joining us this morning, michael san tolly, yahoo! financial senior commerce, jon steinberg, cnbc contributor. jon fortt and kayla tausche on a day where the markets are in the lead. the volatile sell-off at the get-go after sales disappointed for december. pretty modest quarter out of jpmorgan. meantime tesla and other things at work. but in general we've bounced around the 2,000 level on the s&p and oil we're watching closely which is moderately in the green right now. mike, people either don't want it to believe the retail sales number and if they do they say it points to we have a problem. >> skittish market to begin with. copper prices collapsing overnight. a lot of these big asset markets moving in ways that seem to keep people on their heels.

i think the retail story more important than normally the kind of typical monthly retail sales number because coming into the year the new story had to be the u.s. consumer was the strongest element in all the world's economies. if that gets compromised at all, i'm not saying it is undercut right now, but that's why it matters today. >> do you think we are not seeing the savings on lower gas prices trickle through to retail sales yet or do you think they're just not putting the money back into retail? >> i have to believe it's yet or it's a measurement of fact toward there's something else going on in there you have to have a couple more months worth of data and from the companies themselves. the chain store numbers could supersede this if, in fact, they're any better. >> your end of the year column you said there's a near universal belief treasure bonds will lose favor. everybody believes interest rates will be risen sooner than expected. why dot yields keep dropping? >> you have so many stories and mostly it's explanatory. basically saying we're anchored

by this deflationary fear that's driving global yields lower. obviously demand for longer dated treasuries is not going away. i think what you see also is this idea, nobody is talking about how by the way deficit is smaller than expected. supply demand explains some of this and the latest run of data is having people say maybe we don't get federal funds rate higher this year which is kind of a crazy thing. if i told you a month ago, people would have thought you were crazy. >> earnings season getting kicked off, tiffany had negative things to say, sandisk, yesterday, kb home, anecdotally not like we're getting off to a good start. >> you have a little bit of muscle memory of last year where january was polar vortex but also again, we were were supposed to get an acceleration in the domestic economy and didn't pan out immediately. doesn't mean the year is sunk. the story gets a little challenged. >> people were hoping that we would get bank earnings or at least the first of bank earnings today and they would be signs not only of loan growth but uptick in spending elsewhere,

maybe paying off bills. while some of that did occur, the strength wasn't as braodbased as a lot expected. you called jpmorgan's quarter modest. i think that's putting it nicely. >> trying to be charitable into given the line items you had. the focused that astounded me, how much analysts care about this idea that the capital constraints are going to become so invasive for a company like that it would need to break up. there was one very pointed question i would like to play jamie dimon's response to, we get you can operate as a company at higher capital levels but do you believe it's the government's ultimate intention with this regulation to make you a smaller company. here's what jamie had to say. >> i don't think we should be making decisions based upon views of people don't really know. if the regulators at the end of the day want jpmorgan to be split up that's what will have to happen. we can't fight the federal reserve if that's their intent or maybe their intent is what it is, carry more capital and

modify your business model over time to carry capital. that one we think we can earn a superior return still versus the -- other banks and carry the higher capital and modify our business model over time without taking drastic action. >> he did say he believes that government or regulators rather are misinterpreting size as risk. he said, mike, if in ten years they're allowed to get bigger he would want their market cap to be $500 billion, not $230 billion. do you think the government's happened here is too strong? >> i don't know if it's too strong but the government does still leave as choice with companies like jpmorgan. you don't have to break up. you can be a boring and less profitable company holding more capital. what wall street is going to have to decide is, is the penalty on jpmorgan's noncapital business too high now. the asset management business is huge. it would be worth a lot as stand-alone company. it doesn't need to carry a lot of capital. if you need to at the company level does it mean you're mob

obscuring the value of the company worth more. >> meantime tesla shares falling sharply. elon musk was in detroit last night at an auto industry conference. he say they may not be profitable until 020 and spoke about china sales. take a listen. >> china was weaker than expected. mostly because of misperception and charging which we are correcting an we are seeing an uptick in our sales in china. just weren't all that significant in the fourth quarter. i think the china situation is temporary and will get corrected this year. >> stock has been all over the map for the past couple weeks and months down to 190. look, he's the first to say that the stock was a little expensive not long ago spoo he actually was the first, literally to imply that. one of my questions heading into 2015 is what happenses to these high flyers as they run into ral

ity. when looking at tesla and find out profitability might not come in 2017, 2018 as the optimists had thought but in 2020 and there's some education to happen in the china market on the infrastructure before the consumer is going to be willing to buy, in a year like this where we've got so much uncertainty going in, what happens to a high flyer like a tesla, like a gopro, which we're going to get to. the zillows of the world. netflix. what happens when those companies start running into these realities. >> here's my take on tesla. ron was on "squawk box," a notable long-term investor, two stocks he's going long on, man chested united and tesla. elon musk almost landed a rocket face down having shot it into the air and almost was able to do it. this guy is a genius. he says he's going to sell millions of teslas by 2025, selling 35,000 now. i don't know about price, not commenting on valuation. this is going to be the apple of cars. >> john's point, is there a first strike disadvantage,

right? is tesla to gm as gopro is to apple? >> no. i think the bolt and gm is going to be android and they're going to be apple. if you look at the software and the way the car operates no doubt this is going to be the premium product. >> do you think elon musk is the ultimate expectation manager. there's a huge onus on this company to deliver and seems it's always him that's keeping the stock and the valuation in check. >> to a large degree. i mean, i do think that people are betting on him when they bet on the company and also are betting on i think it's correct that people who want as tesla if there's a market opportunity it's not the same as the market opportunity for electric cars. not about fuels costs. it's a different product. i think the issue here is everybody on wall street last year was focusing on half a million units in 2020. and you can back a valuation to today and it could be reasonable. i think the real big picture fear, is this guy using cars as a trojans horse to recreate the grid with batteries. the jeff begun begun lapp story. >> do we want to give him the

capital to change the world or create a great car company. big picture concern something out there. >> as he would admit as he did last night that they've been consistently late in rolling out some of the new products. does brings us to gopro and that is rebounding this morning. the stock as you know closed down over 12% yesterday. the heart of that move, apple granteds this patent for a sports camera that can be controlled as a phone or a watch. steinberg's been all over this morning. you even have a picture. >> i put it on twitter. not that apple was granted a patent. it's that apple acquired a trove of patents from kodak. if you see a picture on this thing, i tweetsds it out, looks like something out of the 1980s. like this kodak thing, if that's what they're afraid of, the poll lor road guy we had with the polaroid thing, that's scarier than the vintage kodak device. >> i will say that apple is not going to come out with an action camera and the reason why is, whenever i talk to apple about categories that they go into, they like to go into categories wheres there's a lot of mass market appeal and no good

companies and good products. gopro has a good product and the action camera market eating everybody else's lunch. it wouldn't be an apple-like move to go into this now. at the same time i think you can't confuse causes with cat lists. yes, it might not be a good cause for the stock it go down on something like this, but is it a catalyst. think the stock was up at 90 a few months ago. it started off down near 30. so now, it's been near 60. is that the right level? i don't know. make your argument. maybe it should go to 50. maybe 40. you have to decide. >> secondaries, the hopes of a consumer drone later in the year, right? a lot of cross currents on this one. >> i don't think that, you know, management has necessarily impressed for its, you know, interests in running a company for wall street's needs and attention span. doesn't mean it's sunk. i think one trick ponies have to prove they have a second trick and that's the challenge. >> two weeks we will get the holiday quarter earnings out of gopro and this is a really

important quarter for a company like this that's relying really on the consumer. so i think not only are we going to hear how well they did, which is important, but how much they're going to have to spend on software and an area they outlined as being important for the future of theirs business, how much they will spend and how will investors feel on that based on how they project guidance for the next quarter. >> all right then. good seeing you. mike san tolly. when we come back analyst calls moving two names this morning. stiefel upgrading netflix, talking about valuation and strong content on the heels woody allen will make the series for amazon. verizon downgraded at evercorp, increased competition, margin pressure, higher rates of return as well. this netflix call is interesting after the amazon upgrade out of citi yesterday. >> interesting thing about netflix they are likely to have according to the note a 20% decline in ads in domestic for the coming quarter which is amazing at this point now we're seeing so many people starting to go over the top, broadband

speeds getting faster, seeing declining growth. with that said on valuation it trades at 27.5 times 2015 ebitda. that's basically double hbo. but it has two to three times the revenue growth of hbo so when you look at it on a revenue basis, three times 2015 earnings as opposed to hbo at 5.2 times. you can get your head around the valuation if you try to. >> this sort of reminds me, though, of all of the analysts that before a company's investor days say i don't feel comfortable being short or underestimating my price target going into the investor day. people don't want to be short netflix going into "house of cards" that's coming out in a month and that's a huge boon for the stock. >> at least sentiment wise, yeah. if you looked at the chart i actually kind of like the idea behind the upgrade because it kind of revisited this level, did the round trip from about a year ago and looks like maybe this is an area where you might find buyers. you can get your arms around the valuation but i do think the problem from wall street's perspective on netflix is, did the window of netflix's

specialness close shut? i mean basically is everybody else able to do something similar enough and all of a sudden it's no longer this unique unicorn of a company that we, therefore, have to put a higher -- >> you have to be careful about in netflix if you read this note on the upgrade, it's saying domestic will not be that strong but look at the international possibilities. look what everybody else on the marks is doing. counting on strong domestic growth, north america for companies, and saying macro wise international isn't doing so well. what if that really blows up on netflix? it could happen. they could say look at the economy, the other places, france, germany. >> not to mention that the rights issues are not the same in europe by a long shot, right? >> even if they get that worked out, macro issues in france and germany, switzerland, areas where they're looking to expand that could slow them down and what happens to your thesis. >> i think that's a good point. i was thinking about it this morning which is hbo is now basically going to become netflix. amazon won their first award. given netflix is seeing this declining growth right now, it

seems like that shouldn't be happening. it's happening this early that is a little scary. >> yeah. and they talk about -- the upgrade talks about the strong content cycle this coming year. i don't know how much that translates into subscriber growth. did we talk about the sort of movies that have been in the theater, hbo is getting? we don't talk about that. i don't know if it drives consumer interest that directly. >> are you going to stick around some. >> sure. >> when we come back, facebook for the work place rolling out with linkedin planning its own new products. a check on those stocks in a moment. plus walt mossberg reviews a tool to make your iphone reception better. walt on the iphone 6 and we're keeping our eye on the markets back close to session lows, dow down 227, s&p barely hanging on to a two handle. "squawk alley" is back in a couple minutes. you can find a new frontier. there's nothing stopping you, and a lot helping you. technology that's with you always. this is our promise.

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welcome back to "squawk alley." check out shares of american axle manufacturing bucking today's downward trend for stocks. stock is moving higher as it targets an 11% increase in its annual sales this year, 2015, as demand continues to remain strong about 70% of its new business orders in 2017 is for customers other than its former parent general motors than the stock is currently. up by about 4% in trading. the stock up 15% over the course of the past year. back over to you. >> a rare up move on a tough day. thanks for that update. facebook's rolling out its new product facebook at work this morning. cnbc's julia boorstin joins us

with the latest on social media in the work place. facebook at work sounds like an oxymoron. >> well, it does sound like an oxymoron but facebook is trying to change its reputation with a test it's working on with a couple companies starting today. facebook at work is an enterprise collaboration tool. the app is totally separate, it's a totally separate experience from facebook designed to give employees the ability to connect and collaborate using facebook tools like news feed groups messages and events. but only with their co-workers. and sources tell me that the company is strongly considering a subscription model that's instead of the advertising model, of its core facebook business. facebook shares flat today. down just a hair. the new focus on connecting co-workers will put facebook into the direct competition with microsoft's yammer, with sales force's chatter program and giant software and start-ups including slack. facebook's new offering isn't much direct competition with

linkedin on professionals connecting outside their companies but linkedin is working on new tools. sources tell us one launch in two weeks will help co-workers share kax information with each other. the other launching by quarter end, aims to make it easier for employees to share content with each other and to their linkedin network. facebook has a reputation as a procrastination tool now we have to see if it can become one for productivity. >> talk about going after enter price. thank you so much. jon steinberg you think we don't talk about linkedin in enough. >> it's such a dominant force. the stock has been relatively flat for a year or back well below the $250 level but with that said it has become such a definitive source for people to look for sales prospects, communicate with co-workers. i think it's smart they're going into a space that would allow for more collaboration like cloud storage made it easier to share documents, a huge pain point in the organization is messaging, keeping track of phone numbers, google contacts is a terrible contact organizer,

something left to be solved that can create engagement. >> investors need to take note here. this is companies like facebook, like linkedin, investing in enterprise software because they think there's money to be made there in the relatively near term. so maybe a company like jive, you know, is in play, i don't know. microsoft yammer can take advantage of this and draw some attention to what they're already working on. they don't have the kind of brand confusion. should you be thinking about what the opportunities are in enterprise software right now if you're an investor because these players certainly are. >> if there's the opportunities then who is at risk? is it the microsofts and oracles. why do they see this as being a ripe area? >> it's a fascinating how different this conversation is than around the time of the ipo. i was talking to bankers and they said we love facebook but we can't access it at work and we're working on the ipo. we have to bring in our ipads or phones to access facebook. are we beyond the idea that facebook is a productivity killer? >> or beyond the idea that somehow social networks are

different thing that stand apart from general communications. i think that's probably where -- >> i think when you look at the success slack has had, talk to every technology start-up company using slack right now, and you look at whatsapp has done in the consumer says, there really is nothing like that right now in the work place. i have a different company, exaggeration, three to five companies pitch me their version of whatsapp for the enterprise so that we can communicate, load up our address book and getting adoption. i'm a geek, i go on and try to get everybody else in the company to use it. nobody will use it. they're already on linked in, all have profiles on linkedin, already on facebook. it if i could turn on a tool like that for my co-workers i would pay for that. we pay for drop box, salesforce. >> something like aol instant messenger, whatsapp you argue won't capture this space why. >> if whatsapp was to roll out an enterprise or business thing that would be exciting. not all my colleagues are on whatsapp. it doesn't have the penetration

as facebook. linkedin almost every professional in high tech is on linkedin. it would be the easiest one if you wanted 100% adoption. >> only 30 bucks for an all-time high. >> you could argue we've hit peak consumer and enterprise slack. this is more evidence of that. >> in a year are we going to be hearing about a company that knits together all these communication tools so you only have one as opposed to deciding among them? >> i like that argument jon and i like watching the next year how much they go after the enterprise software companies and i think we will be talking about that. >> good to see you guys. great together. jon steinberg and michael santoli. >> when we come back new york city takes on uber pushing for cap on surge pricening. markets set to close in europe in just a few moments. we are looking at a tape where we're off the lows certainly but the dow is still down 247 points. "squawk alley" will be back in a minute.

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here, dow down 235, s&p down 21 to 2,01. news flow out of europe heavy. european courts weighing in on qe and simon hobbs at post nine. >> rougher close in europe. you can see the red is deeper here. actually london the worst performer of the major indices down 2.2%, because it has its heavy weighting to materials and oil and mining stocks. a look at some of the miners today. copper, of course, losing 3.5% on the session overall. glen corp here wiped about $5 billion off the market cap. a lot of copper producers slammed today as you can see. the oil majors or the oil companies are also lower. second line across europe, a lot of those are also in london. look at bp down 3% as oil, of course, brent trades $47 a barrel. individual issues are also making some big moves today. air france klm had to deny a report it might be willing to ax 5,000 jobs during the course of

the year, the stock down 4% on broker comment today, goldman says commerce bank is at sale at 4%. other broker comment edf down 5%, big heavy weight utility. the big news out of europe today is that finally we have a judgment, a binding judgment from the european court of justice pictured here in luxembourg earlier today where the advocate general in charge of this case suggested that the european central bank was okay two years ago to promise to buy bonds. speaking in spanish. okay two years to launch the omt program. it removes one clout that we have over qe if that is the sovereign level what they're going to announce on january 22nd. let me read what he said because this is a swipe particularly at the german quarter that bought the claim. the ecb must have broad discretion when framing and implementing the eu's monetary policy and the courts must exercise a considerable degree of caution when reviewing the ecb activity since they lack the expertise and experience which

the ecb clearly has or the ecb has in this area. two points to note here coming out of that. it's a smack down for the germans. it may be that the german court, therefore, opposes what it's hearing will. the other thing, carl, they're not clear about whether the ecb should take on risk and what it should do in the case of a country that defaults or alternatively going to benefit from its bond buying because it holds the bond. it's a complicated technical picture. it may hold back the margin, their ability of shock and awe if you still believe in shock and awe january 22nd. back to you. >> thanks, simon. >> new york get a cap in surge pricing? new york committee on transportation just holding its first hearing on a bill that would cap the premium for higher vehicles like you know and lyft can charge in high demand periods at no more than double the normal rate. joining me chairman of that committee, new york, city council member rodriguez.

it thanks for joining us. first of all, there are some statements from uber and lyft on this. i want to show those right off the bat here. because they've got a reaction to this. they're saying dynamic pricing ensures uber remains a reliable ride in communities during times of peak demand, that's uber. statement beginning that way and lyft similarly saying that supply and demand kind of works this out here. so that's my question. as long as the consumer knows how much it's going to cost during a time of high demand why get involved? if it's four times as much if that's what it takes to make sure i get a car who cares? >> i think residents in brooklyn where normal rate is $15 and now they had to pay $94 for that rate, they will have a legitimate concern. this is not only new york city. this is throughout the world. like uber having hard time in many places, the last place was in colombia where also they made a decision that they would be

shooting down uber. so we need do right now to be sure that we work with this corporation, a $40 billion corporation, they should be, wog, they should be able to work with us, sit down and discuss the regulation that allows to provide the best services to the consumer. we love uber. we love lyft, any individual corporation that is committed to take the risk and provide the service for a consumer. what we are saying when we move uber to the side, raise are $15 to 49 that's not a raise for the working or middle class. >> bringing down the surge pricing rate would create more competition for your traditional taxis because their value proposition is, you know, we have a base rate and maybe a slight 50 cent surcharge in times of high traffic or high demand but overall, if you have more competitive pricing for uber and lyft during surge

times, do you think that would further erode the taxi share of this market? >> look, even uber recognizes that they will sit down with us and have conversation about surge pricing. it was one of the questions that i asked uber as my role as chairman on the transportation committee. we want to work with uber, with lyft. what we are saying, everyone coming to do business in new york city should have the same standard and regulation that the yellow and the black and the green are following in our city. so we understand that we don't have problem in the surge pricing. what we -- our issue is how can we regulate in a way that a consumer is able to be able to say i can afford to use a taxi going from brooklyn to city college where the traditional price is let's say $50, i shouldn't be asked to pay $150. >> what's wrong with it just being a high-end product, not

every product is aimed at every income demographic in the world, right? >> well -- >> a product that only the wealthy can enjoy. something wrong with that? >> there's nothing wrong. i believe in the free market society but i also believe that this is not a sport industry, this is not about any other industry. we're talking about an area of service that is regulated by the taxi limo commission where hard-working mom and pop have [ inaudible ] 30 years ago and now see the value of those being reduced, and how can we work in a way where big corporation is able to get a good return without hurting the industry of those that are investing in the yellow, the black and green car. most important is the consumer. we want to keep transportation affordable for working class, affordable for middle class. >> you've got lots of complicated issues to work

through for sure. i don't envy you that. thanks for joinings us. >> thank you. when we come back improving your iphone cell reception. it is possible. re/code's ross mossberg says with the iphone 6. dow down 250. 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.

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major averages sinking after a slight comeback last hour.

we are now down near the lows of this session. the fourth day in the red for the major averages. let's bring in art cashin director of floor operations for ubs. you've got bears on your tie, you said it's a metaphor. what does it pertain to today? a lot to work with in the markets. >> there is. we're at an important juncture right here where we are retesting the morning lows. if they hold without failing badly the bulls may try to turn this into a short squeeze. if they fail badly then now that europe's closed, there may be another down leg built in here. we're at a vulnerable point. >> leading the dow down jpmorgan is responsible for the majority of the points to the downside. that stock down 4.5%. but goldman sachs is not far behind. we have more bank earnings this week and not seeing a whole lot of signs of strength in that sector. do you think that could lead us more to the downside throughout the week? >> certainly makes you vulnerable. there is no question that the financials have not behaved

well. used to be a leading factor in the market. with strain going across the atlantic here, things could get a little dicey. what they want to do is try to hold right around here. >> art, we've got intel earnings coming up on thursday, more tech earnings coming next week, how important do earnings from big companies like an intel, like an apple, microsoft, become? they have global business, going to give us insights into how they're performing and what their consumers and their clients are doing, how important do those become when we have this volatility some. >> you said it well. one of the key things we will be looking at is the impact of the strong dollar and what is it doing with international trade. and i think apple is in a rough spot. people are so optimistic about apple if they don't knock it out of the park with their earnings, they could have a little bit of a problem. we'll be watching the techs and hoping that they can outweigh the difficulty we see with the financials. >> thanks, art.

>> my pleasure. meantime gopro shares recovering slightly this morning after that massive drop yesterday. following a patent reveal that apple could be working on its own sports camera. joining us re/code's co-executive editor walt mossberg. good to siee you again. >> good morning, carl. >> what did you make of this one? >> i have no information that apple is going to make a gopro competitor and as you just said, apple files patents regularly. there is a very good website that tracks these and when something like this examines up gets publicity. but as far as i know this is just another patent and, in fact, this one has a little bit of a history having to do with some intellectual property they acquired from kodak. i honestly don't equate apple filing a patent with a product following. >> right. we talked about new categories

in general all through 2014 being a big story at apple. we know about apple pay, the watch is on the way. do you envision another category being started in the next 12 to 18 months? >> you know, i think, carl, those two things are a lot for apple to process and swallow. we think of them as a very big company, largely because of their market cap. but they tend to take their time getting into all new categories and i would sort of be surprised if they took another big leap into another big category this year. >> walt, cou have the take on -- based on history what we might see with the apple watch? often times apple is a little slower getting into these categories and ramping them up than some of the eager folks might hope, sometimes they introduce higher priced versions of something first and then let the lower priced versions come out later. do you have expectations or even a sense of how this might work

in 2015? >> i'll give you what i think, jon, is my general expectation here. now this all assuming the execution is right. let's assume it's a great execution and the thing really works and so i think the first thing that will happen is the apple hard core loyalists will probably sell out a large number, a relatively large number in the first weekend or -- this is the pattern with apple that you're very familiar with. then i think it will attract some other people, it will do okay, but i don't think -- i think people haves this expectation that apple products ru always have a hockey stick thing. where it's a little flat for a short while and zooms upward. you look back at the history of i pod, iphone, these things were not immediate giant blockbuster

sellers. i think it's going to take a while on the watch and i, frankly, i don't think by the way, that the -- that the inexpensive one is going to come late but i do think that people -- even the inexpensive one is 350 bucks and i do think that the more expensive ones are going to be premium fashion products. and we don't really have a lot of experience with knowing how that's going to go. >> meantime speaking of iphones your review on the reach 79 for the folks who want to improve their reception, walk us through it. >> this is a case for the iphone 6 that has another antenna in it, big old antenna, sandwiched between the plastic of the case and when you attach it, it pairs -- you don't have to do anything with this -- it pairs with the an tell na and phone and it's supposedly will give you better voice reliability and faster downloads. and i tested it for nearly a

week, mostly around the washington, d.c., area and i found mixed results. about half the time it seemed to help, half the time it seemed to make no difference and actually in a few occasions it actually degraded speeds. so my conclusion is, if you are being driven crazy by dropped calls and really slow downloads and a lot of netflix buffering or whatever, hey, it's 60 bucks, it's cheaper than changing carriers probably or going through all the hassle, it's probably worth a try. i can't xwarn iguarantee it's going to help you. >> seems to be your definitive line, worth a shot if it is driving you bananas. talk to you soon. >> good to see you. >> walt mossberg. when we come back the state of american business, the u.s. chamber of commerce laying out its policy agenda for 2015 and the ceo tom donahue will join us in a few moments. rick santelli, what are you watching today? >> oh, so many things.

of course we have to talk about the fallout of retail sales. maybe equate that to the employment reports drop in wages and why we're not seeing gasoline prices. the drop at the pump that is. seemed to show up in retail sales. we'll also talk a little canaries in the coal mine, heard someone say tesla is the apple of cars. we'll it talk about all that after the break.

coming up is captain america starting to crack? after dismal retail sales report

is it time to reassess where to invest? plus the big name analyst who upgraded netflix is going to be with us live. and we catch up withist sugar ray leonard trying to knock out the sports tried and true business model coming up at noon. see you in a bit. >> sounds good, scott. over to the cme group, check in with rick santelli. >> hi, carl. you know, it's been a huge day and if i look at retail sales, obviously it was weak and wasn't expected stock so. i think there is a guy tie-in with the drop in wages and some say it was a one off anomaly. the reason i think it's important is in the context of gasoline. the drop in gas prices doesn't seem to be showing up everywhere and we've talked many times how the immediacy of how it affects things like the credit market is different than the long timeline of how it works into the culture of the retail. but here's the issue. okay. imagine a bucket okay, imagine you have a hole where the water is coming out. okay. the water coming out is, you

know, we don't talk about things like property taxes, and even though there's all this disinflation with regard to a financial interpretation, you still look at food prices, look at all the things the middle class has to deal with and put in dropping wages or stagnant wages, whatever adjective you want to use and the water is coming out at a certain clip. the gasoline is going in. the gasoline benefits are going in more slowly than some of this is coming out, based on that report from employment. i think that explains the dynamic. now as far as interest rates, i don't think it's any surprise that the behavior of the it fixed income markets really since that wild day in october gave everybody a head's up the treasury market isn't just a lax force, a lay za fair trade moved only with the spreads. zm a global issue here and the interpretation is important if you want to get it right. i will give you one clear example. i've heard so many experts say that the dollar strength is systemic risk. it's risk to the system.

i understand it, but here's where i think the skem man ticks make a huge difference. it isn't a strong dollar that affords the global anxieties. what it should be is the fact that europe's weak and pushing their currency down to help exports. the japanese are doing things to keep their currency down. many funneled so much money in energy because at least it was a wise decision on what to do with the lickety provided to the few able to put it to work. the issue isn't the systemic problem of a strong dollar. the real culprit here is why the dollar is strong. what pushed it that way? don't lose sight of the real fundamentals. another issue, is that we should look at the canaries in the coal mine, high flyers, to get a good indication -- i remember just a few years ago that many people in the s&p pit, in the dow pit, that trade equities were saying, you know, this market is going up in a it fashion that doesn't equate to the fundamentals. coming down it might be the same

thing. that's the way the markets are. as far as tesla, the canary in the coal mine, they sell 30 to 35,000 cars, they're telling us in a short period of time they will be selling 500,000 cars. they're not the apple of cars. they're the tucker of the teens. it's a wonderful car but it's not practical. i remember having a debate with lebeau about china they love luxury cars, it may be expensive but that doesn't make it a luxury car. a pretty body that doesn't have a big range. to think they're going to make a $30,000 car when the battery in the current car costs over 32, you have to watch the canaries in the coal mine that went up too high on more of a climate change religion than an actual apple i make money every quarter. back to you. >> you do know cars, rick, that is one thing we have to give you. rick santelli in chicago. let's get up to steve liesman with a cnbc rapid update on that data this morning. >> carl, especially the retail sales data, the big miss, bringing down the fourth quarter estimate, cnbc wrap it up done

by moody's ap listics down 0.2 to 3.2%. still not a bad number coming off the five in the third quarter but erasing hopes we're going to get to 4% which some had out there. some still holding out, 2.5 to 4.2 is our range. here's where they are, deutsch bank at 4.2%, they don't change their number. barclay's at 3.5, jpmorgan credit suisse at 2.9, should be morgan stanley i'm sorry there, and goldman sachs at 2.5% there at the bottom, most pessimistic of all. still more date to come, the number could get revised, tracking 3.2, not it too bad off the 5 in the third quarter. >> all right. thanks so much for that update, steve liesman. when we come back we will keep talking about growth because american businesses are expecting 3.5% growth through the middle of this year. what about the longer term outlook. tom donahue will join us with

his economic outlook and the chamber's 012015 agenda. "squawk alley" will be right back. financial noise financial noise financial noise bulldog: through monday, save up to 40%

on clearance mattresses. get up to 48 months interest-free financing on tempur-pedic. pup: i found a red tag! [laughter] bulldog: mattress discounters' year end clearance sale ends monday. welcome back to "squawk alley." check out shares of foot locker down 5% so far off their session lows. the stock moving lower after goldman sachs downgraded the shares to a sell from neutral and lowered their price target to $47 a share from a prior $55 target. the firm citing concerns peak margins on basketball shoes may

be at risk. foot locker shares down 5%. rival finish line is down as well in today's down market, carl, off by about 2% today. back over to you. >> thank you so much. the chamber of commerce unveiling its 2015 policy agenda in annual state of american business this morning. topping the to-do list improving the keystone xl pipeline and with republicans in charge of congress the chamber is advocating an agenda. joining us this morning is tom donahue president and ceo of the u.s. chamber of commerce. good to have you back. good morning. >> glad to be here. >> seeing keystone at the top is not a surprise although watching the president with congressional leaders yesterday makes one think the only thing they can agree on is the college playoff. think there's any hope for this? >> actually i think there was some agreement yesterday. certainly on trade. they're going to work together to move ahead on the trade arrangements because that will open markets for american

companies all over the world which is critical because i have ebeen watching and listening to the news and everybody is concerned about what's going on in foreign markets in terms of our ability to export. there were other issues they agreed to work on, infrastructure and other issues that i think we'll find common ground and one should never pay a lot of attention to white house talk about vetoing legislation. it's part of the negotiating process. i would hope that it will be more positive before it's finished. >> tom, one step to say they agree to work on an issue. another thing entirely to actually affect the necessary legislation on some of these issues. i'm wondering how confident you are that congress can affect some of these changes that are good for both business and the public alike? >> i had three or four reasons to think it might. first, just as an aside, we all understand that the senate is going to return to regular order

after basically doing nothing for five years. i think that's going to help a great deal, more discussion, more opportunity to skroets on issues. the majority leader of the senate and speaker said they're going to work together. at the end of the week on thursday or friday the republicans and the democrats will each go to their own corner to have their caucus, there will be a way, and the senate and the house are meeting together, the republicans, and i think that will bring them closer to working together. if you looked at the election, one of the very important issues that came out of all the polling is that people want the government to deal with the challenges that they face and they want them to work together and they're looking for competence and commitment to governing. >> and tom, last year, two of

the areas that you pointed out where you were looking for progress were immigration reform and health care reform. what's your take on which of those in 2015 continues to be most pressing, given where we are with the executive action on immigration and health care growth in costs being down? >> let's look at the immigration first. you have to come to a fundamental conclusion nobody wants it to run for president or nobody onces to run in very difficult states for the senate or the house without dealing with immigration because the other party is going to go after them on it. i believe that there is a growing sentiment that best way to deal with what the president did, which is to act with what he believes is his authority, is to quit looking for a legal way around this, that's going to be difficult, just go past the legislation and put it on his desk. in terms of health care, it's a different issue.

health care is 17, 18% of the nation's economy, it's the most expensive, the most comprehensive change that we have ever put against this system, and we'll spend the next five years refining, adjusting, i mean the president himself keeps changing the legislation, fine if the congress lets him do it that way, but he's doing it and the congress will do it as well because the american people, some parts of that legislation, just aren't going to work and we have got to fix it. >> tom, you know, it's interesting because there's been some discussion as to why banks were able to roll back so much of dodd/frank to date but much more difficult to roll back any elements of the aca, why the difference? because of the size of the legislation? >> first of all, banks haven't rolled back very much of dodd/frank. we still have a third of it that has to be articulated and written into regulation so it

can happen. if you look at any major piece of legislation in this country over all of your memory, it has to be refined going forward. when the congress of the united states writes a big piece of legislation, facts aren't always considered and you have to make it so it fits. so there is all sorts of refinements in anies piece of -- any piece of legislation that both the house and state and both democrats and republicans will debate, but they all know it has to be done because the consumers are the ones bearing the burden. and the banks, a, haven't done a great deal to roll back dodd/frank and we're only beginning to see the stuff that we're going to have to roll back, adjust and refit in the health care area and we're planning major engagement in that in the next 12 months. >> the agenda is worth heading, tom. thanks for rolling it out with us.

see you next time. >> look forward to it. >> the president and ceo of the u.s. chamber of commerce. meantime looks like we're going to fight it out around s&p 2,000 here. art cashin a moment ago pointing out sort of a crucial area as to whether or not the bulls can make a stand in the latter half of the session. we did see a big reversal the opposite direction yesterday. and then keeping our eye on crude which is no longer in the green. that's been a tell at least for the past couple weeks. >> the bank sector one more time, jpmorgan, wells fargo reporting earnings this morning. jpmorgan and bank of america, which reports tomorrow, have both broken through their december lows and their 200-day moving average. traders are saying that's an important technical level for the industry and for those stocks looking for a bottom in jpmorgan which continues to move down. >> good day for gopro, still up about 5% after tanking yesterday. not good for ebay and amazon after that retail report on december. those are both down about 2% which is an interesting tech reaction to those numbers,

perhaps. >> as we continue to struggle about whether or not this retail sales number is really telling us something about the way americans are shopping right now. the half has a great show coming up. speaking of the netflix upgrade, sugar ray leonard, that does it for us on "squawk alley." back to headquarters, wapner and the half. ♪ >> yes, welcome to the halftime show. starting lineup for today, jim lay venal that the president of lavinle that management asset, pete and jon najarian co-founders of option munster, steve liesman, cnbc's senior economics reporter and from bank of america, merrill lynch with us and steve grasso from the floor of the new york stock exchange. he, of course, with stewart frankel. our game plan today, it looks like this. and the winner is fresh off a big win at the global's netflix shares get upgraded to buy. the analyst that made that call is with us li