>> we are now at 1.678. we were at 1.666 just a little while ago. crude up 4.5% spshgs that's what's helping the stock market today. >> seattle or boston. >> have a great weekend. three big thingsing that we are watching right now. stocks eyeing their first back to back monthly losses since 2012. the ten-year yield continues to plummet. investors go wild for a burger company. welcome to "street signs." i'm brian sullivan. mandy, you've made it back from man diego, as it is now known forever. >> well, actually, things are a little worse than they appear out there in the markets. we don't want to startle anyone, but basically visa is add about 70 points to the dow all by

itself. we're finishing off the worst month since last january. it's also the worse week in seven for starts. the only saving grace is that the losses for the dow and s&p aren't nearly as bad as they were one year ago. let's get to the new york stock exchange, and out to rick santelli in chicago after that. what are we watching in particular on this friday afternoon? >> we're waiting to see whether or not the markets can make a comeback. there seem to be attempting that right now. helped in large part by the energy sector. recently the markets, of course, moving very much in tan dem with the price in oil. today that hasn't been the case. although with the gains we're seeing in crude right now up over $2, it looks like markets are finally paying attention. energy sector among one of the better performers in an otherwise down day. let's take a look at a couple of sectors on the move today. industrials moving to the down side. led by the truck maker packer that reported disappointing revenue. consumer staples you should

pressure throughout the session along with financials. of course, concerns there with this continued low interest rate environment pressuring that group. telecom as well as materials and energy showing some strength as we head towards the close today. the down movers, visa up on better than expected results, and, of course, the news of the four for one stock split. we're seeing weakness in some of the old cap or the old name big cap tech stocks. companies like cisco and microsoft, that's putting pressure on the dow. along with chevron, which reported stronger than expected results, but says it's cutting its capital expenditures by 13% this year, and suspending its buy-back program because, of course, of these weaker energy prices that we are seeing. just quickly want to check out some winners. amazon on better than expected results. investors rewarding google. better than expected results. back to you. >> let's go to the bond market.

rick santelli. rick, when you think the ten-year yield can't go any lower, it is now back below 1.7%. it was 2.8% just ten months ago. it's just -- what do you say about the bond market anymore? >>. >> you do qe. you got your wish plus more. it's about what interest rates are telling us. it's fascinate whatting you said about 280. if you look at a 13-month chart starting at the beginning of last year, all the horsepower was in january. you dropped 40 basis points. for the next seven and a half months, basically from february through september, you are in a tight range of 280 to 240. that 2080 reference. then something happened in september of 14. we failed on one try for rates up, and then the rest is history. qe has ended. interest rates at zero, and then we have 5% to 2.6% between third and fourth quarter gdp. there's a lot going on that can't be fixed by central banks.

it's going to have to be dealt with in the bond market that seems to be doing the heavy lifting. >> rick santelli, good to see you. let's bring up a chart and take a look at what's happening with oil prices. they are spiking right now. this is always a very interesting thing to watch as we go into the settlement at 2:30 eastern. there will be an acceleration to the upside or a deceleration to the down side. $46.55. still, brian, let's put it in the bigger picture here. it's still the seventh monthly loss for crude. that's the longest monthly decline we have seen since all the way back in 2008 and 2009. sort of in the depth of the crisis. >> let's bring that chart back up because that's interesting that you noted that, mandy. good catch on it. listen, guys, oil -- it could be just simply some sort of option going into the weekend. some -- whatever it might be. or, remember, the rig counts fell 94 week-over-week. they drop 38 in canada. maybe traders are placing bets that because rigs keep coming off line, we might now finally

start to see a little evening lib yum in the oil market. >> don't they always say that the cure for low oil prices is low oil prices. >> in houston in 1986 it took a while to find the cure. thank you very much. well, this week it's not over yet, right? we're want dead yet, but you may want to consider yourself already setting up for next week because it's a big one owner on tuesday we cars. big auto sales data coming out on tuesday. good indicator of the economy. wednesday, it's all about earnings. just a few of the big names that are reporting on wednesday. you can read them here. on thursday we get the latest read on natural gas inventories, and on friday it is all about the all-important monthly payroll number, which, by the way, hasn't hit markets that much in the last couple of times, but we still say all-important payroll number. let's look at next week and

beyond. >> what is the number one thing on your strategy and investment radar? >> it's a function of what is the fundamental underpinning for the economy, and is it strong enough to be a fertile climate for corporate profit growth and get traction in here and begin to accelerate and be the catalyst for higher equity prices? the key to a self-reinforcing expansion is job growth. for us next friday's job number, we're looking obviously at a number that should once again print above 200,000 and build on the momentum we had in 2014. more importantly, probably within the number is to see one of two things happen. either reverse that down tick in wage growth that we had for december where we fell .2% and/or to see that u6 number, the under employment rate continue to work lower. in the last two previous economic expansions, it was when the underemployment rate that u6 number fell between 9.5 and 10

that sparked an increase in wage growth. i think that's something the fed is going to be focussing on as an indicator to that slack compressing in the marketplace and be evidence for the perspective liftoff date that they're desperate to enact. >> a lot of people have been hoping the 2015 will be the year of wage growth. according to the pay roles, do you think this particular number is going to start showing up the loss of shale jobs that we're hearing about, or is this still too early for that to really segmentally hit the tape? >> just judging from the initial jobs claims, we did back up a few weeks ago. up over 300,000. you know, thursday's number falling some 40,000 to 265. it's just that we haven't seen much of that yet. that doesn't say it's going to be fourth coming, but the fact is about 70% of non-major shale production is actually hedged out through the better part of 2015. while it's not necessarily

profitable to be running at $45 or $50 barrel oil, about half of u.s. shale production is profitable above $60 a barrel. i don't think we're going to see kind of mass exodus of jobs out of the energy space at least for a couple of months if not quarters to come. >> i hope are you right. i suspect you might be wrong, mark, based on our reporting. >> what's on your radar? what's the number one thing you're watching right now? >> earnings expectations. that's something that's different. earnings expectations that have been rising pretty much since 2012. in the last couple of months they've started to reverse a little bit. i don't think it's going to amount to much. you can blame that on oil. you can blame it on the dollar. i think that the basic things drove american profits higher are still there. before we're through, we may be a little more worried than we are right now. >> so if earnings expectings are starting to come down and certainly the s&p targets are coming down as well, john, at the end of the day it's going to make beating it all the more

easier, right? >> from here to the end of the day, it's a question. there's no such thing as a straight line in our business. you want to buy for the end of the we're. i think the markets could be higher, maybe substantially higher. it's a question from getting from here to there. this may be the kiss off to deflation. just as 1948 was the last scare for inflation. we've got to get from here to there. that's the trick. >> what's going to drive prices for the stock market up? >> the fed. the fed is still going tobacco dative. the ecb is accommodative. the japanese central bank is accommodative. there's still money being pushed towards the economy. as that money flows from the central bank towards the economy, they tend to flow through the capital markets. it's a little bit like a beach ball. think of pushing a beach ball under water. it will go down, but you have to really hold it. it really wants to come back pretty quickly. >> john and mark, good to see you. thank you very much. enjoy your weekend. >> thank you. >> thank you. >> keep warm. you are looking at a live picture of nfl commissioner roger goodell. he is speaking with the media at

the annual state of the league speech. it's always given right before the super bowl. that's not goodell. that's somebody asking a question. there's goodell. the big news so far is that the commissioner has announced the creation of what he calls a chief medical officer designed really entirely to reduce concussions and other football related injuries. here to keep an eye on this event and maybe addresses tom brady's deflated footballs. we'll let you know. >> the interview you cannot afford to miss. rare insight from a voting member of the federal reserve. san francisco fed president john williams sits down exclusively with steve liesman. that interview just a couple of minutes away. >> and as we head to the break, a look at today's mystery charlotte. now, this index, perfectly timed the 2008 crash, and now it's trading at a 28-year low. the ominous answers. "street signs" returns.

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>> slowing more than you expected? >> no, it doesn't for me. you have to look under the hood

of it to understand what was in that gdp relief. i still see strong consumer spending. we also know the consumer confidence is quite high. we're also seeing really good real income growth from households. i see a lot of strength on domestic economy. some of the negatives were kind of expected. payback from that strong third quarter. more generally i see the u.s. economy entering into this year with a lot of momentum for very good growth. >> what's your numbers like for the beginning of this year and for the full year? >> so for real gdp growth i expect to see growth around 3%. better than last year. >> the cavat, you have been predicting threes for a long time, right? they haven't really come to pass. >> i think we've gotten reali realistic. i feel like we've got good momentum this year. we're seeing really good job growth. we added nearly 230,000 jobs on average a month last year. i don't expect job growth to be that strong, but still very good. i'm expecting the unemployment rate to reach 5% by the end of this year. >> wow. >> very good year. >> what's your definition of the

nonaccelerating unemployment rate? >> sure, i view a normal unemployment rate to be about 5.2%. of course, there's air bands around that kind of estimate. i see us getting to full employment basically by the end of this year or before then. once we get past the low period of inflation. >> we have to get back to the imflikzs of this for your thoughts on policy, but we had other data this morning that's very lackluster wage growth. when you look at the employment cost index, it was up a little bit. 2.3%. some economists say you know what at 3.3%, 4% that's where you get a tight labor market. >> we're not in a tight labor market yet. i am a californian. i'm a glass half full kind of person. i actually saw that that pick up in waej growth is a positive sign. it's true. i'm looking for 3.5% wage growth in a full strength economy.

we're not there yet. i do think it's encouraging that we're seeing some pick-up in wages, but i don't expect wages to pick up until the economy gets even stronger. to me this is consistent with my views on the economy. >> you also had a tick down when you look at core pce inflation, which is something you obviously follow. it's a different measure of inflation. you follow it for a number of reasons. that tick down just a little bit to 1.4% moving away from your 2% targets. >> right. i recognize that. obviously the big story for the fed right now is inflation. it's running lower 2% inflation goal, and with the strength of the dollar and the big decline in energy prices, we're going to see inflation run well below 2% for the next several months and a couple of quarters. we have to read through that. recognize there's a transitory effect. my view is that once those effects run through the economy, we're going to see underlying inflation and overall inflation start picking up in the second half of this year. i expect this to be close to 2% inflation by the end of next year.

>> next year. end of 16? >> end of 16. >> does all that keep you on track for what you had said earlier, which is a mid-2016 lift-off from the fed? >> my current view -- this is, of course, my view. i'm not speaking for my colleagues. it's that around the middle of this year is the time that i think in my view that we'll be getting closer to should we raise rates now or wait a little longer, collect more data, get more confidence in the forecast? my views are basically the same as thief been for the last few months. the round midyear is a good guess. when we really are getting close to that point, raising rates will be appropriate. i'm not predicting that it will be joon you or any particular meeting. i think we're getting closer to that. >> if inflation is not moving forwards your 2% target, if wages aren't moving up or anything close to that 3% or 3.5% target, why would you be raising interest rates at that time? >> i think two points i would like to get across. first of all, we are getting pretty close already by the middle of this year in my view to full employment. in our employment mandate, i think we'll be closer to

achieving that. the second is we have to remember we're starting from a position with extraordinary monetary accommodation. we have zero interest rates, which means negative inflation adjusted interest rates. over aa $4 trillion balance sheet. i'm not talking about normalizing monetary policy or even tightening policy in a way. i'm talking about starting to process where we trim back some of the extraordinary accommodation we have. >> how much would you trim back this year? >> well -- >> what would be your target? >> you know what i'm going to say? it depends on the data. >> i have to ask. >> it's -- >> it really is -- we're in that mode of dependency, and that's the right way to do it. >> let me shift gears. a new concept was added to the statement this time. international developments. how does that play into policy? >> everyone understands it's part of the global economy. we're affected by events, economic growth event prospects around the globe. that's always been true. i think adding that phrase just as recognizing clearly what's happening in the global economy

in terms of growth in asia, in europe, around the world, is an important factor determining our exports. it's an important factor determining global financial conditions. it's recognition, i think, acknowledgment that that's the world we live in, and, of course, those are factors that are indicators that influence the outlook for the u.s. economy and that's what affects monetary policy decisions. it's not that we have goals around foreign growth or things. it's really an enput into thinking about where the u.s. economy is going and what's the right policy implications. >> john, we're going to leave it here for now, but we're going to have them talking for an extra we're going to do for cnbc.com. thanks. >> thank you. >> mandy and brian, back to you. like i said, we're going to spend a couple of minutes here, and viewers can see the rest of the interview on cnbc.com. >> thank you very much. here's a question weave been asking on street signs for three months. where is the money that we're saving on gas actually going? the top credit card companies are finally giving us some solid

answers. that is next. >> and big calls on the dollar stores. k-cups, and jordans. big talks coming up when "street signs" returns. welcome back to showdown!

jerry rice here with 8 year old andrew hunter debating who will win the big race between the tortoise and the hare. what do you think andrew? rabbits are faster. it's not a rabbit, it's a hare. what's the difference? maybe figure that out before debating the best wide reciever of all time. wait, are you odell beckham jr.?

here's an interesting turn of events. pump prices are starting to change course after seeing record declines. on tuesday pump prices moved higher for the very first time in 123 straight days, brian, and they continue to move higher. triple-a puts the current national average for a gallon of regular at $2.05. that is up a penny from last week. a full $1.20 lower than it was this time last year. is it a bottom? who knows? it's an interesting turn of events. >> yeah, it certainly is. we are watch it loefl. we're also watch this closely, mandy, because visa and master card both commenting on the lower gas prices on their recent earnings calls. mary thompson back with us. mary, i guess a couple of questions. how much really are we saving in terms of lower gas, and more importantly, and this is a huge economic question, what are americans doing with those savings? >> the companies had answer on their calls, providing welcome insights on how consumers are spending their money.

insights gleened from the receipts the companies have to consumer spending. charlie sharp pointing out there's been a 30% dedlin in fuel prices since june, which translates into a $60 a month savings for the average consumer. >> according to our surveys, approximately 50% of the savings consumers are seeing is being saved. 25% is being used to pay down debt. approximately 25% is being spent in other discretionary categories. >> now, sharp is saying they're spending that quarter of the savings on discretionary items like groceries, clothing, and eating out. eventually visa does see consumer spending more as savings build up, moving from smaller ticket to the bigger ticket items. this observation isn't krael to what a lot of economists have been saying, that there is a lag rather than an immediate affect on consumer spending from lower gas prices. master card ceo -- they'll need to insure that they have lower

staying power before they spend more? >> if you were to ask my opinion, and i guess i would say probably a month or two away . >> back to you. >> all right, mary. thanks very much. that's not great news. >> will the increase in consumer spending more than balance out the decrease in fixed income and fixed business investment in the oil industry? i am afraid it won't. that makes me more nervous because people were saving it and not putting it back into the economy. >> that's absolutely right. how many people have we spoken to that say consumers are

two-thirds of the economy, and this is a wonderful -- it's a tax savings essentially. money in their pockets. if they're not getting out there and putting it out back into the economy, they're just saving it, hoarding it away, then -- >> 400 or so people associated with the drilling rigs in the united states. when those rigs come down, 400 people either lose their job or probably lose pay. >> yep. >> that's the concern. >> net negative. net positive. the story will have to play it out. >> i hope it balances it out and more. crude up 7%. what the heck is going on with crude oil? jackie deangeles may know. we'll get to her in a second. it's not a stock. it's an index. it could also be a big warning sign for your money. the answer coming up when "street signs" returns. [ radio chatter ] ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris

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important breaking news on oil. crude really surging into the close. let's go to jackie deangeles on the new york mercantile exchange. how do we explain this? >> good afternoon. traders are looking at this pike a couple of ways. the first is that products are expiring. that tends to send prices up, but also technicals pointing to a buy, and we've seen this

acceleration in the last 30 minutes of treying trade. it's a pattern that we've been seeing over the last week. traders really piling on here, but to note wti's on pace for its best day since june of 2012. it's up about 6.5% right now. also, key to note that we did break that $50 mark in brent. looks like we're going to close around 52. big increases going into the close here. back to you. >> yeah. look at that. a big spike here. i know there's probably some big relief sighs at least for one day in the bakken and permian. if you don't think oil is important to the stock market, folks, take a look at the turn. i know this chart is not going to necessarily reflect the timing, but what i want to show you very quickly is, guys, we put that down for a second. that's beautiful. we'll get to that in a moment. let's look at the dow versus crude oil. this is the intraday chart. the white line is the dow. you can see it's beginning to curve up.

if oil companies lose all that earnings power, that's going to be a big hit to the stock market. >> you are right. for the numbers on the dow, we were down by triple digits. around 150 to the down side was the low of the day. currently we are only down by ten. in other words, any minute now we could easily turn positive on the dow. the s&p and the nasdaq are already positive. we'll keep on watching. there's quite a bit of time to go before the day ends. >> that's why our team is the best in the business. they got that chart rendered that quickly. if are you on the radio, it clearly shows the dow and oil turning together. i'm going call another audible. i want to push our team's limit. it's friday. it's been a long week. who cares. the beating will continue until morale improves. is there a way to have the ohi etf, and he we can mutter and mumble until that graphic is rendered because i want to see if the oil services stocks that have been walloped so hard.

>> there is the turn. >> ohi up 3.6%. also moving higher into the close. >> the oil stocks are recovering with the price. now crude is up $8. >> there's a feeling that finally supply has been cut down to the extent or will be cut to the extent we've maid maybe found a bottom. i wonder if sentiment is turning. >> one thing that's factually correct and one that could be completely made up. >> are you ready? >> i'm ready. >> the factually correct thing is that -- by 38 in canada. it's risen in canada the past couple of weeks, so we're starting to see a little bit of production come off line. maybe there's some of that will here as traders say, okay, how much production is really coming off line? i'm just speculating here. with this -- an 8% move it would probably not be technical. i just wonder if the oil desks are hearing something else. i don't know. >> like? >> i don't know. i'm not going to say. i'm just saying -- in a lifetime

a long time ago i traded chemical commodities so i kind of understand the commodity market. it's hard to move a big commodity 8% on just some phantom talk about option -- >> are you alluding to other countries possibly moving towards -- >> i'm not alludinalluding. what i'm alluding to is that dom is here with a market flash. >> yes, i am here with a market flash. we are going to talk about the oil stocks on the heels of what you guys were just saying. again, moving to the up side. you showed the oih, the oil services. the exploration and production side, it's one of the biggest gainers in the s&p 500. it's really manifesting itself on the stock market. leading the way higher in terms of the company specifics, neighbors industries, cameron international, denver resources, also -- they're all moving sharply to the up side between 5% and 10%. big oil companies are turning positive as well. integrated side, the big explorers, the big producers, you talk about the observationons and chevrons. some of the big names in e & p

exploration and production. mandy, brian, also doing well on the heels of that rise in oil prices. back to you, guys. mroo we've been putting our control room on the spot. still going to put ow the spot as well just to even things up a little bit. you were formerly a trader in your life. what do you make of this 8% spike that we're seeing in crude as brian was suggesting? >> i'm not suggest, but, dom, i think you got the wink and the nudge. do you agree with my wink and nudge? it's hard to move a commodity like oil 8%. >> it is. here's what i would say, though. right now we're still trying to figure out exactly what this move is, but what i will say just from a context perspective here, we know that these, yes, 8% is a massive move for a commodity. oil has been a very skittish trade for quite some time now. these big moves up or down, remember, even in yesterday's trade we saw the dow really get some steam towards the afternoon along the lines of the oil price recovery, if you lshgs only to see maybe things falter a little

bit, but these oil price moves do tend to kind of coincide with what's happening with the market. if we do see a fundamental reason why those things are up at least oil prices are up 8% today, that could be a reason pour some optimism, and, again, remember, oil and gas earnings are expected to be the single biggest drag for the fourth quarter earnings season that we're reporting. if you had fwoten rid of that big drag in oil and gas, we would actually be seeing a lot better earnings growth here for the overall market. >> you are true on that point. brooen. >> the only thing i would say to you, buddy, is earlier if the week we got the eia, the government data on inventories. we were up 8.9 million barrel fz inventory. more than double what was expected. it's the biggest jump in weekly inventories in more than 30 years for oil. i just can't see some supply-demand evening lik lib yum necessarily be the mover for a 7% to 8% jump in crude oil because every trader out there knows how much oil is sitting around in barrels or off shore.

>> on tankers. sure. >> this move would have to be either somebody got really caught out on the bad side of a trade, right, either in opings or maybe taking delivery, or somebody is making a big bet on future production. >> right. and making the call right now on that particular -- that particular line. you got to look at the curves, right? if you look at the curves right now, that's going to be the key for a lot of these oil traders tloult. jackie knows better than anybody. she talks to all those guys all the time. if you are looking at where prices are right now versus where they are in the future, maybe it tells you a little something. i with just say that a lot of the stock traders that i have been speaking to are saying that, you know, these are going to be volatile moves. oil is a volatile commodity, and when you see these things driving the market higher or lower, they can giveth right now and taketh away very quickly tomorrow as well. that's something that a lot of people are at least aware of right now. people have been calling it bottom for oil stocks for quite some time. you put p the xop, those etf's. you have been seeing people trying to leg into them for a

while. no one has taken that sniper shot yet calling a bottom, and that's a key for a lot of people right now. >> it's interesting you allude to that, actually, dom, because so many people were calling bottoms in the early stages of this crash, right? recently a lot of people have been keeping they are mouths shut because essentially they were wrong. we'll wait and see. i think people will be more cautious on this time. it is the best day for crude since june of 2012. >> we couldn't -- >> seven straight months now. seven straight months. >> what's amazing is we couldn't have made the statement you just made 20 minutes ago. suddenly it's become the best day in two years, almost three, but we could not say that 20 minutes ago. this is a gigantic move. >> maybe we can get -- throw it out there to the control room sfwloosh in the commercial break, i called up and bought a barrel of oil. i don't think that moved the market. it might have. >> i bought two. >> i'm just stocking up. >> i thought it was cooking oil. >> we're making light of this. a huge move. we'll get traders on this as

well. i have a feeling we're going to hear -- i hope i'm wrong. maybe there's chatter about something bigger. who knows. all right. also moving right now, shake shack having a huge day for its ipo. is it all hype or can it justify its lofty valuation? your buddy, your homeboy, herb greenberg, is going to join us. you may be surprised by what he says, actually. >> we're always surprised by what he says. okay. also, last chance to guess the mystery chart. it's an intens index that's fallen sharply recently. the last three months. it's down about 50%. down 95% from its all-time high. you tweet us your guesses. i know some of you have already gotten it right. that's the twitter handle. come on in, folks. i like to this more of a control... enthusiast. mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to.

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time now. a bit of a tricky one today. we told you it was an index. not a stock. it's down 95% from its all-time high falling over 50%. >> it can be considered an

indicator of global investment. it's not necessarily what you might think. >> it's a great index. it's a great find by you. the only thing i would say is just be careful about fuel costs. what they call bunkers. now, everything at sea has its own weird name. about 35% of a shipping cost. this is supposed to be net of earnings. i talked to one guy. he said, no, no, this is a reflection of what you said. weak demand. just keep in mind, if you do a 20-year chart of the bdi versus crude, they do tend to track pretty closely because you can charge the lower day rate when the price of fuel goes down. >> yes, brian. we have some in a while. as you know, this is ice i is ok

the move in northern iraq and fighting in kirkuk where we have seen an -- a surge in exports. it's over to 4 million in the past several weeks or a month or so. that has gotten the attention of the market that was very old sold and heavily reactive to all of the supply stories that have been hitting the tame over the past couple of weeks. >> what do you think will happen on monday? >> we'll have to watch the situation. we got to almost below $43 a barrel. the reaction from reuters and this was an -- a further increase overall. i think pressure should resume next week if it happens in kirkuk. >> so just to be clear and to reiterate, john, what you are hearing -- we don't know.

again, it's just rumors, right? trading chatter is maybe there's an isis move in kirkuk, iraq, and i would assume if that turn out not to be true, we could then expect the price of oil to go back to where it was pre an hour ago. >> yes, everything is okay, then just the spike will be quickly removed. >> what do you say it's going to be quickly rematthewed from the price, and then do we resume a downward trend? are there other factors that we'll continue to see a sliding crude or do you think maybe we're getting to the stage where we can find a bottom? >> coming back to $50 for brent.

they're trying to look for a bottom potentially, but, look, you still have the rising dollar. we still have the opec surveys showing more not less outpit from that and the shaky demand from the euro zone, china. these are some of the mixed data here, and in the u.s. signalling a potential for further downward pressure, and a lot of us are starting to see this rising dollar in particular. we're heading down to what we saw in the aftermath of the financial crisis. >> you're bringing up an interesting point. if the rumors of isis in kirkuk turn out not to be true, that's great, but iraq is the story. i've been trying to tell this to a lot of people. when you look at the taka, we want to blame saudi arabia and the u.s. oil boom really iraq has become the global swing producer. has it not?

>> with all the looez and money to be spent in iraq, it might be iraqi oil production, which slows or stops the u.s. shale energy oil renaissance. >> that's very much right. that production is only going to continue to surge. they'll get you around 4.5 million by year's end here, and they are being the most aggressive discounters. they've all learned a lot about how opec prices and giving discounts. iraq is the most aggressive. they were $1 lower than saudi and some of the others. they are fighting hard to increase their market shares. yes, they are very much huge factors in the latest leg lower in prices here. >> john, thank you very much for coming on. especially at late notice when it's a big story of the day. thank you for your input. >> happy to help. >> i think john was on blue tooth first and then pulled over and got on the headset. thank you. now go back to z100.

a shocking new stat on homeownership. is a house in the suburbs no longer the american dream? we're going to show you the numbers coming up. >> we will. also, stay tuned for herb greenberg's take on the shake shack blow-out ipo. you may be surprised what the berg has to say. what do i do? you need to catch the 4:10 huh? the equipment tracking system will get you to the loading dock. ♪ there should be a truck leaving now. i got it. now jump off the bridge. what? in 3...2...1... are you kidding me? go. right on time. right now, over 20,000 trains are running reliably. we call that predictable. thrillingly predictable.

burger chain shake shack making a huge debut this morning. shares of shak are currently up. that's typo -- 132%. but some are now wondering if the valuation will be able to catch up to the stock price. with us now herb greenberg, mandy drury's best friend. herb, can this stock cut the mustard or will it eventually get fried? >> well, look, between here and there, meaning, you know, the next few months, anything is possible. you can look at go pro and see today i looked at it, i thought there was a two for one stock split. well, no, nature took its course but that's what happens with ipos every now and then. this does not make the grade, would not make the grade to be on our list because, first of all, valuation shorts are the most ridiculous ones out there.

plenty of people will tell you there are better fights to fight. this is what you can see from reading and understanding the business, a good operator. why would you bet against a good operator. then you have the situation where, you know, man i have, been through the battles with restaurant stocks before. one of the greats a long time ago with p.f. chang's. what did i learn about that? good operator, valuation short, and the president of p.f. chang's used to always take my phone and always sort 6 chuof chuckled because he knew i was wrong and he's on the board of shake shack. they have ten restaurants in a year. i think they can manage to do that. the key will be the right management in place and really, you know, the right locations. >> so you kind of were burned. you kind of were fried on the p.f. chang call, right, herb? you hit the point. they're hoping to open ten knew restaurants each year. they have 63 right now. and certainly the markup reward is growth. look at chipotle, for example. at the same time too much growth or just growth for growth's sake

can also burn a company, can't it? it can also burn the stock. do you think the rate they're expecting to grow that they can handle it? >> i think they can handle this. this isn't where we see companies having to slap up 20 locations anywhere just to meet wall street expectations. i don't think this company is going to try to do that. between licensees and their own stores, again, as long as they can manage the growth, and they say they're managing it internally. something i have said on air before, one of the great examples of that in a private company is crate and barrel which prided itself on putting up just enough stores in the right locations with managers that were home grown. so they've got everything in place with the right characters all around them. this, i believe, you know, look they may have a bad quarter here or there or may have quite a few of them, but that's for traders. this is going to be down the road. it will be interesting to see. look, i think, again -- >> listen, herb, i love your point. i thought you'd hate the

valuation but you're making excellent points about chipotle because the road to financial ruin has been littered with burrito bowls. thanks, herb. and thanks to the invite for your house. >> did you know he's not sitting on the proverbial phone book. he's sitting on two old tattered beach towels. how san diego is that? >> better than sitting on gatsby, his dog, i suppose. >> he will be at his feet. another drop in the home ownership rate. young people just not buying homes but is that necessarily a bad thing? we'll debate and discuss next. the lightest or nothing. the smartest or nothing. the quietest or nothing.

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any escape might help to smooth the unattractive truth that the suburbs have no charms to soothe the restless dreams of youth. so sang the greatest three-piece brander band every, rush, in "subdivisions" but maybe they were on to something because diana olick is with us along with nella richardson. is home ownership losing its luster? >> i think the suburbs are losing their luster. i would quote little boxes on the hillside but that's just me. what's so interesting is the home ownership rate going down is actually a factor of something really good that's going on in the housing market right now and that is that household formation quadrupled in the last report. a household being formed when junior moves out of the basement

and forms their own household. all the fomrmation was on the rennren re renter side. >> as a counter point to that though, to what degree do you think young people don't have the same attitude towards owning anything whether it be a house or whatever? it's the sharing economy. it's the subscription economy. you pay until you've had enough, and then you move on, try something else. >> and it's also a very economic issue. it matters where you start your career. a lot of young people are choosing the cities and choosing to rent. but i have to say children are the great equalizer. eventually even millennials will start families, have children, and look for good schools. a lot of those are going to be in the suburbs. >> so what can we read then nela into the future of housing? >> because i see other reports

that suggest millennials still want to own a home. you what tonight paint your walls and knock stuff down without having your landlord up your crawl. >> exactly and you want to wire it with the way you want to wire it. that's all true. i think the big difference now versus 20 years ago is that there is no government pushing first time buyers into the market. that's the big change. that's the quiet shift that we've seen. when rates were this low, we had clinton, we had bush push home ownership to a new generation -- >> no, i think they're being more careful, but i think we've seen a couple changes very recently, specifically lowering the fha premiums and 3% down payment loans and allowing people to refi into them as well. i think there's a subtle push by government. i think they're afraid to say we're pushing home ownership because of what just happened. >> actually, i think that's a return to underwriting standards we had in place two years ago. i don't see that as a seismic shift in policy. what i see that has changed is the instrument of policy,

freddie and fannie has not been used to attract first time buyers into the market the way it was under clinton and bush and i'm not arguing that's a bad thing. i'm just saying that the change has happened. >> i also think it's a myth to think that people don't want -- that young people don't want to buy a home. i think the problem is that we've shifted in the demographic to a much smaller age frame. that is we're getting married later, we're having children later, which means whereas you and i might have bought a home or maybe i would have when i was 25, nowadays you're buying a home when you're 35 or 40. >> we have to jump in. diana and nela great conversation. >> the dow is moving down. >> but crude oil is still up right now about 6%, so "the closing bell" will have a lot of action. the market is moving, dow down, oil is up. very quickly to my friend cecilia, you helped me out yesterday. your husband cause the show and she left me a sweet voice mail.

such good people out there. want to give a shout out to valley middle school from carlsbad, california, where i gr graduated from. i made it through eighth grade. >> thanks for watching "street signs." "the closing bell" is next. have a great weged. . thanks, guys. welcome to "the closing bell." i'm kelly evans at the new york stock exchange. >> and i'm simon hobbs in for bill griffeth this friday. stocks ending friday in much the same fashion they behaved for the entire month with a lot of volatility. today it's been in the red all day, a wide range as the guys just said, we're heading back down, down 116 on the dow. leading the way for the dow, chevron certainly. the plunge in oil getting real oth over the last few weeks as chevron scraps its buy back plan for the year. but oil itself reversing its