a lot of envy. magnolia bakery across the street. i'm jealous. fully admit it. >> that would have been bad for you and waistline. better to be here with no food whatsoever. >> i have squawk-enfrouda. you're welcome. and welcome to "theeverybody. i'm kelly evans at the new york stock exchange. >> we've had quite a day. this last hour instructive. very volatile day. looked like a bounce from yesterday. but then it fell on -- we had a really climatic kind of selloff and a flight to safety. and now we have come back again. >> right. that's -- earlier today looked like giving up 500 points in 2 sessions on the dow and coming back. an interesting thing to watch perhaps is 1% range on the dow if we have a decline there. it would be more unusual for that back to back activity.

bill there's plenty of attention on what a poorer start this trading year is off to and not just any day or two days to see this kind of pressure but the two days to kick off the year traditionally not a great sign. >> two other markets very quickly. oil, yes, we continued lower again. big time. down another almost 4% on wti. we are now at $48. it did touch the $47 range and brent is threatening to go below $50 at this point. let's show you if we can the 10-year yield. it touched 1.88. at its lowest point today taking us back the lows of last october. >> yes. on your screen there, you are seeing the 10-year u.s. treasury note below 2%. the 30-year well below 2.5%. i mean, we are talking about levels we haven't seen since the financial crisis and there is a big element perhaps of what's

happening overseas but let's talk about it in the exchange. markets see the dow off 92. nasdaq off 39 and s&p off 11. >> joining us in that said exchange today, margie patel, david kudlow jeff reeves samuel stovall and rick santelli with us from chicago. sam, i am going to ask you that question i was mentioning earlier. you know the stock market is down about 3% plus in the last couple of weeks here. why is that do you think? what's going on here? >> well i think that an awful lot of investors bought into momentum heading in toward the latter part of 2014. they -- a lot of active managers realized they were behind the benchmarks and so i think trying to squeeze out as much alpha as possible and then basely after they've had all those good names put on their reports for the end of the quarter now i think they're lightening up on the

names. we are seeing concern creep back in obviously, regarding energy and regarding earnings. s&p capital iq estimates calling for less than $125 in earnings for 2015. >> wow. that's fresh pressure on the energy space seeing across a bunch of names today. jeff would you describe the drop in oil prices as a spring or as a trap for the u.s. economy or markets? >> it is a big concern. the biggest thing is energy investment. we saw halliburton lay off 1,000. conoco phillips is cutting spending by 20% this year. that's a big deal. talk about the research and development you want at amazon but the money big oil spends on investment, jobs rigs that's real money in the real economy and from a macro perspective, it's more than gas prices and consumer spending. a lot of fields in fracking they don't have the jobs there, north dakota hit, texas will be hit and we have seen that so my

biggest concern of a macro perspective is energy investment to see dry up and a big sucking sound. >> is that why the 10-year hit 1.88 today and the 30-year below 2.50? what do you think that was all about? >> i think it's a culmination of lower inflation. we have energy adding to that. i think it's still a concern of flight to safety. the u.s. treasury's most attractive security in the world. so much uncertainty. i think that draws more buyers and keep levels very low even lower than we are today actually. >> do you think they are forecasting? when you see -- those are extremes right now relatively speaking the levels today. are they trying to forecast a much slower economy here in the u.s.? >> i think it's not forecasting a lower economy. i think it's showing that market is distorted by the fed buying so many bonds. and i think that also it says inflation is not going to be an issue and it really says other asset classes are more

attractive than treasuries. >> rick here's fascinating thing of drop in inflation and inflation expectations pulling treasury yields lower. if this suspect a financial crisis, somebody better tell the market! >> well that's not what i think is going on. just look at bund yields at 44 basis points add 1500 an you're right exactly where you need to be in 10s. we could argue the motivation for europe's rates but you know, we could talk about the old party line. there's not enough inflation. and we could all jump to the notion that central banks need to save us from that dynamic but i continue to ask one question. what are they doing to reverse it? i don't see anything. coming to mario draghi little doubt in my mind today the treasuries really weren't about oil and maybe they were an indirect offshoot to the weaker equities. everybody in the world's equities are weaker except china. i think it's what the ecb

floated as to the three choices of qure. it continues to like highlight that they're going to do something magnificent but when you throw out there that there's three possibilities and the meeting's january 22nd, a, the market is nervous, b, speckulator speculators are flooding into the products and also consider tracking the bunds and negative rates out the the 5-year. we do not. the yield curve. at a 1.50 about in a 5-year. today's intraday low on the 10 was the same as 1.88. it was 1.11 in 5s october. so the short end is thinking the fed is telling us the rest of the story and the rest of the curve don't believe it. >> or believe it or see negative effects from it. >> i think the negative effects are here. whether the fed or any central bank can reverse them. >> what do you think about that david? >> well i think that what we're

seeing in the marketings now is about investor psychology and along with what rick said, uncertainty right now. the trade to bonds i think to treasuries is a flight to safety trade. based on when people are looking right now oil falling, $4 $5 in a couple of days, we have oil crisis selling precipitating selling in equities. we look across to pond to europe as rick was talking about. we have the ecb meeting in january that i don't think that he can deliver anything near to what the market is expecting. >> okay. so what ends this david? understanding when's driving it what ends it? >> what ends it? see if today around 1:00 was the capitulation selling. earnings start coming in. aside from the problems in europe aside from oil, when earnings start coming in people look at the u.s. again and say

we have an expanding economy. we had a quarter of 5% gdp. looking for better than 3% next year. we have growing jobs. we have increasing wages now. and earnings coming in. people will come become and say the u.s. stock market is okay. and that's where you want to be. >> speaking of that bottom at least for today that we saw around 1:00 eastern, sam, you think it's time to buy? are there any sectors you see attractive value-wise here do you think? >> well, the sector likely to show the greatest earnings growth in the fourth quarter and starting in earnest next week is health care and a group that still has relatively attractive pe ratios obviously very strong earnings growth and is one of those areas that while investors try to beat them down as we saw last week week before in the biotechs wants to bounce right back. health care is an area that we would maintain overweighting.

>> erp looking at the s&p 500 areas of green on a day like this and, bill you often -- that's where you're finding them. the rate place. the you till is and finding them in health care after the run we have had. jeff, a quick question to you. do you think this sfreng in health care can continue? are there concerns on the policy front as today we look at the inauguration of the gop-led congress? >> i mean i think health care runs far long time in the short term probably the best of a bunch of bad alternatives to be honest. i think the demographic shift to the boomers pushes this. obamacare is bringing customers in. i don't think the gop will gut it completely and it's a tailwind that's pretty good for 2015 and beyond. >> anything you would be buying here margie? >> well i think the industrial sector's actually turning out to be a sleeper sector. people are very negative because of capital expend yours relating. energy services goods but that's

all well-known and so the stocks are reasonably priced for the cash flow. they have a lot of levers to improve the cash flow and might be a surprise sector and do people better than people worried about. >> would you buy a caterpillar and becoming lately a favorite short of big-name investors? >> i'm not interested in caterpillar in here. i think there are industrials more tied to process industries much more better positioned aenl not so directly related to farming and mining which i think are sectors under pressure. other areas will have attractive returns. >> including john deere or others that you can let us know about? >> not really related to the agricultural sector no. other parts, process industries. anything that can improve efficiency in manufacturing i think will do well. >> okay. >> david, what would you be buying here? anything? >> going into 2015 technology

is our most famous sector. >> still? >> we think still undervalued and will do well in 2015. and i agree with sam and jeff on health care. it's a defensive industry that's become more of a growth industry. has done well and continues to do well. obamacare just adding to gains, revenue in that industry. >> i have to tell you, behind the scenes kelly and i were just elbowing each other as you said technology. highest profile technology stock lately has been apple with that tremendous decline. it's experienced in the last, what? >> since late november. >> since thanksgiving peaked and not looked back. does apple look attractive to you here? >> apple is attractive. apple has come a long way since the reverse split and we have seen -- or since the split and we have seen a lot of the technology sector continuing to do well. we think apple has a good year ahead of it. >> okay. >> there we'll leave it. thank you for being here this afternoon on a session where

markets are off more than 200. the dow off only we should say 82. a rough start to the day. a number of data misses. now attention turning to earnings among other matters. >> we have had turnaround tuesday twice today. right? coming up, closely followed wall street strategist byron wien with us today. he's not making predictions. non predictions he is emphasizing. he says the s&p jumping 15% this year and that was before the last 2 days he made that thought known. not a prediction. sticking to that call? he will join us ahead. drivers not wanted. mercedes with the self-driving electronic driving car in vegas. phil lebeau will talk about it. is it a problem of insuring driverless cars? >> cannot wait for that. >> how do you that? tom wilson joins us from vegas coming up.

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welcome back. joining us looks like just slight down day. what a day it's been.

up 80 points on the open this morning for the industrials. then midday a big selloff down 239 at the low. and now we have come all the way back here down 63 points. s&p down about 9. nasdaq down 34. here's the s&p 500 heat map. these are all 500 components of the standard & poor's index and you can see green to red. mostly red, obviously. >> talking about looking for the ports in the storm. alibaba up 2% today. twitter making a big move up 7.6% so who's to say it doesn't pay to take a careful look at the value out there? driverless cars making a huge splash at the consumer electronics show in las vegas. >> where we find phil lebeau in the middle of the fun there. mercedes with the self driving concept car. tell us about it. >> reporter: it's very cool. we had a chance to go for a ride in the vehicle. one of only crews in the world to drive inside this vehicle. the fo 15.

a couple of features stand out. fully aon the mouse. if you're in the vehicle, you wouldn't have to hold the steering wheel. it takes you where you need to go. fully electronic. on the door panels are touchscreen panels to surf the web, look at video. communicate over the internet with other people. very cool technology. built into this car. earlier today we talked with mercedes ceo and asked him, is he a little surprised how quickly autonomous drive technology has come along. here's what he had to say. >> i would really say at least i expected five years ago. and today, our cars in the showroom are autonomous up to 18 miles per hour and we're waiting for the regulator to allow us to do more. technically we are there. >> reporter: almost everybody that i've talked with in the auto industry here said the same thing. the technology is there. it is coming so fast that we've heard predictions of five years

fully autonomous vehicles and a number of executives said quicker. it is a matter of whether or not regular lay fors and the public are ready for these self-driving cars. back the you. >> you know i guess the word autonomous is better than driverless car. that's a scary sound to it. >> the language is telling. after i saw in that audi yesterday, i feel like that future's already upon us. great stuff. thank you, phil. good to see you. >> reporter: you bet. >> how will insurers handing the driverless cars so-called. >> autonomous. >> joining us from the international consumer electronics show in las vegas, allstate chairman and ceo thomas wilson. tom, happy new year. great to have you back. do you say driverless over autonomous? >> we say autonomous. it's going to happen kelly. it's just too good for customers but it takes longer than some people think. we're not waiting. >> when you say we're not waiting, tom, because this is a message it sounds like the

industry is keen to send. the accident rate isn't going to zero and up end the insurance model. why do you see it as attractive and playing the space? >> well first, it's good for consume earls because they spend a ton of money on their carls today. and all this technology's going to make it cheaper. could be $200 a month or so in terms of lower cost and a long time because you got people to buy new cars fix the cars. change the part number and parking lots and going to take ten-plus years and not waiting. what we have done is using that connectivity. we have drive wise to give people lower prices improve the drivinging experience access other people in the low call area and we are in the marketplace today. >> but let me go back to the autonomous cars for a minute here tom. accident wills happen. how do you assign liability? the guy, the person in the car

wasn't driving. who's to blame then? do you blame the auto maker? how do you work that out? that's what i'm trying to figure out here. >> well, when there was -- when the entire system, bill, would be autonomous cars then it would most likely be a system failure and a commercial liability not the person in the car. but it's going to take a long time before people give up the cars and in certain rural areas you will always have it. because that meenls fewer accidents which is a good thing for customers, we're expanding our relationship with them from not just not mixing the car when -- after it's been wrecked or helping them get through medical bills and expanding the relationship to improve the experience with the connectivity. we can get in the car and give them money for doing it. oerls want customers to pay a month and our deal is differently. if you sign up you save $20 a

month. >> let me ask it another way. if there is an accident are the automakers that make the autonomous cars opening themselves up to even greater liability if you point to them saying it's the system failure and you should be paying for this, not the person in the car? >> i think there would be an increased amount of product liability. keep in mind, they have product liability today. they have problems with the accelerators or brakes they're liable for making sure the car works effectively. this expands it some but the benefit of machine to machine communication is it should bring the overall number of accidents down which means the total cost for everybody, whether it's customers for auto companies or insurance companies ought to come down so it's a good thing. >> this is fascinating, tom. like you were just saying i think it could expand the product liability, certainly, would open it up some for the

automakers. some ways what you are saying is going into the technology, you better get the accident rate to zero. >> well they clearly -- they want to do that. they want to keep the customers safe. we're saying not only mean fewer accidents, we are trying to improve the driving experience so if that car breaks down for example, with our drive wise application we can automatically dispatch a tow truck to take care of them. we can tell them where the traffic hot spots are. tell the spouse how long it will take them to get home at the current speed and there's a lot of things we could do to expand our relationship with this connectivity. the connectivity is a good thing. >> is it settled yet, tom, in the industry? is it clear where that liability is ultimately going to fall or is this an issue that's going to be tussled over in the years to come? >> oh i think it will be tus led over. there will be people to debate it. software manufacturer.

not just the auto companies. they make a piece of hardware. they make some software. there's a number of software manufacturers that make middle ware that goes into the car. there's applications which might fail. so it's -- the liability for keeping people safe is really everybody who's involved in the car which is why it's important to make sure we get this right. so while i'm very excited about what's going on it will take a while to make sure we get it right. there's not all autonomous cars in five years. it takes ten-plus years to reconfigure the system. >> phil said it's happening quickly here. they're coming out fast. good to see you. thank you for joining us. enjoy las vegas. >> thank you so much. >> nice to be here. >> allstate chairman and ceo. i don't know. are the drivers going to have to load up on more insurance or the automakers load up? >> this is an issue that's going to be settled case by case. >> it will be tussled as you said. >> for years to come. >> we're tussling here.

buyers and sellers are. down just -- i wonder if it's possible to be positive by the close. >> we'll see. maybe buy the dippers are coming out today. much more ahead from the consumer electronics show. wearables that people want to wear. also up next investment guru byron wien to explain why he thinks the s&p surges by 15% this year and down about 400 points last 2 days. back after this pfr. so no set up fees! wooh! yeah! so i get help from rollover consultants? wooh! yes! no rollover hassle. great. woah oh, we're spiking things, robbie. for all the confidence you need. that's better! td ameritrade. you got this. alright, so this tylenol arthritis lasts 8 hours, but aleve can last 12 hours... and aleve is proven to work

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welcome back. we are trying to turn green here into the close. takes 53 and the dow to do it. 7 on the s&p and 30 on the nasdaq. we were off more than 200 points here before things turned around. a lot of pressure coming in the european session and again the outperformer on the dow today, see in the upper left corner is merck. >> up 3.6%. it's been doing very well. coca-cola again, as well. walmart up there again. to the highs of the day. >> tough session, as well for the financials. no surprise of the moves in interest rates today. >> and others as well. courtney reagan on the mover's beat for us today. >> let's start with michael kors. the retail stuff, the worst performer in the s&p 500 today. downgrading shares to neutral from outperform citing increased promotional discounts for the handbags. gold prices rise.

apple was on track for its worst six-day losing streak since october of 2011 but it's rallying off the lows like the market. we end with ge. one of the worst perform earls in the doug. downgrading the company citing earnings headwinds. back the you. >> all right. courtney, thank you. a lot to keep an eye on there. despite the rough start to the year for u.s. equities next guest expects a strong finish already for 2015. >> he is our old friend byron wien with the ten surprises for the year and joins us on the cnbc news line. byron, these are not predictions. these are surprises. >> things i think are probable events. >> all right. >> a better than 50% chance of happening. and, bill, you wouldn't give them better than a one third chance. >> oh no, no no. knowing who they're from of course i give them a better chance. up 15% on the s&p when all is

said and done for this year. still after the selloff this week? >> yeah. this is the 30th year of the 10 surprises. we have been together for many of them. >> yep. >> very often one or two of them start out badly. and that's happening this year. but i think earnings come through. the u.s. economy is strong. in spite of what's going on around the world. the multiple is just the average of the markets. 1950. we're only selling a little over 16 times. i think we can sell 20 times at some point. so i think the combination of earnings improvement a little multiple improvement we can make the 15%. >> byron, make sure people caught what you said. you think the multiple on the s&p 500 can go to 20 times. i'm curious, do you want it to go to 20 times? >> well you know everybody's worried that we're forming a bubble here but bubbles generally occur if you look historically at 25 and 30 times. they don't occur at 20 times.

so the market you know has been oscillating here between 15 and 17 times. i think we can go to 17 to 18 without any trouble. and i believe stocks are attractive. u.s. stocks are attractive at this point. they're more attractive than new yore year's eve. >> you see brent crude slipping into $40 area. is that or bad thing? >> really feel bill the decline in the price of oil is positive, not only for the united states but for india, for china, for every country that imports oil. and i think it's also a positive from our point of view for iran and russia. because it's more likely to force iran to the negotiating table on its weapons development policy. it's more likely to make putin more conciliatory on territorial expansion in ukraine and elsewhere. so i see oil as a decline in the

price net positive. u.s. consumer 71%. average family income $51,000. average family drives 15,000 miles. uses 1,000 gallons of oil a year. and is saving a buck a gallon. that's $1,000 tax free in their pockets. >> i'm thinking the way interest rates are tracking oil to lower and maybe europe and other things and the surprise obviously already is low levels we're seeing and unless there's no surprise to you. where do you think rates are headed this year? >> i think the fed is going to act earlier than later. so most people are thinking the fed will raise rates in june. i think they may go as soon as march. and so i think short rates will go up. but i think the yield curve will flatten. there's abundance of liquidity around the world and my view is that you are going to see long rates stay pretty much where

they are. >> in f that's the case and the yield curve flattens this goes back to the old debate and the financial kri sis and the deep u.s. recession. if it goes flat or invert this is time around would that concern you? >> well if it only flattens i'm not too concerned. if it inverts i would be somewhat concerned but as inverting is an aberration level and even if the rates rise are so low. we're used to short rates of 4% to 6% and talking about 3% to 4%. >> i don't. >> overall interest rates are attractive. good for businesses and housing. i think housing and capital goods will be two of the favorable areas for 2015. >> speaking of lower rates and i got just a few seconds on this one here you see europe slipping back into recession here. with all due respect, is that much of a respect? given the rate that is are going

on right now? >> well it's a surprise in the sense that draghi is going to engage in a vigorous program of quantitative easing and not going to work. that's the surprise element of that one. in other words, people are counting on the fact that draghi is going to do what bernanke did and it isn't going to work. that's the surprise. >> yeah. byron, always good to talk to you. thank you v. a good holiday and a happy new year. >> thank you. same to you. >> with 30 minutes to go he mentioned housing, durable goods to watch. we are seeing more of a bias towards -- i don't -- what should i say, bill? >> more sellers than buyers right now. >> thank you. that's how we should say it. off a quarter of a percent an the dow. >> jpmorgan chase the biggest loser this week after goldman sachs said that the banking giant could be worth more broken apart than together. >> the idea picking up traction

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a day of zigs and zags big

time for this market. now down 80. s&p's down 10 points half a percent decline there and the nasdaq, very interesting day for technology. nasdaq is lower but high profile technology apple is positive again today. alibaba. twitter especially up 7% today. and there is the nasdaq 100 right now. that's monster.com at the top. people looking for jobs? >> intuitive surgical. tesla. who would have thought a port in a storm like that? tougher day for the financials and jpmorgan chase. goldman sachs saying that the nation's largest bank by assets could be worth more broken apart than kept left. >> jeff cox wrote about this on cnbc and joins us now. >> thanks bill. breaking up is hard to do as the

song goes and for jpmorgan maybe there's no other choice. no other institution faced more regulator pressure than jpm n. a much talked about note goldman sachs believes it's time to split up perhaps into four or maybe two pieces. goldman believes a split beneficial to shareholders, though it does note the difficulties involved taking apart such a massive institution. now, guys the biggest obstacle here for jpm is the fed. after pushing jpmorgan to continue growing through acquisitions in the crisis the fed now wants jpmorgan to hold more assets than any of its competitors and you can see what that's done to the share price. under performed the peers. unwinding is difficult. it's the height of irony that this same regulators that pushed jpmorgan together now want to break it apart. likely scenario could see a

basic split of jpmorgan and chase. that would bring to end a fascinating era. any event, the future is likely to be one of the street's most intriguing stories of the year. bill kelly? >> jeff, thank you very much. jeff cox. does splitting up jpmorgan make sense here? >> joining us is kayla following this story all along and mike mayo who made this kind of call a month ago in his upgrade report. mike this kind of blueprint put together to try to achieve economies of scale and earnings efficiencies and so forth and now i guess you're among those who feel that's no longer possible. why? >> well there's three reasons why a break-up of jpmorgan could be considered. number one, efficiency has stalled out over the last three years. two, there's more regulatory costs, capital requirements for jpmorgan than any other bank.

and three, they had their share of problems last few years in terms of 2012 the trading loss. 2013 extra costs due to complexity. and 2014 extra capital due to size. so it's some point no more excuses for jpmorgan. if they say they have more capital because they're big and they have more costs because they're complex, well okay. don't be as big and complex. or go ahead and show the value of scale. so the title of our upgrade note one month ago was prove it or lose it. or in other words, put up or shut up. show the benefits of scale to shareholders or restructure, break off. sell off pieces. >> okay. but kayla, do you think jamie dimon ever presides over a break-up of this bank? >> i think he could. that was the debate talking about who would take over a firm to succeed him and called too big to manage and there is an

idea that perhaps there's no single person within jpmorgan that could run a combined jpmorgan chase and perhaps there were some leaders who could run either an investment bank with a lot of institutional clients or very big retail and asset management type institution. what i found most interesting in the goldman sachs note is this idea that jpmorgan a victim of its own success and only needs to hold so much more capital than the peers because of the ability of gain market share relatively stronger bank in the crisis and also that it could be, you know, a host of standalone institutions because of the various business lines at the top of the class and compared to citigroup and i know mike knows very well you break apart the pieces an you don't really have a lot of value propositions. >> yeah. i mean mike what would the pieces be worth separate?

if that's the premise, they're undervalued, what are we talked about here? >> there's significant trapped value at jpmorgan. we estimate the sum of the parts at jpmorgan equal to $80 to $85 a share and compares to current stock prize of $55. what's interesting is if jpmorgan stock stays behind and under performed or the bank group the last three years, you could have the likes of carl icahn in terms of activist investors and elizabeth warren the regulators dancing a jig together celebrating the idea of maybe breaking up jpmorgan to make them more simple and to realize value for shareholders. having said that i think first in line would be citigroup and bank of america which have not performed well over the last decade opposed to jpmorgan -- >> first in line for a split-up you're saying mike? >> yeah. i think in the firing line f.

the bear is chasing -- >> fair enough. >> if a bear is chasing you, how fast do you have to run? faster than the lower prn and the slowest bank for the last decade is city group and bank of america. we think they're sum of the parts worth more than 50% and jpmorgan could be split up for example, if jamie dimon retires. >> we have to go. in a word are there other high-profile calls to make in regard of jpmorgan and the break-up? >> no. this is something that the bank will have to address in the late february investor day when it usually talks about the benefits of being a big bank the synergies of the businesses together and present the math for doing so. >> it will. thank you so much. mike and kayla pressure continues on the financials and the market with the dow heading lower. >> with about 17 minutes left, the dow down about 86 points here and heading lower.

another day and another drop in oil prices. jackie deangelis with the action of the nymex next. a programming note by the way, our friends at "squawk box" kicking off the 20th year with a brand new home. just think of how much more hair joe started when they started the show 20 years ago. starting tomorrow, check out the new digs starting at 6:00 a.m. eastern time right here on cnbc.

welcome back. another big day of big losses in the oil market and now the saudi prince is blaming weak global growth. >> jackie deangelis has it for us at the nymex. >> good afternoon to you guys. that's right. talk about pricing. we did settle under $50. $47.93. another 4% clip to the down side after the action of yesterday. you mentioned the comments of the saudi crown prince. certainly having an impact on this market. in terms of the price action that we have been seeing that commenting and nobody wants to cut production including saudi arabia but traders taking this as a sign they're digging their heels in as they have been.

they will not make a cut any time soon and that's what sent prices lower. but also a lot of traders saying sort of provides some context to the fact of a little bit of out of touch of when's happening, too, guys. >> thank you very much. see you later. dow's down 66 points. who knows where it's going to finish today? >> we'll find out if 12 minute's time. we have much more ahead. later, see how yields are falling. is that new lows for mortgage rates and maybe spur more home buying? that's coming up.

welcome back. dow down 72. just joining us check in see how the markets did today, very volatile day. a sharply higher opening with the dow up 80 some and then down 239 and we have since come back with that decline there of 79 points. s&p down 10. nasdaq down 41. joining us jeremy hill and bob pisani, as well. what a crazy day. >> yeah. i'm happy we have come back. restore a little bit of

confidence a bit. it was defensive led. consumers, health care staples and the market spoken very clearly. they're buying bonds. we're at 52-week high on many many big bond etfs including corporate bonds, long-term treasury bonds. even jenny mays are at 52-week highs. >> you put on a note late last year positivedepositing the possibility of long rates won't go up at the same time as the fed. down to 1.88 on the 10-year. why do you think this is possible? >> one of the things that we query all the time is if you're an investment manage we are a wide ranging mandate for the investments, why would you seek a risk free rate in europe and not in the u.s.? the relative value trade is a massive differential there. we find of often jest what's the

difference between the u.s. and ireland? ireland trades today a yield of 1.2. the u.s. is you know a little bit under 2%. that to me doesn't seem right. >> german bunds dropped 15% today. i got e-mails of stock traders saying did you see this? 0.44%. go to your point of comparative value. >> right. >> why wouldn't you come in? any wonder that the bond market is rallying here? >> yields reflecting a sentiment about our own economy or european economy? >> i think it's a little bit of both. it's a fairly complex trade. what you have is an anticipation of european ecb-led qe and may or may not happen. largely in our opinion dependent on what happens in greece as well. there's a huge risk around that. that's one of the larger risks for european yields. >> all right. let me get a break out of the way and come back we have the closing countdown and bring them back here and see how we do.

see if we finish we are a little bit lower here and see how the final minutes go as we head toward the close here on "closing bell."

i mean the charts are going to be -- tell the whole story here and what a day it was. a positive opening. looked like we might bounce from yesterday's huge selloff and then headed south.

treasuries going lower. at the low of the day, down 239 points on the industrial average. then a comeback late in the session and now heading lower den. let's show you the yield on the 10-year, another wild and woolly day here. down to lows we hadn't seen since last october. right around noon eastern time when we hit that 1.88 level and it was at the same time that the yield on the 30-year went below 2.5%. around $ 2.48%. crude oil, another extreme. we're back the lows we haven't seen since april of 2009. now at $47.79. decline of 4.5% in today's trading at the nymex. how much lower do you think oil goes and what does that -- is lower oil now bad for equities? we are trying to figure that out here. >> bad for equities potentially because it's batd for ees's bad for

other asset classes. how does it affect the high bond complex? does that have a contagion in the stocks? looking at oil, with e know there's a supply glut. really what we're looking is where is demand coming from? china? no. emerging markets? no. u.s.? we have our own oil now. that's the issue. that's i think what to say it and lightly is freaking people out. >> maybe change the conversation a little bit. on thursday hearing from retailers of november december retail sales. >> an impact there? >> well, it is hard to quantify. easy to lower oil company earnings estimates and hard to say we had a nice boost of traffic in the stores because the oil is lower. that's hard. but we'll get the comments. national retail federation not changed the view. 4% increase in holiday sales. i'm hopefully the news is good overall. >> i'm suspicious of a

transmission lag time between you get a giant quote/unquote tax cut of oil but, you know do you feel richer? if you're a middle class person are you spending retail dollars or are you repairing the dlans sheet in disarray? >> either way, it is good but we won't be as easy to quantify. >> butigger upside with the stocks of a producer price issue rather than consumer price issues off of oil. >> big story is very heavy volume. heading towards 4 billion shares. all shares. very heavy volume in the big stock etfs and bond etfs and 52-week highs on a bunch of them and the market spoken. they think yields stay low for a long time throughout the year. that's what the market is saying right now. >> just like jeremy hill same thing. >> i agree. >> thank you very much. bob, thanks as always. we are going out after a wild

tug of war between the bulls and the bears on the tuesday, the dow down about 120 points. with the s&p down 17. stay tuned now. the second hour of "the closing bell" with kelly evans. see you tomorrow. thank you bill. welcome to "the closing bell," everybody. i'm kelly evans. another tough session on wall street. a look there at one point in the last hour the dow down less than 50 points and might be positive. not the case on the close. the dow, another triple digit decline. off 133. i bring that up because if we had back to back decline of 1% on the index, it is more significant from a historical point of view. the s&p giving up 18 points. nasdaq, underperformer despite the stronger moves there from the likes of alibaba. talking about that. joining me now in the panel,

carol roth dan greenhouse and sharon epperson. also with us with more on the market is tim seymour. dan, how serious is the fact we've kicked the world off on a down note? >> the year really starts as bad as we have seen this year quite infrequently going back 30 40 years and i think you go out today at about 2,002, well off the highs, sentiment deteriorated and everybody's trying to figure out what's going on. i'm not jumping on the most bearish bandwagon and people talking about whether or not the u.s. on the verge of a recession and other sort of more dire -- >> u.s. recession? because of what happened with oil? >> look at the economic data reports released over the last couple of days. almost all of them missed. that's an increased attention -- >> not the session, surely. >> no no. i'll say you have people david

tyce on earlier and individuals in the market see the worst possible scenario. my only point is looking at the economic data reports released of late they're doing quite poorly in relation to expectations. >> carol eight out of eight data points weaker to start the year and perhaps no surprise to see the reaction. >> i'm not so certain this is in regard to usda that points. i think that this is in response to two greasy messes. oil and greece in europe kelly. that's what's driving this. market has not taken in and processed a lot of the data points that we have seen over the last several years. i'm not so certain with the fed still in play in a meaningful way, central banks doing the same, that the market is really that hyper focused on what's going on from a u.s. economic data point given the fact there's nothing that fell off a cliff. there's slower growth. sort of to be expected. so i'm looking at some different indicators. >> sharon, we are teeing up the time of year or should be going

through sort of portfolios and looking at the performance of a couple of years thinking maybe it's time to finally get into the stock market. bam. we are off 500 points in 2 days. >> that's what they should be doing. they should be looking at individual investors investing for the long term in the stock market. you're not worried about when's happening today, over the next week or month or even this year. you really want to be setting yourself up for the longer term and now the focus should be on the fact of a company with a 401(k) plan nut extra 500 bucks. >> oil savings perhaps. >> perhaps gasoline savings, exactly. >> it's discount season. going to the mall discount season in the stock market. why not? >> the problem is a lot of people may be looking that the and looking at the market fluctuationless or the dip that we're seeing here at the start of the year saying i maxed out last year and i did it earlier in the year and i had a bigger paycheck and hang on to the

money. that's the wrong attitude. if you want to be in it for the long term be in it. >> keep it in perspective. we are only modestly off the highs. >> exactly. >> still above the low from december. definitely above the low from november. we know that the equity market pulled back here but again, not a catastrophic fall in prices. >> looking back and looking at what the data shows in september and october how many people pulled out of their 401(k), pulled out of the stock funds only to have the market go back up? what a mistake that was as a long-term investor. >> tim, what about people might be looking at the bond market, for example, trying to figure out what it is telling us about where the economy is headed? >> a couple of things. differentials between the u.s. bond market and europe we have noted and significant spread contraction. when's it call mean? it just means when you're looking at relative value, no question u.s. rates need to go lower. looking at the price action in risk assets though i'm not

sure that we are in the same place. so last year lower yields actually meant the market went higher. this year, the market saying hey, lower prices excuse me higher prices lower yields have us concerned. back to oil, i don't think that prices is truth here. i think that things that investors should be watching it is very much about macro. watch dollar/yen. below 116. >> wait a second. you were saying that oil price here you don't think is real? >> i don't think price is truth with oil dipping into the 40s. you know you're in a place of supply glut a price war going on. you have oversold conditions. you have a number of energy funds that have been blown up effectively. it's been the violence of this move. other people talked about that. that's what you should be concerned about. this is not an orderly move and not a move that tells you u.s. is going in recession. that's absurd. the u.s. growing 3 plus percent in 2015 and europe by the second half of 2015 will be north of

2%. >> okay. okay. hold on to that thought, everybody. talk about one sector, transports, getting attention. selling off so far in 2015 after doubling the performance of the dow last year. should you buy this leading indicator on the dip? morgan brennan, is it still a reliable leading indicator if the transports that move crude are the reason it's suffering? >> you have to dig down and take a look at the different companies within the dow transports. 2015 a really rough ride for the dow transports posting the worst two-day selloff in nearly a year. two reasons for this. according to experts. first, investors selling 2014 stock winners to defer until next year and second continued slide in oil specifically what's slowing oil production could mean for the companies most exposed to it. for example, some of the railroad operators and maritime shippers. keep in mind cheaper fuel fuel is one of the biggest costs for all of the transports could be a tailwind and as falling gas

prices enable consumers to spend more on other things and analysts are telling me that the transports that specifically cater to consumers could be a buy and parcel carriers like u.p.s. and fed-ex are hiking rates as demand goes beyond capacity. only stock within the dow transports in the green of tesla. airlines delta, down 3% this year after 79% jump in 2014. but annual itselves consensus says a buy rating with 30% price upside over 12 months and similar for jetblue and united continental. trucking stocks, swift transportation and westerner enterprises, two smaller companies with largely domestic operations and more focused on retail and that's really kind of a story with the transports going forward. everybody i've spoken to analysts strategists expect the group to have another solid

group and consumer facing transport that is are really going to shine this year versus ones more industrial oriented like the railroads. >> thank you. stay with us with thoughts from the panel on this. carol? >> it is interesting to me it shines the light on the consumer story because we're hearing that the price of oil is going to be so great for consumers but when you look at fed, and u.p.s. and certainly i know the airlines none of that is getting passed on to the consumers and interesting -- >> in terms of rate savings? >> in terms of having savings out of it. fed-ex and u.p.s. raising rates in the face of cost of oil going down and so from from the consumer story, i'm just not certain how that plays out. >> a quick question and we have to get to earnings. do you like the transports as a leading inging gauge. >> as a whole, obviously, there's as morgan noted, the rails are having trouble with

the decline in commodity prices. airlines down three or four days now. truckers obviously deal with a different set of fundamentals. if you believe that the u.s. economy is relatively speaking fine then transports should be a sector to look at. >> let's send it out to courtney reagan with micron. >> reporting first quarter earnings of 97 cents a share, that's a nickel better than the street expecting. revenue though coming in a bit shy of $4.75 billion. the stock reacting after hours as you can see up about 1%. back to you. >> all right. thank you. micron we talk about earnings season, people focusing on the alcaos of the world. tim? >> we think they're probably a place to be largely somewhat defensive. i think if you looked across the space in 2014 you got a number of guys that outperformed and negativity that's priced into qualcomm and surprise on the upside. that's a top pick.

intel, defensive outperforming in the downward pc cycle and talk about this tonight on "fast money" because you have to find the pockets of stock picking and micron is support of the activist story, valuation story and probably also have a pretty good ride. >> all right. fair enough. that's all coming up on "fast money." thank you. thanks to the whole panel. catch him at 5:00 talking to the ceo of webmd live from las vegas. don't miss it. another big selloff on wall street today. investors starting to get gun shy after five years of strong ganls? if the market is going down does that make sense, especially if it's a supply issue and not a demand one? or is it? that's next. you're watching cnbc, first in business worldwide. first impressions are important. you've got to make every second count.

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welcome back. many still pegging the slide of stocks to the slide in crude. does that make sense? the common wisdom is it would if it's supply. with us now nicholas green and also chris faulkner. welcome to you both. nicolaus, what do you think this is all about?

>> well, from our side of things, we are genuinely concerned about the offshore environment, we were concerned at $110. the reality is new field developments offshore are -- we're struggling to make good economics at $110 a barrel. clearly $80 a barrel things are significantly worse. put very simply on the demand side, we are seeing we think a structural recession. fewer big greenfield projects go ahead. oil services after years of expansion are bigger than they've they've ever been. >> does that jive with what you're seeing? >> yeah. supply and demand. he mentioned good points. supply out of the united states. you have the opec and saudi situation. you have japan in recession. europe in a potential recession. china pullback. i think the reality is now there's a lot of oil in the market. you know we near a new price

era of oil. i think it lasts sub-50? no. it's a range balance situation between now and q1. we can stop producing on a dime and can't say everyone stop. it takes time. what we're doing is planning months in the past so i think supply will come down as drilling slow downs into q2 and oil will go back to what it was any time season. >> i'll give you a sub 50 forecast. brian reynolds who i love saying it could be 20 bucks for a decade. what do you do then? >> i think that at 45 now you're going to have producers who are going to get gobbled up by bigger producers, not making it in the storm. $20 oil, i don't know many models that show that sustainable. >> i don't know many models that saw this coming. this is -- this conversation is driving me crazy. it doesn't feel like this is about what's really going on out there. why are we looking at this? clearly the dynamic is mott

appreciated by models or anybody in the market. >> i think the tipping point occurred when we reached 9 million barrels and saudi didn't cut. i think that there's just too much oil in the market. demand is flat. countries and concern and a number of things in the perfect storm basket driven the price down. i don't think it should have come down this fast based on fundamentals of 1.5 million barrel oversupply in the market and you have traders and spectaculars driving it down. >> turning to the panel here. >> nicholas it's dan greenhaus. chris just brought up how japan is in a recession and europe and other observations. what areoccurred in the middle of june that we didn't know? did we discover a supply glut? what happened then to lead to this accelerated decline? >> it's a good question. there isn't a very clear answer to that. the reality is even by september

time the market wasn't fully clear to see the slide in the oil price. there were hopes of a decision in november to reverse it. clearly that didn't happen. but no. you're absolutely right. our thesis in june last year was talking a lot about capital discipline, the effect this has on the oil service sector and in fact how much of a reduction in demand we expected to see anyway at those kind of oil prices so the fact that the supply has continued, the fact that rig count hasn't dropped over the second half of '14 and the fact it took so long to come down means i think it did catch a lot of people by surprise. you're right. >> nicholas it's carol roth. if this continues for some length of time looking at particularly the u.s. economy and market a lot of people have said this would be very good for the u.s. economy but the question is is it good for the u.s. market? it seems to me in terms of earnings per share that energy sector financial services

sectors that could be hit very hard not made up by the potential increase of consumption from the consumer. >> yeah. that's pretty interesting. there's a lot of debate adds you know. is low oil price good for the economy or snot what we can comment on with some certainty for the sectors of the oil service economy which are really focused on offshore talking about the offshore drillers seismic players, multi-service providers and the construction guys in particular, you know all of these names are going to have substantially less work than they were expecting. in our -- we forecast new work by looking at the number of new projects offshore to get the go ahead in the given year and forecasting for 2015 half of 2014 numbers so 20 projects globally we think to get the go ahead. that is low when you think the last ten years we have had an average of about 75 a year and that's going to continue also out into '16 and '17, low numbers, about 50% of -- about a

50% reduction in demand in the offshore new projects space. >> nicolaus it's sharon epperson with cnbc. covering the oil market for several years as i saw the price of oil go up to $150 a barrel, wasn't necessarily the discussion about supply or demand. it was a lot about speculation. so i'm wondering on this big slide that we have seen in the oil price, how much speculators have played a role in the rapid decline since june of course you say that there was no one event in june. could the events be speculative activity in the markets? >> you're dead right. i think we have to allow for that now. you know what kind of amounts? 20% of the slide. you know it's not something which is easy to quantify and clearly the level of the oil prices dropped to isn't supported by the fundamentals of supply and demand. >> you think that's the case nicholas? >> well, i think clearly supply and demand is key. but it probably doesn't explain

why it's fallen as far as it's fallen. whether you put that down to you know political drivers, the role of opec may or may not be trying to do in closing more marginal producers whether speculator speculators, there's more going on than pure fundamentals. >> that's for sure. >> may have accounted for a good portion of the fall and not all of it. we are expecting that to correct upward. >> i'm sorry. i didn't know -- just following the line of thought there. chris, a quick last question to you before we go. i'm curious, ceo of your firm, what you do in light of all of this. try to eat or be eaten? talking about layoffs here? >> no. i think it's two things. one, there's acquisition opportunity. we are in a buyer's market. cash is king. number two, though drill your best stuff. drill your best acre and in the best sweet spots. no explorer story stuff and focus on a micro level on the

best acreage fields. >> thank you very much. appreciate it. >> thank you. 2014 supposed to be the year of wearable technology but they never really took off with consumers. up next, head to the consumer electronics show for a look at the wearables that people might wear this year. josh altman from million dollar listing joining us later for the outlook for housing amid this big move in yield. stay tuned. 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

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welcome back. for a few years it seems wearable tech is dressed up with no place to go because people didn't like anything enough to wear it regularly. is that changing? katie thompson is out in las vegas. katie, with a look at wearable tech that consumers and yourself may actually want to wear? >> reporter: yeah. absolutely. so the big thing with wearable devices is no one wants to wear them. so what do you do? you make them look like device this is people will wear. one of the one that is we have here is this activity pop. you can see it just looks like a watch. you can change the bands. it's pretty affordable. about $150. so this is definitely something people most likely prone to wear. >> well listen. it's a step in the right direction, i guess. contain your enthusiasm. good to see you this afternoon. appreciate it.

katie thompson. >> yeah. no. >> yeah. go ahead. >> one more device the show you. >> please do. yeah. >> this one is misfit shine and it's actually an activity tracker, as well. but you can wear it in a necklace or a bracelet. you don't have to -- doesn't look like a big bulky watch and an issue women would be more inclined to wear. >> it's the misfit though. i like it. it's like -- >> yeah. this is the misfit. >> go ahead. >> this is the misfit swarovski and different than their usual device and more fancy and more geared toward women. >> no stunning. in fact. thank you. appreciate it. our they kayety thompson. >> no problem. >> my next guest has a wearable for your head. joining us now is hans vestberg. good to have you with us. what should we be looking at

here? >> i think that what we're seeing is of course the world of connected devices. the networks are built out. we see a lot of potential of bringing the connected devices together. here we see all gadgets having some type of connectivity. i think that this is really where we see a big change in the industry where industries are now coming together and using these devices for creating more uses and new ways of working. >> tell me about this connected device for the head hans. >> i think that it comes to connected devices, we have gone from started connecting things and now coming into systems and you think about where connected cars and they've been one of the most important things here at the consumer electronics show and now connected together and you start to doing things with them. you can manage traffic and not only that we saw, for example, in the ericsson booth, a helmet

and a car and avoid security. so something you can build systems all these connected devices for the better of the society and, of course, this's the whole idea to bring a lot of efficiency into the society with all these devices. some wearable some maybe more for luxury or fun and many of them bring you lot of efficiency. >> hans, are you ready to take on more product liability for driverless cars? tom wilson ceo of allstate indicated that's frankly where it's probably all going. >> i think that if we look at -- we are building the majority of the mobile networks in the world which, of course will be the connectivity of these ones these devices. what we see ourself doing much more and more is really to understand the type of applications and devices and how to use the network. i mean it is a huge difference of having a connected car compared to consumer doing youtube. we have always done is sort of guarantee until that and that

will continue and evolution of the technologies is just enormous and how many people get connected at the same time. >> and also some big news trying to improve speeds on the wireless networks as well. we thank you for that and joining us this afternoon. hans verseberg from vegas, thank you so much. we have some breaking news now on jcpenney. >> that's right. a bit of a surprise. jcpenney is saying that the holiday same store sales for november and december period up 3.7%. that's same store sales for november and december saying for the full fourth quarter which is not yet over they expect same store sales to be at the upper end of the previous range of an increase of 2% to 4%. shares are rising for jcpenney. up almost 10% after hours on this news. back to you. >> all right. thank you very much. a huge move there as we start to sift through what happened this holiday season. perhaps one winner that is

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a big drop in interest rates and will it be enough to spur home buying? with us is josh alman. welcome back. >> good to be back. >> does your jaw drop seeing the mortgage levels? >> i love it. cheap money makes me a happy man. >> i thought it wasn't getting a bid from the low rates. >> actually it is. and what we are seeing coast to coast right now is there's a great article out in "the new york times" today talking about how confidence in the market a lot of people who are big-time spending luxury market buying type of stuff. it really just puts confidence back in and people are happy and buying. >> is it about the rates? people buying at your levels in new york and l.a. aren't they

using cash and overseas? do mortgage rate vs a difference? >> of course. those are people -- that's not the norm. it's about borrowing and banks approving the loans and we are seeing regular sales of you know median price, a $740,000? >> all of l.a. $500,000. >> there you go. >> looking at real estate out there? >> no. i get paid the know things. >> you see it. everything is moving. fourth quarter is super successful. now the first quarter of 2015 it's a question of is there going to be some type of adjustment? >> right. >> where are people buying? we are looking at the big drop we have seen in the oil price and a lot of folks are saying's the time to actually look into building a home. building a home in a rural area because you don't have to pay the transportation costs as high to get there. are we seeing more building more new homes built and what people are interested in now? >> what's going on in truesdale? >> great place. everybody wants to be in the business now of developing.

everyone. so that's what we are seeing a lot. schoolteachers investing in real estate and building houses because they feel like everybody else is making money out there so -- >> that's always a good sign. >> trying to think of the implications of that one. >> yeah. >> but what about the millennials? are you having any millennials? everything i see, every article is that the millennials want to rent, they don't want to buy an maybe a trip around the world. they don't want to be saddled with the baggage of a mortgage and maybe live with mom and dad forever. >> right. so we're seeing the rental market still pretty strong only because the prices are so high median prices and where you think the rental market is going down, listen still a great investment. everybody's renting. a lot of my billionaire clients are buying units. >> what's the hot market in l.a.? >> bel air. truesdale. >> there is something more going on. >> there was a sale for $70

million in hill crest and phenomenal. >> wow. >> a billionaire gamer bought it. $3,000 a foot. >> i did see that. does it translate from the midwest where i come from? you fancy people in new york and l.a. that's fine. >> you fancy people. from chicago. >> i'm the heart of the midwest and people still struggling on a day-to-day basis. where do you think that goes in 2015? >> we'll just have to see. i'm in l.a. and i deal with some of new york and not the midwest. >> i love it. i don't have to worry about it. right? we know what you're saying. >> nobody cares about main street. that's the problem. >> josh i don't know if you look at this, people not investing in homes want to get into real estate and think maybe for the long term knob a reit. what kind of assets to be looking at in terms of those? do you look at that at snaul. >> we don't. we deal with foreign money. especially the russians.

>> full cash. high end. >> are you seeing a drop in demand? especially from the russian buyers, we have heard in a lot of markets epsilon don, for example, that that's really dropped off a cliff. >> i have not seen that personally in the high-end market i deal with in beverly hills. still hot market. inventory has gone up a little bit now so we'll see what happens. >> remember, the last few years have seen the influx of russian, chinese and saudi arabian buyers to get away from what's happened and preparatory of what's taking place. >> people talking about the house of a safe deposit box of the wealthy and not owning the property. how does that affect the market? >> somebody said that when you're there investing the money it is not an on their return. it is just so they know they have the money there and safe and that's what it is. what you said. >> how many people live in the homes you're selling? do they actually live there? >> i live in it. >> exactly. someone wins. you win at least. >> you think she's joking. there's a very big article a

month, two months ago talking about making the numbers up because i don't remember. something like 40% of the pardon mes between 42nd and 69th street between lex and park avenue empty because they were foreign owned. >> dynamic in london with entire streets with huge sales prices for the properties but then no cares in the parking spots. >> who wants neighbors anyways? >> people in general. >> it's an issue of property taxes, too. basically building are ghost cities in disguise hardly the way for prosperity generally. >> true. >> blocking people out of the market. >> yeah. >> josh thank you. >> 1 million apartments are rent control controlled. >> do you want to make a prediction? >> still seeing a lot of action. i think it's going to correct itself in the first quarter. >> in the first quarter? >> right after the first quarter. >> and then going to be better? >> no no. i think it's going to correct itself after the first quarter. >> all right. we'll be watching. josh, thank you so much. >> thank you. >> josh altman. most americans enjoying the

low prices at the gas pump. could it spur a credit crisis? we'll talk about that next. and for those of you who think the french sit at cafes all day, guess what. france is number one nation in europe for start-up companies. we'll see if it makes the hot list coming up.

welcome back. as you can see there, oil dropped and weighing on equity markets today and not the only ones affected. drop in oil hitting energy companies, high-yield bonds and if oil and gas prices stay low throughout 2015 could it cause a credit crisis? joining me now with his name jim keenan. welcome. great to have you with us. start with where you see the risks if oil prices stay where they currently are today. >> yeah. i don't think it's isolated to the high-yield market. you have seen a big move in high-yield energy prices and over the last couple of years the shale boon and the energy recovery in the u.s. and about 15% to 16% of the high yield market 4% 5% of the market. you have seen the high yield bonds significantly decline. that being said you probably won't see a lot of defaults in 10 2015 but 2016. but it's not just the high yield

market. oil's going to affect the global markets and russia and venezuela and nigeria and a pretty big impact on the global market. >> what kind of impact on the u.s. though? how many more declines like this i'm thinking again about housing last time around does it take to understand where some of the risks are in the financial system? how much is different this time versus what we saw in 2008? >> well i don't think we know. you still are the significant very rapid decline in oil and haven't seen all the impacts. obviously, there's still a supply demand imbalance. you have cap x cuts and production is increasing. you have a lot of supply coming on to the market. that being said you still see a global slowdown now. china, brazil russia. economies are slowing down but the u.s. economy is in pretty good shape right now so the volatility to see over the next year probably will probably escalate and we're not sure what

to see yet but vol is back and that is going to create opportunities for people. >> take a quick listen. we had elevation partners roger mcnami saying yesterday the differences of as he sees it the drop in oil prices and drop in housing prices. take a quick listen. >> i don't expect them to be huge because you have not seen the kind of synthetic products created around energy you saw around mortgages. i don't see baskets of synthetic instruments being sold to gullible pension managers around the world. i think everybody, you know the oil and gas market is not a place where that's been going on. and so i just don't see that risk right now. >> is he right about that jim? >> yeah. i think some of the difference if you went back to 2007 2008 we saw a lot of leverage at the household sector a lot of leverage at the financial system and the asset liability mismatch tends to be pretty fragile. the way households or the way the banking system finance

themselves and getting a pretty big decline you have that liability mismatch and you see -- >> in other words, takes a small decline in price to wipe out the capital you might have. >> that being said we still have a lot of leverage in the overall global system and you have seen a major shift of that going from the household, the banking system and corporates on to central bank balance sheets or fiscal balance sheets an we'll see impact and inflationary data and the lack you're seeing the impact. to say it's different in 2008 or 2007 yes, absolutely it is different. the system reduced significant amount of risk that we saw at that time frame. but oil impact will have an impact or the slowdown of china, you know is going to have an impact of the overall economy and so from an opportunistic standpoint we think the market is fine. the u.s. economy is fine. there are more risk in the system. and so you have to be a bit more balanced with the portfolios and

high yield probably produces 4% 5% returns. s&p is likely to produce high single digits and risk to that number. >> it is an interesting point, as well, because a lot of what you have talked about slowing economy and the global concerns are all factors pretty negative for high yield, junk or the kinds of lesser quality names people might be holding so how much could we see spreads, for example, widen between some of those names beyond what we have already seen and the benchmark treasury yields because they keep sinking? >> yeah. a slow economy is still fine. all right? it's a recession you start to see risk to operational earnings and when you look at the high yield market today, it's 600 over 7.5% yield and a pretty big discount to 1.5% 5-year or 10% 10-year. the market is pricing in bigger discount than default. over five years, away from

what's happening in the market most of the high yield market and most of the corporate sector in the u.s. continued to derisk and dpundfundamentals of an economy is pretty good for credit markets and maybe morris i can for equity markets. >> that's interesting. people should take note. going back to the issue of the pricing versus defaults you don't think we might have a real increase, a surge in defaults a default wave as some are calling it? >> i think it is really hard to see a significant spurn to defaults in 2015. i'll give you a couple reasons. one, over the last five years the economy has and most of the corporates have derisked in the economy and only last 18 months to see risk come back into the system at the corporate level. two, is part of that derisking is -- was extendeding out the liabilities and pushed out the maturities, you know beyond three years and so you really need a recession or a corporate

operating earnings decline to see a risk. >> for energy it's a decline for the quarter. >> no doubt. most high yield companies with the leverage putting on in the high yield energy sector they hedge out a lot of the production for 2015. or over the next 12 to 18 months and between 50% and 70% so it's hard to see a company's with liquidity really defaulting over '15 and that's why you see production cuts and oil, supply and demand balance likely come back in 2016 and then defaults in '16. >> all rightment bottom line is credit boom keeps going for then? >> i would say it's more balanced. we don't view it as an opportunity. but looking at the market most of the world's fixed income assets trading less than 3%. and so, an area to get 4% to 6% there's a place for high yield in a balanced portfolio. it's not an opportunity but it's a place thinking about a balance

between equities and rate strategies. >> we have to get you back at 2016 looms to talk about how that's evolving. thank you so much for being here. >> thank you. >> really appreciate. up next, what's burning up cnbc.com with the hot list and tomorrow talking to the ceo of discovery communications and set your alarms for 6:00 a.m. for "squawk box" in the new stud youio in the heart of manhattan.

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the good times aren't rolling anymore? don't believe me that's topping the hot list. what? >> oh yes. >> what's going on? >> it certainly is kelly. bill gross, the bond king now janice but people still key into what he says and he came out with a note saying the good times are over. and so people are piling into our write-up of that note. he's seeing low global growth and thinks a lot of asset classes might start posting red numbers after awhile so that's hot on the hot list. following straight from that we have an analysis of what other commodities, like oil, are taking a dive. you've got sugar, plywood, soybean oil, all this is creating fears about deflation wave hitting global growth on

top of the slowdown that we're seeing, so john schoen put that together for us. our readers are eating that one up as well. because we have all this panic and worry going on we have another piece about correction protection, what kind of things people can pile into to guard themselves against a downturn in the markets that continues on, things like bond etfs, solid stocks that have dividends on a regular basis, some option plays, and, yes, everybody's favorite safe haven, gold. there you go, kelly. that's what's boiling for us today. >> gold has been surprisingly and perhaps eerily stable reminds you of oil before the collapse we just witnessed. that's all i'll say about that one. thank you, allen. good to see you at headquarters. here's another hot story today and something you don't see often, it's a check for $975 million. courtney reagan has the story. do you have the check? >> we have a copy of the check, of course we don't talk about divorce settlements that often, but this you can't ignore.

harold hamm delivered this check for $974.8 million to his ex-wife's legal team. the full cash value of what he owes based on a judge's november ruling, but sue is rejecting that offer and that check. hamm's fortune is expected to be about $14 billion. saying the nearly $1 billion is not enough. hamm appealed it, too, saying it was too high. this is an action he tried to take to settle it, i don't think it's going to work. back to you. >> courtney this is unbelievable to me. this check came from the lawyer how are we sure it's legitimate? >> this check came from the lawyer, sent to us as part of the filing. this is a check he wrote, he signed, she handed it back, said no thanks. >> i don't know what you think, the facts banks in this country can clear almost a billion check, personal check. >> personal check. >> it was just bonus season. i will say -- >> why would you write a check?

why wouldn't you do it by wire transfer? >> that's more expensive, wire transfer. >> that costs $25. >> why would you write the check when you're waiting to hear the appeal on the fact you're contending it was too high? >> meant to make a point. way to make a point, write down $970-something million. >> i did not know you could write underneath the line. >> if you run out of space. >> see it's not -- he ran out of space. i didn't know that was a thing. >> if you run out of space there, you can go to the back of the check. >> i write a squiggly line we're not talking about billion dollar amounts here. the bank probably said whatever. next, final few minutes for the stock market, we'll see what it means for tomorrow's trading session with the panel. we're back in two.

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welcome back. ten minutes before the close, the dow is off by about 40 points. by the time the bell rang we were off 130. another pretty weak finish. is it a reason to worry about tomorrow, dan? >> listen to some degree not to use a gambling analogy, which i despise, but every day is a spin

of the roulette wheel, so to speak. clearly, the market feels heavy and moments the market fills up more rapidly than others. we know the give in wait for it to stabilize, but i think a lot of people are turning their eyes to friday. the economic data reports have missed and friday is another miss bears are going to come out. >> what's the forecast? >> interesting thing is one of the things we didn't talk a lot about was the soap opera that is europe, and is greece staying or going and what's that mean will it really have some of the effects some of the people think that it might, so i think that's something that's going to play out over the next couple of weeks here. >> how strong does the jobs report friday need to be to quiet those concerns? >> from my perspective, i'm contrarian to dan, i don't think that this market really pays that much attention to what the jobs report is. if it's something that's a wild fling, a wild miss then perhaps it's going to have some effect but as long as it's around where there's the expectations are, i don't know that it's really going to have much of an impact.

>> i wonder, sharon, if we should drop everything and buy a house, or try to anyway. >> and not in new york or l.a. where the prices are so high. need to go in the midwest. i think people need to think about a long-term strategy, and i think what this is showing us is you never know what is going to happen. think of what happened in october and september when we had those days with big drops and what the gut reaction was of some investors, and then what happened after that so you have this whole year to go through, and if you're thinking longer term, you need to be invested keep in mind that you can contribute $18,000 to your 401(k) this year $24,000 if you're 50 or older. reach those maximums and try to continue to contribute to other long-term vehicles like an ira. if you can't buy a house. >> if you're a small business owner, you can contribute up to six figures, so make sure you're talking to somebody about a defined benefit plan or contribution, really serious money for small business owners. >> now we know you can write checks for nine figures. thank you, everybody, for being here. great to see you this afternoon.

"fast money" coming up with melissa lee. what's on tap? >> two oil stocks you can buy right now, even with oil where it is now. also got the ceo of web md in a cnbc exclusive. >> great stuff coming up. straight over to you guys. nasdaq studio overlooking new york city's times square. traders tonight, another red day for stocks s&p closing down nearly 1% today as oil got whacked, closing below $48 a barrel at one point it did look like we could get a turn around adds we saw impressive reversals in apple, tesla also which closed up half a percent and alibaba closing up more than 2%. so, second down day in a row, first full trading week of the year, tim, what did you make of today? >> five straight days for the s&p, you're in a place the market s