there is some easing of regulation for community banks so they are seeing a loan growth that the rest of the recovery is seeing, as well. it will be interesting to see who that nominee is. it is required by law that the fed have someone with community banking experience on the board. >> with the more political conversation of boehner's challenge today. the front page of "the washington post" saying, yet another mutiny in progress. this unlike l ily to succeed. >> i loved the word "mutiny." it seems a symbol but maybe only a symbol of the discord

that remains and whether they can disagree. >> we had eric cantor saying don't relitigate the past six years with health care a lot of issues. a bill is going to be introduced on keystone. there is a bill coming through on keystone which is one of the big decisions that the president has to make whether he is going to veto that. i wasn't sure whether we have the alaska supreme court come through with its judgment. that was the last remaining issues before they could get any movement on that. keystone will be a big one, as well. >> and a galvanizing issue. >> to prove that point, let's get to rick santelli for a special edition of the santelli exchange. raring to go. over to you. >> absolutely raring to go. hopefully the 114 congress is raring to go. i'd like to welcome a member of that new congress senator john hoeven republican north dakota. thank you for taking the time this very important tuesday morning. >> good morning, rick.

how are you? >> very well. thank you. we have the hoeven-mansion bill. what do you expect today? do you think keystone will pass? >> we'll file the bill today. there will be a hearing tomorrow. we'll mark it up on thursday. bring it to the floor by the end of the week. then beyond next week for amendments. we anticipate an open amendment process. that's part of our regular order to get the work done for the american people. >> open process amendment. good old-fashioned senate billing again like in slap shot. good old fashioned hockey. what you are going to do is make it so the newspapers and media can now write names and say who is for what and who is against what versus all the boards we

had in congress in the past where everybody seems to be on one side or the other. you can never pin any senators or congressmen down. your thoughts? >> that's the idea. this is not only perfect energy legislation, it is about having an open amendment process, restoring regular order, having an energy debate. let senators bring their ideas forward. we'll debate them. if they can get 60 votes, got to be bipartisan then it passes. that's how we hope to breakthrough the gridlock and get things done. >> it's almost as though there is special treatment for trains. the president pushed back on this. a, obviously a pipeline is a lot better than trains unless there is some reason to keep it on trains. seems like we are debating the trans alaska pipeline in the early '70s. the ire about the environment and different species was for naught. your thoughts? >> it's hard to understand

because this project has been delayed more than six years by the president. the strategy is defeat through endless delays. this is a pipeline that will move energy more safely and cost effectively. it will take congestion off the rail. and have a comprehensive energy plan for this country, we've got to have the infrastructure. 70% of the american public wants it. this is something the american people want done. >> it blows my mind that the president's pushing back on this because it's an infrastructure project that ends pretty much most infrastructure project ends. by my house there is a bridge they should have built ten years ago. what difference would it make? infrastructure is a giant puzzle. when you look up at the board and you see the price of oil, do you think american technology made a difference there, sir? >> absolutely without question. >> did you hear the administration or most congressmen say why would we

want to do fracking? it's not going to make gas prices go down. >> that's it exactly. the reason gas prices are down at the pump is because of all the energy we are producing in this country with hydraulic fracking. not because opec decided to give us a christmas present. >> last i looked wasn't canada an ally? all of this it's their oil, whose oil would we rather process, countries where we have military involvement in the past or a friendly northern neighbor? final word, sir. >> that's right on. working with our closest friend and ally canada and producing energy in this country. we can truly be energy secure. that benefits our country, its jobs, its energy security. i tell you what it helps us compete in this global economy. it's good all around. >> senator, thank you for taking the time. you better hurry up. i want to see output from this 114 congress. thank you for being our guest this morning. >> thanks rick.

good to be with you. >> back to you. >> thanks. let's get over to dom chu. bill grossman didn't say nice things. >> in his monthly investment outlook of the former pimco founder and ceo is now at janus capital. he is there with his investment outlook saying that when the year is done there will be minus signs in front of returns for many asset classes. the good times are over he says. also saying when it comes to future expectations for asset returns, there comes a time when common sense must recognize the king has no clothes or at least he is down to his fruit of the loom briefs. he goes on to conclude saying investors should be cautious and content with low positive returns in 2015. the time for risk taking he says has passed. this follows on a lot of janus

outlook thesis from yesterday. one of which he says asset prices depend significantly on economic growth. he does not look for economic growth to be the magic elixir for 2015. almost all economies, says gross, are facing structural head winds. saying the growth picture around the world slowed down. he expects that those asset returns, the best ones those days have passed. back to you. >> it's always tough when you listen to one of these kings of the bond funds who by their nature in fixed income do well when other things look desperate. jeffrey gundlach paints a picture of the world equally as dire. >> absolutely right. up next the s&p and nasdaq have seen significant losses over the past week. one sector is bucking that trend, health care. down only slightly compared to the broader markets. should you buy health care again this year? she inspires you. no question about

that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any allergic reactions like rash, hives, swelling of the lips tongue or throat or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial.

why do we do it? why do we spend

every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with efficiency? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well-equipped volvo xc60 today. visit your local volvo showroom for details.

while the markets struggle to pick up steam across the board, the pharmaceutical sector continues to soar outperforming the s&p and nasdaq. will the biotech bull run continue? here to discuss more about that michael yi over at rbc capital markets. >> good morning, guys. >> are we undoing the whole scare regarding adv? >> we saw headline scare there and seeing the stocks recover right back. a lot of that was already expected. that deal with express scripps rebating. you'll see people get back to more rational behavior. >> is this about gilead and cvs

or growing realization some of these companies aren't a one-trick pony? >> it's rational behavior and already expected. a lot of that was already in the numbers. people were shooting first, asking questions later. we came back and realized that wasn't a big impact to the model. people are expected advie to get 80% market share. >> you are gearing up for next week one of the biggest events of the year in health care and for investors, the jpmorgan conference in san francisco. what are you expecting to the news worthy. which companies should we be watching for headlines? >> we are most focused on celgene. i think celgene puts up a good q-4 preannouncement. i think they beat and give 2015 guidance. there is some chatter they may give a longer term outlook that is bullish. we like celgene. vertex we like.

possible they put up good data. by the end of the month they put up good cystic fibrosis data. >> we are heading into the thick of conference season. is this generally a good time to take risks or not? we've seen trials go both well and bad. >> what i do like about the next month or two is that biotech has a seasonably strong q-4. when these company report out the numbers in the next month or two, i think you are going to see good numbers particularly out of biogen celgene and gilead looks good as well. that's a good time to be buying numbers. >> you mentioned the top three mid cap themes to play in 2015. doesn't get as much ink, but what would they be? >> hepatitis-b stocks. immunotherapy stocks. juno and gene therapy stock. you are seeing a bunch of those names moving.

it's about big innovation in biotech. those themes you'll see play out a lot in 2015. >> if 2014 was merger and m&a activity, do you think we'll top that? >> i don't think we'll top it. gilead just did another deal this morning. you'll see gilead do more deals. the fact of the matter is pharma still needs more innovative drugs. you are seeing 60 ipos in biotech last year. some of those could be consolidated over the next year or two. that theme hasn't changed. we like biotech for the m&a, valuation and you are continuing to see innovation. look at what's going on there. macro is tough outside. none of that has anything to do with innovation going on in biotech. >> what about pricing pressure? we saw it heat up in hep-c. is that the biggest risk to the outperformance of the biotech sector which has gone on outperforming the s&p the last five years? >> i think you'll continue to

see some pricing pressure. whether that's hep-c, multiple sclerosis. i'm not saying the sector is about risk. some of this is expected. we expect to see some of this. some of this is in our numbers. what is more important, you've got innovation. if you've got $5 billion to $10 billion pipeline drugs, what difference does it matter if i see 5% pricing pressure on the topline if i have huge upside? that's why people buy biotech stocks. you buy it because of the pipeline. that's what we continue to see. >> what a year it's been. we are off to another tumultuous year. thank you, michael yee. early gains slipping away. look at the energy sector in the red. oil falls once again. dom chu back at hq with more. >> just slid back down to the negative side. energy stocks have been all over the map this morning. they are trying to rebound from

yesterday's massive sell-off. down 4%. among the gainers in today's session, apache. marathon oil and anadarko petroleum and pioneer natural resources. investors are hoping to find a bottom. we know this energy trade has been very much a downside biased and heavy one for six to seven months now. when we come back it's been a rough few days for stocks. all three indices with losses more than 2%. how do you set yourself up for what's ahead? art cashin will join us at post nine in a moment.

you total your brand new car. nobody's hurt,but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had a liberty mutual new car replacement, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. new car replacement is just one of the features that come standard with a base liberty mutual policy. and for drivers with accident forgivness,rates won't go up due to your first accident. learn more by calling switch to liberty mutual and you can save up to $423. for a free quote today,call liberty mutual insurance at see car insurance

in a whole new light. liberty mutual insurance.

good morning art. >> good morning. >>'s what happening out there. >> the dow rally or the bulls trying to fight off three

earlier feinting spells and looked to be succumbing to this one. i think the suspect european close is approaching and that's putting more pressure on things. we have to be very careful and not get much lower than this. because i think we could get another downward spiral. so the market is coming back from a cardiac event and just doesn't know how strong it is. >> it seems very binary. what happened at the beginning of this year that changed sentiment so dramatically? >> some feel that it had to do with tax selling and some profit taking. but i think more importantly it is what happened in europe. the idea that they would talk about the potential exit of the greece from the euro zone. and that spilled over to spain and italy and portugal and put

pressure on things here. great disappointment. we're looking at the positive seasonals but santa claus and his sleigh got hijacked we never got the rally. >> the ecb has notebook nowhere near sorted it self out for the sovereign qe. no way they can launch that july 22in'. >> i agree. i have said i don't know how draghi is going to get a full qe going. i'm not sure that is a possibility. but it is nagging on us. the free fall in oil has gotten people going. there are some estimates of possible $30 oil. and brian reynolds from rosen blatt you've had on from time to time says oil could go to 20 dollars and maybe stay there.

>> is that the asset that you are watching first when you wake up in terms of where the market is going? and at what point did it become a bad thing? it waivers from a big -- >> it was the extent. initially it was going to be a benefit. everybody was using the phrase a tax break at pump. and things were going to get better but it has come down somewhat violently. it is going to impact things. the high yield indicators have moved up. people are concerned ma thab 15% of the high yield debt is involved somehow. fracking and oil and energy. and will people be able the to pay it back. we have fears in the background. it is not panic but there is concern. and more a buyers boycott today than heavy selling. >> and when the year is done there will be a minus sign in front of returns one is saying

the good times are over. what context do we put around that? he is a bond guy. >> i understand that. he's had quite a record over 40 years. and i think what he sees is deflationary pressure. i think behind that statement is the concept that we're going to see deflationary pressures and that is why he's mildly optimistic as is gundlach on the bonds, we're talking going down maybe 1 and a half percent on the ten year. draghi still trying to make up his plan as he goes along and these guys seeing deflations and what is the that is behind the concerns here. >> let's go to kayla tausche for "squawk alley" next. >> chock full of content from the consumer electronic show in las vegas.

and walt mossberg will review everything from the tablet you can write on with a regular pen and a iphone pad that plugs into the wall. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five but now is a good time to get the ball rolling. keep in mind medicare only covers about eighty percent of part b medical costs. the rest is up to you.

that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free [decision guide]. it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement

insurance plans endorsed by aarp an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free [decision guide] and start gathering the information you need to help you keep rolling with confidence. go long™. ♪

three days before the big job report. so another opportunity to nail the number. for the december payrolls. the handle at squawk street with the #nail the number. and the lucky winner will win a cnbc umbrella autographed by all of us today. this could come in handy. >> and will you be signing sarah ice ice eisen or the germ spreader. >> let us know what you are expecting. you have until one minute before the jobs report lease. with that we'll say good luck and hand it to you carl for "squawk alley." >> thanks so much. good morning it is 8:00 a.m. at the consumer electrons show in las vegas nevada 11:00 a.m.

here on wall street and "squawk alley" is live. welcome. joining us this morning is kevin o'leary. jon fortt live at the consumer electronic show in las