>> live from new york where business never sleeps, this is squawk box. >> good morning, welcome to squawk box here on cnbc, i'm here along with joe kernen and mike. becky and andrew are off today. oil this morning, prices a bit higher from the seven year lows we talked about yesterday. we saw it pushing strong commodity import numbers overnight that lead to improvement this morning but still looking at downward pressure from oversupply. wti $37.91 per barrel. $40 at this hour. as for the broad market, u.s. equity futures are suggesting that we would have a negative open. the s&p lower by 5 and the nasdaq lower by 16. >> here are the big stories that we're watching today. canadian pacific is preparing to revise the term of the bid for

norfolk southern. it will push cash in sharehol r shareholders hands and seek to calm regulatory fears. last week, they rejected it. and mostly it was regulatory concerns. i don't know how you address those necessarily. they're going to hold a conference call today. hunter harrison and major investor bill ackman will both take part in that. in other deal news, newel newell rubbermaid. it just rolls off the tongue. consumer products giant jarden and it will be newel newell rubbermaid, jarden at that point. >> nrj? >> yeah.

>> they have a lot of make up. >> for garbage cans. >> no, one of my favorite data points was the beauty index. >> they sell make up. >> they have a grab bag of stuff. >> tupperware sells make up t. brand confusion. >> i could see that. >> so you get it. >> you live in the world of make up. >> no longer print at all. >> you live in the world of make up. >> you don't write for us. >> i do but i don't consider it print. >> it's the same online and the physic physical. >> i was confused because we said that andrew and becky are out and mike santoli were out.

i thought you were not the guest host but an actual host because if you're an actual host you have to take the jacket off. >> i was wondering about that. >> and read teleprompter. but you're guest hosting at this point. leave the jacket on then. it looks great. beautiful. hair is just -- man. >> it's striking. >> all right. verizon cfo. verizon bought aol earlier this year for more than $4 billion. >> everyone will look at the market.

just bottom line. and consumer digital media. of course i was there for three years. not that it gave me insight but what it has going for it is the number of people that the sights touch every day. >> it is astounding to me that they haven't been able to make something of an asset that gathers so many odd balls and you're right. billion dollars in cash flow. there's value there and yahoo! shareholders are like -- i used to say the mets fans but now the cubs fans. >> it's really tough to be a non-growing tech business or internet business. nobody really kind of knows how to treat you. >> yeah. all right, don't call this deal dead yet. staples announcing it will challenge the proposed merger with office depot. the decision is based on a flawed analysis and miss understanding of the competitive landscape. >> i don't know if there's anything here that necessarily

is not this because home depot is having it. and in the midst of the press release. 5.7%. 538 is where the street is right now. so i'm not convinced that we're seeing anything new. it includes the benefit. the shares in that quarter bringing the total 2015 share or purchase to $7 billion. nothing really happening with the stock. we'll see and they talk about some of the strategic initiatives and targeted growth

as well as trying to drive future product activity but this looks kind of like they haven't said anything in changes in terms of the strategy. >> yeah. >> it's the 2015. and it summarizes it. >> but the new ceo there right. >> the apron. >> like frank. he was a great ceo. really brought that country back in a big way. chipotle shares getting hit this morning. the drop coming after boston college sent some of its students including member of the men's basketball team got sick after dining at the burrito chain. the chipotle in cleveland circle. i know exactly where that is. >> so do i. >> that's the one in question and it's been closed since the massachusetts department of health has been notified and is

working to determine if there is a link to the on going national outbreak of e.coli but doesn't sound like, you know, sometimes you see somebody else get sick, if 30 people get sick, you know, if they haven't connected it yet to the e.coli outbreak. you would think maybe it spread there to the cleveland circle outlet. >> what if it's not e.coli. >> that might be worse. >> you also have how many agencies are going to be involved now? you have every state board of health and that's where it gets to be very messy. the problem is its figuring out where it's going on and tracing it back. the market has been unwilling to give the company the benefit of the doubt the last couple of days. >> and that could be more than just sick. i think that people, it can be

fatal at times. but you're sick all the way through. no, i do. i think you really are sick. >> okay. okay. >> no, i do. >> about 24 hour thing. >> no. yeah. i think you need -- you can be hospitalized and probably are. in other food industry news, hopefully more positive, yum announcing it's cfo will leave in february. the departure comes as the country prepares to spin off it's china division. >> as we were talking about chipotle thinking about yum brands struggles in china. that layer of how much of it, we don't know what is going on there. were they somehow targeted by authorities over this and then supply chain in china is just -- managing in the united states is hard. china? >> among today's other stocks to watch, carl icahn raising his position in cheniere energy.

he now owns a 13.8% stake. >> and shares of outerwall down sharply this morning. the red sox segment has not met performance expectations. outerwall announcing the red box chief, in fact is leaving. stock is getting hammered. down 25%. >> not a great day yesterday. down another 48 points today. for awhile it looks like the u.s. equity markets deep from oil as long as it was stable in the low 40s. we were okay but people see 47 and they go oh my god. >> friday we were dealing at least for the indexes. you had a lot of people thinking somehow there was a floor being developed in crude and natural gas is what is really a free fall. the weather is not cooperating and starting to hear people talk about capitulation.

>> but also it's been a supply story and peel say no it's only supply but there's stuff out of china again. are we in a new step down in terms of -- do you see the yuan, how weak it is and reserves exiting. mark grant on -- he's able to talk about a lot of it. if we add demand into the supply situation, who knows. >> you have people talking about how there's almost not enough dollars in the world to buy oil. it's kind of like with the strong dollar, it is just not as easy even if you wanted to stock pile for example. >> i thought of it in a warped way which i do and that is that let's say that you believe the hydrocarbon are adding to global warming so if things warm up and you don't use as many of them which makes the price go down even more and it's almost like self-fulfilling. the warmer it gets the more you use. >> because it's cheaper. >> because it's cheaper. >> but you also need less of it.

but you drive more so that uses more. >> it just gets warmer and warmer and you don't need to heat anything so it's building up. and the stone age we never ran out of stones but doesn't look like we'll run out of hydrocarbons any time soon and i saw an estimate for, what is it? wind and, the other one -- i don't know if it's wind and solar but it's right now -- >> 1%? >> i don't think but i don't want to say it because the people that follow this closely get so mad if you -- the green types. but i thought it was rising to 2.5% by 2030. >> but we're not there yet. >> no, we're like -- i think we might be below 1% and even so -- anyone that thinks we'll be done with hydrocarbons in the next 15 years, it's just still too -- and then you can never, did you see him yesterday? he is going on the climate

change scene more than you can believe. apparently when he was governor, you know how he got from l.a. to sacramento and back every day? >> how. >> commuted on a jet. every day. it's like leo's five houses and yachts, you know? do what i say. not what i do. >> let's move on to political news. speaking of which. donald trump isn't backing down from his statement that muslims should not be allowed in the united states. overnight the republican presidential candidate urged supporters to throw racial profiling out the window in favor of national security. john harang gejoins us from was with more this morning. >> donald trump has almost lost his ability to shock the mitt c political world with things he says. the leading republican candidate first in a written statement and then at a rally last night said this. >> donald j. trump is calling for a total and complete

shutdown of muslims entering the united states until our country's representatives can figure out what is going on. [ applause ] >> we have no choice. we have no choice. >> now of course this is precisely the opposite of what president obama urged in his oval office address on sunday night so they came quickly. hillary clinton called it reprehenceable. jeb bush that's been struggling to get traction in the race said donald trump is unhinged but interestingly the two candidates that most hoped to pick up donald trump's supporters if he fades were tempered in their response. marco rubio said i disagree with donald trump's proposal. ted cruz said that is not my policy, guys. >> rand paul not that long ago

wanted to shutdown visas for individuals coming from what he called countries with jihadist issues. right? so not a religious frame work but geographic frame work in which he hopes to achieve something very similar, no? >> you're exactly right and he reiterated that in a statement yesterday. he got some criticism for trying to draft in behind donald trump's proposal but including from some libbertarians that supported him but it shows the intensity of feeling in the republican base that all the candidates are trying to figure out how they can capture as much of it as possible without alienating the rest of the population. >> the republicans, john, were in full feeding frenzy on the -- i think, almost the bipartisan disappointment from the president's speech and they were -- they really thought they

would be able to get some traction out of that. the entire news cycle shifted to dealing with this. >> exactly right, joe. he blew that out of the water. >> suddenly people are going -- i think people are going wow, maybe the president that said why is he talking about islamaphobia at this point. maybe that's why. we're prone to it here. >> the republican strategist and former chief of staff put out a tweet immediately after donald trump put his statement out and said he has entered into society territory. we have to save conservatism from him and that's the tone of some of the reaction on the right. >> you know conservatives, john and many are -- you know when they talk about the constitution it's almost with reverence and one is religious freedom so it immediately flies in the face of

that, you would think. >> donald trump is not thinking about courtrooms right now. he's thinking about ways to hold on to his support. in iowa there was a poll contradicted by other data but it showed ted cruz pulling ahead of donald trump in the state of iowa and some people made the connection between the statement trump issued and his attempt to hold on to his base in iowa. when a previous survey showed ben carson taking the lead he went after ben carson and some of this is the reactive nature of donald trump. >> is his friendship over with the donald at this point? >> chris christie came out and said this is what you get from people that don't know what they're talking about and don't pay attention to the law.

>> it's the hug in the downgrades. >> so just to go back -- people are waking up in america and a lot of reviewers are going to pick up the wall street journal and see this photo on the front page. this is the immigration photo from 2014 at the airport in chicago. and it's also on the front page of the new york times as well. so there's going to be a lot of thought. clearly trying to ban a religion is not within the frame work of the united states and the way we think. >> but it has some appeal to the people that donald trump is trying to hold and, you know, we haven't seen a candidate who is so aggressive about using the emotional imagery to hold them in quite this way and you mention joe the way he reacted

to christie. he has a hair trigger with his rivals and this is the most unpredictable kind of situation and remember we're just nine weeks from the new hampshire primary. 8 weeks from the iowa caucuses and there's a lot of fluidity in this field. trump lead for a long time but people are looking at this certainly in iowa and new hampshire and saying when do i lock down my choices? not quite now but not good for the republican party. we'll see whether it's good for trump. >> well i hope all of our guys -- hopefully the nsa is still doing a few things. god forbid anything else happen. i hope we're right on top of everything that's going on in this country right now because as you say we're at this point already, i mean, if -- hopefully we're going to catch anyone that's planning anything in the future and you figure they are,

right, john? how many things do you think the president sees every day of plots being monitored or foiled? >> question only hope they're doing that. that's what the president said in his address. it certainly has revived the energy among those who favor a more aggressive posture on surveillance and intelligence gathering and all of that. rand paul's position is on the offensive. interesting interestingly dick chaney condemned trump adds well. in the wake of 9-11 the former vice president said what trump has articulated was contrary to everything we believe in. >> good to see you this morning, john, thank you so much. >> you bet. >> coming up, u.s. equity futures are trading lower this morning. first as we head to break, here's a look back at this date in history. a number. every auto insurances

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welcome back. wells fargo senior economist and king replacing larry king and he usually wears a blue shirt and the contrast is unbelievable. yeah. i wasn't looking down.

we'll be with you in a second. he wears those. because it's a way of saying hey, i'm here. talk to me but we're going to talk to the equity guy first. one of your contentions is the employment picture has gotten so strong that the fed is able to do this now. it almost looked like friday, like market participants said i know they're going to do it. maybe it's for a good reason. maybe the economy is strong enough for us to embrace this good news as good news. but friday is that what happened? market players saying the punch bowl is getting taken away but i'm okay because it's for a good reason? >> yeah i think there's an alignment between what the fed is going to do, what the market is ready for them to do. the unemployment side so that's good. there's a lot of confusion about what they would do and whether that was a good thing or a bad thing so that's a positive i'd say. >> yesterday, though, like so many times over the past year as we're stuck right at 177 we have

done nothing in 2015. back on oil maybe yesterday with growth concerns globally. what's going to make 2016 a better year than 2015 from the stock market given that we're still going to be watching and questioning what the fed's next move is going to be as they move back toward normalization? >> their path will be important and i think the ability of oil to drag down the economy is going to be on people's mines. >> shouldn't be dragging down the economy. ought to be helping the economy. >> that does not translate yet. that myth did not pan out i'd say. >> isn't it a huge tax cut for everybody that uses energy? >> you would think that discreti discretionary spending would improve but it hasn't translated either because you're seeing a higher level of savings or you're seeing a lack of consumer confidence. those numbers are much lower than other recoveries. >> you figured that out yet? >> well, they spent less on energy than any other time we

had an oil bust. so in other words you wouldn't have this huge obligation that everyone had in every household that was all of a sudden getting cut back. >> why isn't that great? >> it is great. but we started out that way. it's a very small expanse relative to income for most people and didn't become a huge tax break. it became a marginal one. >> gasoline prices. >> you feel it but 1974 was much bigger. >> in terms of the percentage on a day-to-day basis. >> but all the industrial numbers that suffered and the manufacturing recession, people are calling it, who knows how much oil and gas is after that. >> can you explain it, mark? >> well i think it may be a little more nuisanced. i think the folks that benefit the most from lower gas prices is really middle america and they're getting squeezed. they have gotten crushed and they have only recently begun to benefit from the improvement in the employment picture. it was only a few months agatha

employment finally recovered the net losses from the recession and even today we only have 600,000 -- about 600,000 more full time workers today than we did back in december of 2007. so if you're not driving to work each day, you're not going to save a whole lot of money on gasoline. >> so for next year you're down -- what type of gdp forecast and you're not a stock guy but is it going to be enough to give us a kind of profit increases we need for the market to get out of the mud here? >> it's going to be tough. we're looking for a repeat of 2013 in terms of 2.4%. you have the dollar should still strengthen because the fed is certainly going to titan. we have seen the euro get a little bit of aed by here because the ecb didn't go as aggressively and it said maybe the fed is going to be one and done. it's going to sink in that the fed has a lot more work to do

and it's only to raise rates. not every meeting but maybe every other meeting in 2016 and the ecb is going to ease a little bit further so i think that the combination of low energy prices, the stronger dollar, they're both good for the u.s. economy in the long run but boy they create a lot of head winds in the very near term. >> if you were just to come in here and not without any history of what had happened and you just gave stock player the details of where interest rates are, where inflation is and what alternatives are yielding and everything else, you'll say it looks like a really good time for the stock market. >> i would say. i could say the santa claus rally has been heavily anticipated. this year so far you've seen investors pile in as the market moves sideways a little bit. >> renamed it the generic december holiday rally. >> that's right. the seasonal rally. >> if you can get on board. >> yes.

absolutely. >> safe zone. >> yeah, right. the safe space. so yeah. understood. but i would just, you know, for folk who is are feeling a little put out by the action we have seen lately, on that kind of seasonal rally i would mention that -- >> i'm talking next year. it's a good time for stocks. why historically where rates are, where inflation is, the rest of the world. >> i think you're there. >> are valuations too high for us to make further progress? >> i don't think so. i think that presuming with the dollar and energy headwind probably being largely behind us you'll get descent earnings growth next year. probably not much multiple change in the market but you'll probably have a good chance at getting. >> you need earnings growth. >> you'll get some growth. >> you're not an anchor. you're still a guest host. you're allowed to express your opinions. next year you'll be double digits. >> there's a shot. but not even because earnings go

up. we had a period where earnings went up more than stocks did than we had the multiple expand in 2013 and now we're working that off. it could go either way. the biggest issue is the profit cycle is so far along at the moment the fed is tightening. >> the yield curve flattening. >> in a lot of respects the credit markets are not cooperating. >> they're giving us, not bad met messages but weak messages. >> what's with your own money. >> i'm always invested but, you know, i am concerned about this drop in the isl. i mean, the stock market performance, the dow is big blue chip stocks and you have the ism index dropping below 50. that's a little different for the start of a fed tightening cycle and that is a bit of a headwind for the stock market but overall i think that 2016 is

going to be the year that lower energy prices do finally provide more benefit for the u.s. economy than they do cost but that got tested a little bit yesterday. >> thanks, mark. >> thanks. >> coming up toll brothers posting earnings below wall street expectations this morning but the homebuilder ceo is striking an upbeat tone for 2016. we'll raise the roof on the stock with an analyst next. first though a look at yesterday's s&p 500 winners and losers. this holiday season, get ready for mystery. what's in the trunk? nothing. romance. 18 inch alloys.

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>> welcome back. nike and lebron james to keep their partnership going for a long time. the deal provides significant value to its business it's brand and shareholders. it goes on to say that they built a strong lebron business over the last 12 years and sees they continue to grow an it's the first time nike has given the deal to an athlete. it will be the largest guaranteed contract in the company's 44 year history. i need to know the terms. the terms were not released. but you figure he's young and a number that sounds really big right now, 10, 15, 20 years from

now -- >> might not be. >> especially with inflation. >> nike is pretty smart. >> participation in his brand of products or whatever over the course of time. how his shoes sales. >> don't they still sell a bunch of air jordan. how old is michael. >> sure. >> and you know what -- >> he's young but he's not basketball young. he'll be 31. >> how old is michael? and they're still selling air jordans. so all the basketball stars that have come and gone since michael jordan. >> we were discussing what a powerful brand air jordan is until this day. >> i even know the logo and it's not phil anymore but you have kevin plank just signing jordan spieth, 17-year-olds old. so good time to be an athlete. >> din ran a rerun of the

dogfight over kevin durant with under armor last year. >> and under armour has seth curry. have they lost yet? unbelievable. we have to merge the 76ers and the warriors and then they hit 500. >> m&a. >> all right. >> toll brothers out with quarterly results early this morning. earnings fell short of consensus but the luxury home builder reporting it sold more homes at higher prices. joining us with his insights is the senior home builder analyst at citi. >> thanks for having me. >> what happened with margins or have they not made as much money? >> it's pretty in line. when we reflect on the fact that 3rd quarter most of the builders traded off by 10%. particularly on the calendar.

everybody is worried about the fact that they came close given the hay boar conditions we have right now. it's not about current. >> very positive comments about the coming year. no sense of warning when it comes to the statements in the press release. >> overall when you take a step back we're still under producing hom homes. what it comes down to is its once you go from 2 million housing starts to 600,000 the supply chain takes awhile to heal. >> and how do we view this cycle in that context? where can it get to ultimately? what's going to be normal and how do you treat the stock? >> can i give you numbers to that question? the executive chairman says housing starts are about 1.1 million in 2015. historically going back to 1970 they're supposed to be 1.6 million so we're about 30% short at this point.

>> yeah. except we got to 2.5. >> okay. but when you smooth it out. >> we're at 700 k and probably 1-1 when you think about historically. i guess the key thing i would think about is other conditions are a key driver. 760 is the average today. that cuts relative to where we were in the 90s where 700 was the average mortgage credit score. so basically cutoff 25% of the population to get a mortgage. >> so if we bring up the five or ten year chart it's dead money. >> does anything cause it to break out or do you have to wait for conditions to improve. >> it's more macro driven. people were not worried about rates until about four days ago. >> you see that for the last four years. it's a little bit of game.

>> it's massively outperformed. they're up by roughly at least ten points. everyone's exposure the first time home buyer. >> okay. thanks. >> thank you. >> all right. coming up, new details on the san bernardino killers and what's being done to avoid another deadly terror attack. stay tuned. squawk box will be right back.

today people are coming out to the nation's capital to support an important cause that can change the way you live for years to come. how can you help? by giving a little more, to yourself. i am running for my future. people sometimes forget to help themselves. the cause is retirement, and today thousands of people came to race for retirement and pledge to save an additional one percent of their income. if we all do that we can all win. prudential bring your challenges® the fbi is saying that the san bernardino shooters assailants had been radicalized for sometime and had methodically prepared for this attack. here to take us through the

process of radicalization is the deputy director on the program of extremism at george washington university center for cyber and homeland security. good to have you here. >> thanks for having me. >> i don't know if you've seen the papers, wall street journal running the photo of their arrival of immigration at chicago o'hare in 2014. you have done something pretty unique from what i can tell. the center for extremism. you looked at all 71 individuals in the united states that have been arrested in connection with being supporters of isis. this is before the situation happened in san bernardino and you have a lot of information about individuals in the u.s., many of whom are american and who have been radicalized. first, the 71 people, what are they like? is there any kind of key demographic trend? do they match these individuals in anyway? >> that's the biggest takeaway from the report is there's a spectrum in terms of the profile of people. there's no one profile.

the average age is 26 but they tended to be mail. the vast majority were u.s. citizens. arrested in 21 different states although there's 900 active investigations in all 50 states. >> what about religious affiliation. >> so 40% of them were converts to islam which is a higher percentage than the general population of american muslims but we saw people that were just converted to islam and people steeped in the faith. >> so one individual who is from new jersey or staten island half dominican, half jewish. >> right. we have seen catholics, jewish. it runs the spectrum with their conversion in terms of the new jersey case, that was a cluster. similar to the group dynamics it was an eco chamber where they only wanted to hear what they wanted to hear and didn't allow outciders to provide voices. >> twitter is the preferred

method of communication in terms of other methods of social media. why is that? >> yeah. i think it's easy to use and again the demographic trends seem to be younger and it makes sense that isis recruits and spotters are on twitter so they're constantly pushing out the propaganda and we looked at 300 people we believed to be american isis supporters online so they were pushing to groom people into the radicalization process but also to provide support and to be travel agents and help people cross the border and provide step by step guides of what to do when you get to customs. >> when we looked at some of the individuals in paris and they try to describe what should cause someone to join up into something as horrific as that and they talk about the disenfranchisement and almost joining a brotherhood sort of and i think the point you're making here, i don't think any

of these people that converted, they didn't convert to islam. they converted to radicalism. they don't two to islam and say i'm looking for something in my life. this religion. i'm going to get closer to god with this religion and suddenly they become more radical. there's something missing and they're converting to radicalism and not islam. >> that's absolutely correct. there's a distinct difference between islam which is practiced by millions of americans in this country and billions around the world and islamist ideology and it has its own world on these type of things. >> it's own appeal to people. >> and we don't have that conversation about these type of things in this country. we tend to go through, you know, either the right or left and not have a conversation about what it actually means to have this ideology that is distinctly different from a religion. >> so it's true that we're with on the front pages of the papers

across the country today. what are you thinking? what do you want to know about them? what can you tell us about them based on what you read about them that you think would be insightful. >> what will be most interesting is when they start looking through media exploitation and do they have a level of contracts in terms of was this isis directed? it's probably more likely to be isis inspired which you have seen in the past but who are they reaching out to online? that will get you a sense of, you know, their level of support in the organization. >> all right. thank you so much. anybody that wants to go to their website you can see a lot of the illegal documentation behind the different cases brought forth in the united states. >> still to come on squawk box, former white house chief of staff bill daily will be here. we're going to talk about the day's top stories from washington to wall street. he also may have comments on the city of chicago. but first a quick check of what's happening in the european markets right now.

travelers crowd the sky this holiday season, they predict 45 million customers fly in a 19 day period from before christmas to after new year's day. we have the best and cheapest ways to get around the holidays.

the points guy, brian kelly, notre dame needs points against ohio. >> right? >> ohio state? that's not fair. how did they -- you know, the horrible thing happened with stanford, and then they got to go play ohio state. that's -- you're not the brian kelly. >> not that brian kelly. >> from "fast money." >> i interviewed with him before, but i'm not him. >> totally different. so we talked, andrew is not here. he's a genius with frequent flier miles, and what we finally decided -- you are too? >> oh, yeah. >> what we decided the value is approximately a penny a mile. is that about what you should get for -- >> at a baseline. think about getting credit card points, you need 2 cents a mile because they are cash cards giving 2% back. take two pennies rather than trying to get one penny in the value of air fare, you know what i mean? you earn miles for everything these days. >> the only thing that are

valuable for getting in the front of a plane, somehow, which is, other people use them to actually fly, right, get a ticket? >> well, it just depends. airlines these days limit upgrade space making you buy the full fund economy ticket and wait. can you imagine paying triple the price of the the coach ticket, get an upgrade, it does not come through, and you sit in coach. >> then you use miles -- small amount. >> what's happening with the business class upgrades, they sell the seats. airlines invested billions into the product. people pay for it. they are not releasing instant upgrade space. in the recession, it was easy to snag upgrades, but today it's harder. >> all right. we have a lot of things that people should probably do. what's this thing you can get in case you don't have, like, elite status or something? something you can do so you don't get, like, if you get cancel or you could have the -- what's your -- >> if you don't have elite

status, having an airline credit card flying airlines saves you. annual fees under a hundred buck, and feeings airlines charge these days, use those airline perks once, and it easily pays for it. lounge access, airline lounges are not glamorous in the u.s., but if your flight is cancelled, agents at the lounge are generally the most seasoned agents and rebook you rather than waiting in a line to get rebook. head straight to the lounge, and if you don't have access, paying 50 bucks to get in, save hours of your time by getting rebooked before the last few seats are begin to other people. >> what other tips for these days? >> you know, the precheck is a god send for frequent travelers, buzz through. i get through under three minutes, keep the shoes on, but if you fly were global entry, a government program that helps you also get through when you come into the country, that includes tsa precheck, a hundred

bucks, ton of credit cards rebate you. it's about the perks. there's perks, but you need to maximize them. >> can you knit this together and make a hub of all your affiliations and reward point. >> like an app? >> something. >> yeah. there's a lot out there. the points, we teach people how to maximize, but at the end of the day, be your own advocate. you need to know what the credit card perks are. you know, these elite programs change. all the airlines change to revenue based, you know, instead of how far you fly, it's about how you spend. >> mile is not a mile anymore. there's miles you accumulate and miles that matter to achieve elite status that are much more controlled. >> exactly. united and delta have revenue requirements, not just a frequent flier, but a frequent spender. they are switching to revenue based in redeemable miles. >> somebody who is an incredibly frequent flier, i -- this is

going to sound awful -- i wish they were more judicious about who gets in the express lines. i've seen the elite line look longer than the regular line. >> totally. >> because everybody's elite. it's like, you know, tee ball, everybody gets a trophy. >> it's great when it runs correctly, and people have no idea, taking shoes off, you pull your hair out. elite travelers have not earned it, so to comb through the ranks of the actual, you know, tried and true travelers, may not be a bad thing. >> you spent a lot of time investing, sometimes money, because it's expensive. it was expensive to get global entry, and then you get there, and you built in a expectation of how much times it takes to get to the operate. >> at laguardia, they don't manage it, but they allege they'll get better. this morning's top stories, and bill daly. thanks. proud of you, son. ge! a manufacturer.

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it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. while you're watching this, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us?

♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? donald trump calls for a total and complete shut down an muslims entering the united states. >> you have no choice. we have no choice. >> the response from his rivals and reaction this morning from pra president obama's former chief of staff straight ahead. kcustomers in boston sick a a restaurant, and the stock down 30% in three months following a outbreak of e.coli linked to the chain. oil prices near seven year lows, and they have been bearish on crude all year. get the latest call.

as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." leaving the lights on. welcome back to "squawk box" here on cnbc, first in business worldwide. becky and andrew are off today. sitting in with us is mike, cnbc senior market commentator, great commentator, reads well, and i don't see why we don't just zicsink or swim with the tell prompter. you're here. nebulous whether you're a guest host or anchor. >> battlefield commission. >> you want to read this? >> no. >> when we get to the end of the block, you take us out.

all right? >> let me show you how it's done. [ laughter ] >> among the stories this hour, announcement there's a global advisory board with familiar names. former fed chairman ben bernanke chairs the board, and chipotle hit this morning after boston college said students, including members of the men's basketball team got sick after dining at the burrito chain. the cleveland circle location, where the students ate, has since been closed. the massachusetts department of health is working to determine if there's a link to the ongoing national outbreak of e.coli. breaking this morning, antitrust regulators in europe charged qualc qualcomm with using market powerings, accused of illegally paying a customer for exclusively using its chip sets.

in a statement, they said sales practices have complied with the u.s. kcompetition law, and they face a similar accusation in taiwan. shares at this hour lower in premarket trading by nearly 1%. >> gop presidential candidate, in case you missed it, trump, calling for a shut down of muslims entering the united states. >> donald j. trump is calling for a total and complete shut down of muslims entering the united states until our country's representatives can figure out what the hell is going on. we have no choice. we have no choice. >> this was denounced by republicans and democratic candidates. joins us now, bill daly, head of u.s. operations and former white

house chief of staff under president obama. he also served as commerce secretary under president clinton and related to dalys from chicago somehow? >> a couple mayors. >> there's a lot of different areas of expertise, a lot of different hats you've worn. you're a renaissance man, that's how i describe you. >> that's the first time that's been used. i like that, to be frank with you, joe. beats like hack or just a banerr or whatever. >> i think about -- you probably are glad, and it's difficult with everything happening. >> the difficulty is chief of staff is anything that comes in the oval office is usually bad. nothing good comes in there, and the last 12 years, we've been at war as a nation, and so it's a

tough time for the nation. it's a tough time for the world. a lot of difficult things going on, obviously, in this country and the rest of the world. i don't envy anyone. it's the tough job. >> as you've been watching, you know, president finally did have to address what's happening, and i think even some in the own party you said you're maybe miscalculating the amount of fear and trepidation in the country in this, and maybe not business of usual, but staying the course with the strategy so far, saying there's a setback. would you have advised to do something earlier? >> i don't know about earlier, because of a tragedy like san bernardino. >> or paris. >> that was not on our soil. he spoke, came out right after paris or right after the incident in paris --

>> what about climate change. >> i'm talking about that evening, friday evening, came out in the white house on live on this channel, and everywhere else, but after san bernardino was a different situation. i think it was hyped. he, obviously, doesn't do many speeches from the oval office so when you hype something that large and you do it on a sunday night, you better have something to say that's different and possibly aggressive. >> i'm going to be gentle. >> you don't have to be. you never are. >> politics is dirty. it's just hard to watch. i think everybody has an agenda, and they use things that happen to further their agenda, but there's been times in the past where some of our presidents have seem to rise above a lot when something happens, and not use it for political expediency. when you saw the president and

hillary clinton and harry reid before we knew anything about san bernardino, when the first reaction was to push the gun control agenda again and miss the terrorist component, which a lot of people -- >> look, the gun issue is a very difficult issue. those believe strongly there's no limits, but the one consistent thing in each of the tragedies whether it's a terrorist, mental illness, whatever, and any of the mass shootings is there is a gun involved. there's a the only common dm denominator. it's not? what is it? >> pipe bombs, people who -- >> mass shootings. >> they involve guns. >> yeah. >> there was a guy stabbed in the tube, someone saying remember syria. there's a prepaerpetrator wantio do harm to people. thank god someone is there to stop the perpetrator at time

with a firearm. >> nine out of ten times, there's more than that, there's a law enforcement person, not a citizen who is carrying a weapon. >> the county building was a soft target, no guns in san bernardino. >> every buildings is a soft target unless you arm yourself. this building has security so it's not as soft as most buildings would be, and there's a reason you have security here. >> then your answer is that when something happens, and every time there's any involvement -- that's the first response with departments, do somebody with give ups. gun sales are in new highs, smith and wes son -- >> i'm not saying that's the solution. obviously, it's not worked because the body politic in the congress has not responded to that. there's a different argument to be made other than just guns. >> it's the first reaction, this tragedy happen, and the first

reaction is political instead of speaking to the core concern. do we have terrorists amongst us, and what do we do about it? why are you looking perplexed. >> there's no question there's terrorists amongst us. no question. >> home grown terrorism. >> there's people in the country who also commit mass shootings. they do. that's -- probably there are more examples of that then terrorists amongst us, at least as far as, at this point, thank god, in the mass shootings or killings that occurred in the country. they are less about terrorists, to this point, then it's been about for other reasons. >> in san bernardino, there was a time he said -- well, there's no parallel to this anywhere else. in paris, he said there's no parallel in the united states to what happened. he stood in paris where it just happened with ak-47s, with weapons banned in paris. >> the gun issue is not going to

be solved around whether or not terrorists are in the country. you're knot going to -- that's a separate discussion. i believe it should happen. >> that's his point. that's the point. the gun discussion should be a separate discussion from the issue of terrorism in the united states. >> forget terrorism for the moment. when there's a mass shooting, newtown, that was not terrorism, but is it legitimate to talk about guns then, or do you believe that you shouldn't talk about guns? >> sure, you can talk about guns then, but san bernardino raised the question of whether or not we are now going to -- what many long feared, soft targets across the united states, we're not israel, we're not egypt, there's knot metal detectors everywhere. they moved from big demonstrative things in the united states like 9/11 to smaller places where everyone, everyone can be susceptible at any time. >> yes. >> what do you do about individuals who have become radicalized? >> well, obviously, you got to -- it's a very, very difficult -- what's the answer? i don't know. is taking guns away totally the

answer? sho absolutely not. there's no question. even if you try to take everyone's guns away, with 300 million guns whatever there are in america, it's knot going to happen. >> you think fewer guns makes more sense than no guns right now if this becomes -- >> law enforcement will say that. most law enforcement will say that. they don't -- >> off duty cops in stadiums should bring their firearms. there's places that -- >> yeah. i think a lot of police officers carry guns with them. not every -- law enforcement person, whether on duty or off duty is trained. he sees a need. or she does. if they are trained, sure. it's not about doing away with guns. i'm not advocating that. >> if you were rob emanual now, delegating authority, pick the best guy you can, does this rise

to him, some of the problems? >> they all rise to him. it's a difficult situation. racially, obviously, in the city, and you've seen it in this city and others. when you have such incidence that are indefensible, the shooting of this young man, and you see the video. >> the coverup was not great. >> i think the handling of it, obviously, horrendous, and knowing something about mayors and difficulty of being a mayor, watching my father and brother over the many years, it's a tough job. he'll survive, but it's a difficult period to be a mayor in a big city with the race issues and with the new world we're in with everything videoed. everything. for good or bad. i mean, people were criticizing that the police released the video of michael brown in ferguson, and those same people say, you know, release every video, but you shouldn't have released that one. it's a difficult situation to be mayor. >> what about trump's call to

ban all muslims from the united states. >> nothing surprises me on donald trump. it's ridiculous. it harms our country. it harms who we are. how we are viewed around the world, but he's in a political fight, and he's trying to get the votes that he can, and that's all it is. he's extreme with his statements. i also think anyone who refers to themselves in the third person has got a little issue, and he does that quite often. >> joe wants to ask you about -- oh -- >> well, you just confirmed what i said. >> exactly. you've had some great -- you have public policy jobs, but you had good private sector jobs too. >> yeah. >> some experience does not translate to government always, but -- >> well, a lot. >> that's a throw away shot. >> yeah. >> but the democratic party, they got to do it? this is posturing, pre-election,

elizabeth warren side of things, hillary clinton picks a different industry every day. >> in the primary process, it's in every cycle. saw it with romney. trump's statement was appealing right than the center or left, and the primary, you go through that. the question is whether you're able to avoid going too far so you can come back in the middle. politics is a game of addition, not subtraction. >> if you were advising hillary clinton right now, wouldn't you say, look, you've got this. you don't need to -- >> concentrate on the general election, no question about it. >> moving center? >> i think she is more center than you think she is. no question about it. >> i'd love her to say that. >> yeah. maybe she will. >> no. i'd like her to say it anywhere. >> she said that -- no one's going to say that. that's silly. >> it might help. >> well, she said three months ago, i'm a moderate. they asked her a question.

i'm a moderate. i think -- >> you said that too off camera today, remember? >> yeah, rierght. >> you say that, but watch her career, and i would say she's more moderate than most people think. than democrats. >> people can change. >> not the core values, core beli beliefs. >> okay. rich talking about hillary. >> yeah. >> thank you, again. >> thanks, joe. >> it's okay, right? >> i like you. >> you do? i like you too. all right. i've always said, you know -- >> you have a great show. >> look inside yourself, i leave the lights on for you. if you ever want to come home, the lights are on. thank you. coming up, worried about drivers on the road texting while driving, there's bigger problems. a survey shows they are surfing the web while driving. phil lebeau has details next, and then mark grant here on equities and dollar when the fed hikes interest ratings. oil plummets after the meeting

friday, and bearish on oil prices all year, the new forecast straight ahead, and take a look at u.s. equity futures at this hour. it's a negative open. big negative. sure, tv has evolved over the years.

it's gotten squarer. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv.

welcome back "squawk box." futures right now are down. down, down, down, down. down yesterday. nice day on friday. seems well, well in the past. a lot of angst around oil, around the world that we're living in right now, around china, as a result, it's going to be at least start out as a tough session for the s&p, which is down 13, and nasdaq down 26. canadian pacific revising the offer for norfolk southern, and in the letter, it says the new bid dramatically reduces risk for shareholders. canadian pacific says the offer puts cash in shareholders' hands earlier. >> reducing the regulatory issue, is they are going to

close the transaction into a voting trust. >> huh. >> i don't know what that accomplishes. >> exactly. >> that's where a bunch of shares are voted by a block by a trustee, but i don't know how that shelters it. >> saying done by lead work by the council, this allows them to close the deal. >> this is going to be a two year process of closing the deal, probably, when you get through the regulatory reviews. >> if they say, we close by may 1, 2016, that's a dramatically shorter period? >> closing pending the final approvals. >> got it. all right. by now, you should know texting and drives is dangerous, but state farm has a survey that shows people surf the web while behind the wheel. how is this possible, phil? i can't imagine. >> well, you're not supposed to be driving while holding one of these, but people do it, michelle. we see it all the time when we drive, and because these have

more capability like going on the internet, people are doing that. this is what drivers admit to doing while driving. 36% text, up slightly from last year, but more than double number of people saying they want to surf the web or they do surf the web. in other words, 13% last year, and now 29 percent, and 19% take a picture with their phone, and 10% set up recording and do a recording of a video while driving. here's state farm explaining why people might believe all actions are still doable behind the wheel. >> it could be that people are bored or they perceive they have an attention span available. what they said in the survey is they are most likely to text at an intersection when stopped at the red light, which seems fine, but federal data says 40% of

crashes happen at intersections. just because they are stopped doesn't mean there are not demands on their attention. >> the recent data from the highway safety administration says the total number of vehicle deaths or accidents that caused a death, a little over 32,000. drunk driving was responsible for 10,000, distracted driving was in the 3200 range, that's how many are killed linked with distracted driving, and most of the deaths, it's the driver doing the texting, whatever it might be on the phone, but there's other people killed in distracted driving accidents, all raising to question, what happens when semiautonomous vehicles, around the corner, and fully autonomous vehicles hit the road? we've driven a number of these, and i say the same thing over and over, and at some point, the fascination with your car

controlling where you are going, how fast you go, the braking, that goes away, and you say, i'm bored. what do i do? most people believe that we will see even more texting behind the wheel, and that concerns regulators because they believe that you should be paying attention although your car is steering, comming the speed, et cetera. it's not going way, guys, any time soon. >> i thought that would solve it. >> yeah, me too. and solve the drunk driving too. there's a designated driver wherever you go. >> only, joe, if you believe we'll have all vehicles on the road fully autonomous. that's not going to happen at least until 2030, 2035. you have to get all the other vehicles on the road, a quarter million of them, you have to get all of those off the road, or not a quarter million, but a quarter billion vehicles in the u.s., so i mean, it's going to take years. even after the technology is around. >> it's a problem. god bless at&t, that is a good

campaign. don't. wait. what's important? you never used to do this. you don't need to do this. it's stupid. there are times where, you know, i drive by people, i get so mad. i'm telling them, you know, i probably shouldn't do that, but get off the phone. i go like this. you know, when they are on that or looking at it, whatever. >> and they know. joe, they know. the survey shows that people know the rules. >> if you are going 50 miles per hour, you travel a hundred feet in the blink of an eye. it's not good. think about what could happen, kids, things like that, bicycles. it's bad. >> thanks, phil. >> you bet. coming up, "squawk box" sport news, a deal for james, and finalist for college football's heisman trophy.

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nike signed lebron james to the deal of a lifetime, specifically, yes, a lifetime sponsorship partnership. in a statement, nike said it, quote, filled a strong lebron business over 12 years, and sees potential for this to grow over his playing career and beyond. it's the first time nike officially given a lifetime deal to an athlete, the largest single guaranteed contract in

the company's 44 year history, although, we have to take their word for it because terms were not released. in the field of candidates for college football's heisman trophy narrowed to three, the finalists for the most outstanding college football players are alabama running back, henry, mccaffrey, who my daughter just, i don't know, have you seen the guy? >> is he cute? >> yes. goes to stanford -- >> perfect. >> had 400 total yards, and he's -- do you know? >> he's not imposing physically. >> and then clemson quarterback, watson, all invited to new york on december 12th, and it used to be running backs, but now it's quarterbacks. >> two here. >> yeah. >> you don't ask me my thuts.

>> i don't. don't feel bad. >> i wouldn't ask andrew artery. >> i wonder about the long term cycle whether it's swinging back to running back. the nfl is skewed against them, really. >> thought the oklahoma guys should be there too. what's his name? baker? not baker -- yeah, two great games. okay. oblong ball. i don't know. >> it's brown. >> you think football is soccer. you're international. >> well, i will say american football. >> do you really? >> when i'm overseas. american or european, yeah. >> you want to read this? >> you want to try it? you can do it. >> huh? >> they told you? >> i believe it. i would believe it. >> it's not true. >> you could excel in that chair. preparing for liftoff, mark grant from hilltop securities

telling us what stocks and what's going to happen to them, income, the dollar, going to tell us what's beginning to happen to all of them after the get hikes interest rates as we head to break. look at u.s. equity futures. yuck. a lot of red.

welcome back to "squawk box" on cnbc, first in business word wide. among stories front and center, shares of miners hit hard, among the reasons, weakness in oil and metal prices and negative chinese economic data. dropping to the lowest level since mid-2009, a decline of 7% in premarket trade. carl icahn raising his position since august. the activist investor holds a 13.8% stake. if he liked in august, he'll like it now in december after it

fell so far, right? >> reporter: placing betting on rising interest rates, gearing up for the fed's hike, which is expected. net wagers, the u.s. treasury futures will fall by more than $26 billion, the most since 1993. the ten year right now, i saw around nothing that exciting happening, 220, and joining us now, mark grant, managing director and chief income strategist at hilltop securities. i don't know. here's what i would have done. you're a worry wart. always have been. always a lot to worry about. lately, some of your musings that i've seen involve things in china, reserves are going out of the country faster than you can say, i don't know what -- i mean, not going to say anything. the yuan costs a lot of money to keep it where it is and likes to go lower, hurting a lot of emerging market currencies, but one of the big things i referenced to you earlier before

san bernardino, it's a matter of time. i think you almost said weeks before this something happens here, most likely, and then it did, and i think you think that that's not the last thing that's going to happen. as a result, there could come a world where anything with risk, people are more risk averse, and you are warning a lot of clients to be at least prepared for the risk off trade in a big way and to do something about it. >> well, as you know, all year, and i do worry, i'm concerned. i look at preservation of capital as the first rule out there, and through the tenth rule, and so the stock market this year has gone nowhere. nowhe nowhere. zero. all the guys that showed up talking to you and michelle and all of you, the target's going up 5%, 10%, everybody's been wrong. >> right. >> the ten year treasury's gone nowhere. it started the year at 217,

we're at 220 at the moment. three steps, two back. what's the play of the year? taxable munis, closed in bond funds, get the yield, get -- >> short oil. >> well, if you wanted too the speculation trade, that's been the best -- >> long the dollar, short the euro. >> dollar's going back up again as soon as yellen -- >> really? >> yeah. going back to the parody, and it comes either because after the feds' announcement or after because it was a game draghi played, after what the fed does, draghi expands qe again. >> do you think the world is more dangerous right now, and, therefore, you should not be in the stock market based on terrorism or not? >> i think terrorism is going

to, unfortunately, there's no joy in saying this, but terrorism is going to be a more frequent part of our lives because of what these people are doing. >> in a hideous -- in a perverse way, it's a buying opportunity every time it happens up to this point. >> well, it hasn't always been if you go back far enough, but recently it was because then people think it's contained, right? it's like a stock when you think, okay, earnings are not as good, but here's what the expectations were, right? the expectation has been it's going to be contained. you start having more with things happening in san bernardino or what happened in paris, there's going to be a change of mentality, consensus view. >> the stock market went straight up in the 50s and 60s. i don't know that the market focuses in on the risk to individual lives, believe it or not, as callous as that sounds. >> it's a different mentality talking about two nations facing

off versus something in san bernardino that has to do with people and their safety. >> ultimately, it doesn't lead to a change in consumer behavior or a permanent shift in the way americans move or what they do. is that perhaps the transmission mechanism you're watching for to see if, ultimately, that spreads to some kind of an effect on the stock market? >> yes. it's like you being frightened to go or take your kid to the, you know, to the mall or something like this or walk down the street, and every's aware and looking around themselves more than they used to, and you're waiting to see -- you're not hoping for this, for gosh sakes, i'm not hoping for terrorism in any way, shape, or form. >> does it matter who's in the white house and whether you think we're going to deal with this more effectively? i mean, is this kind of a commentary on that we're not doing enough now that the president should be doing more? >> my own opinion is yes.

the president should be doing more. the current administration should be doing more. >> to go directly where they are? >> well, i think we have to be monitoring -- i don't believe -- i mean, i don't agree with what trump cesaid yesterday. if trump would have said we have to be cautious about the people coming in from syria and iran and iraq, i'm good with that. >> right. >> but i certainly am not good basing it upon some kind of religious issue. >> europe is more vulnerable than we are right now. >> way more. >> so many home grown, coming and going as they want and come back in because they are nationals. >> they have the european passport gets them anywhere. >> we can't stay i understandlatunderstand la -- insulated, and if they are not -- you know, it's the lowest common denominator. if they are not ready, that affects us with risk trades too,

probably. >> mrs. merkel made a mistake letting all these people in because x percent, half of 1% are bad people, terrorists, whatever you want to say, they got a real problem, so what happens the first time a church is blown up in germany? what happens if something happened in belgium in they found it first, so it didn't. the other thing that disturbing me is the french incident, unlike the "charlie hebdo" incident, aimed at specific targets, now it's random shootings in restaurants all over paris. i mean, you got to be concerned about that. you have to be cautious about that. i think not in terms of political sense, but in terms of what it's going to do to the market, the equity in the debt market and how people respond to that. >> all right. that's at least a caution flag. >> caution flag. >> all right. i will update our viewers as they get stuff from you over the transit.

is that how you say it? >> yes. >> is that good? >> came in with the mail. >> all right. thanks. >> thank you. thank you. coming up, oil prices trading near six and a half year lows, and information service joining us next, warning all year that oil was headed towards $30 a barrel, and tom's updated forecast straight ahead.

crude near seven year lows, and the fallout is huge for stocks. dom chu is crunching the numbers. >> look at crude oil prices, they are seeing quite a bit a slide here. year to date, we lost 31% for wti crude, now at 37 a barrel, and look at energy stocks within the s&p, they are huge under performers as well. the s&p marginally higher year to date, but s&p energy index down 22%. all of that is translating into massive market cap losses for the biggest company in the s&p 500 energy sector. look at the notable names, first of all, no surprise, exxon, the biggest of all out there, lost $71 billion in market cap year to date through yield's close according to the analyst in dow

jones indexes. meanwhile, a bright spot, valero gained $9 billion in market cap this year. a tale of two different oil companies. to sum it up, michelle, the s& sector lost market caps, all companies in the energy sector lost a total of nearly $360 billion. the moves in oil triggered a huge market value loss in the energy stocks. >> lots of money going to money heaven. thank you, dom. the next guest called for $30 in february. here to gloat is tom kloaza. good to have you here. >> hi, nice to be here. >> do you want to gloat? >> no. i don't want to gloat. i have to tell you, i don't think we're going to get to 30. we'll get there for some grades. right now, western canadian

crude, for example, is $24. my hunch is that probably wti's pretty close to a bottom, somewhere between the $32 in the great recession to where we are today. it's the final innings, i suppose. >> you show wti and brent, but there's so much oil in the world trading at different prices. when i covered russia more, you look at the price of urals, the venezuelan basket is particular to them. just an interesting point to make there's all kinds of different, sulfur context, different ability to transport, et cetera. >> like cabernets. as many grades of oil as cabernets. some are like a two buck chuck. for the canadians and venezuel n venezuela venezuelans, they have two buck chuck these days. they struggle more than the shale produce e and, certainly,

some of the producers of the light sweed crude. i have to mention you talk about refiner, and they'll do very, very well after a hard period here for about six or seven weeks because they've got the ability to run some of these medium and sour crudes trading at big differentials and discounts. we're seeing lows that go back before 2009 for some grades of crude. >> going back to wti, which is what we follow so much. it sounds like you think we're near a bottom at this point? how low could it go? >> i think we are. if there's a black swan event, devaluations or some other worldwide terrorism event that challenges travel, you could see prices briefly go into the 20s, but generally, if i were a better man, i bet we're somewhere between the december 2008 low and the 37 seen in august. >> why do you think that? >> i think production is dropping. it's declining in the united states. it's going to decline probably by about a half a million

barrels a day in the next six or so months. >> so that's bullish way to think about it. that's what puts in the bottom? >> a little. i think demand is going to rise and the market's going to rebalance, probably in the second half of 2016 and '17. this is a glut in terms of the most crude oil we've had in north america. measured against the population, it's not all together that much. we've had much more crude per population in previous decades. >> the last few months around 40, that chopped everybody up looking for the low. what does it look like? in other words, people say look back to 2008, it was a v. can we expect anything like that? have we been conditioned to think unrealistically it comes roaring back? >> no, it looks like an irregular electrocardiogram in how it comes back. i think that 40 and over more

realistic. i have to mention the first time we hit $40 was operation desert shield in 1990. we didn't hit it again for 14 years. i think this time we'll spend time below 40, but maybe 14 weeks, not 14 months. the future of crude oil is between $40-$60 a barrel. >> china? >> if they have a collapse -- >> how much do you look at their gdp and their demand? >> they run crude because they have teapot refineries that are not too efficient and they will be exporting more diesel and products like that, so there's been a sea change too in that the exciting product for refiners used to be diesel fuel. now it's too much diesel, too much heating oil, too much jet fuel, but gasoline is probably going to be on the asset.

i suspect that gasoline prices this spring are going to scream higher, and maybe even reflect something where in some cases they'll be twice the value of crude. >> wow. all right. super interesting. >> gasoline is perishable. you can't store it forever. >> great having you on. >> great to be here. classic cars on the auction block. robert frank is there with the sneak preview of the lineup spanning 70 years of automotive history. robert? >> reporter: hey, joe, selling some of the most extreme cars in auto history including this racing ferrari that could be the most second expensive car sol at auction, why and what the price could be after the break.

auctioning cars this week, spanning years of automotive engineering. robert frank is so comfortable in these settings, joining us now with more. you looked good in that car as you usually do, clark kent. >> reporter: anybody could look good in that car. it's an incredible car, selling up to $100 million worth of cars thursday, and one of the top trophies is the ferrari raced by the great, and that car could

sell between $28 million and $32 million. it would be the second most expensive car sold after pebble beach last year. a lot of amazing cars here to be sold, and holy grail of aston martins on sale thursday. this is the db 4 that could sell between $15 million and $17 million, making it the most exceptive british car sold. a lot of new collectors coming into the market, and with the new young collectors, it's about racing history. we're seeing new clients, a younger generation of collector emerging, and those are the trends that help build the hobby. >> reporter: you look about the hobby and new collectors, when -- you talk about racing history, nothing gets better than this, 1955 gold wing raced

by the great sterling moss that could sell between $5 million and $7 million, price rocketing in recent years. in the pop culture lines, janis joplin, she got a porsche instead, and that porsche's up for sale thursday, a 1963 that could sell between $400,000 and $600,000. one of her roadies painted a history he called "history of the universe" on the car, and she drove it everywhere in california. it's a well used car, but it's a great piece of his rhode island. for the young emerging collectors in your family, there's this. the toy, leather seats, a gas engine, perfect christmas present that could sell between $50,000 and $75,000. back to you. >> i like the joplin car.

>> i knew you would. >> for value. the others you can understand that, it was jthe paint job she drove around. i don't know. we have to talk to you when the fed raises because, number one, the income inequality -- enriching everyone that owns assets because they are just sitting there with, you know, getting all the savers' money, that's going to reverse. just in general, when money becomes less easily, you know, acquired and cheap, i just -- all these things. i mean, there's no end in sight, and it is the greater fool theory. you got to find someone to buy from you if you pay up for them, right? they go down 50% in the blink of an eye. >> that's an important point you make. we see in the art and diamond market and collectible car market a little bit of a slow down. some say it's more discerning, but, really, there's a bit more

price pressure in this market whether it's interest rates, global stock market volatility, and things are not what they were two years ago, and this will be a big test to the market, but they have chosen some creme de la creme of the automobile world. we'll watch the prices thursday. >> okay, robert, thank you. >> thank you, guys. speaking of special of rising interest rates, feds' first rate hike on track for december, but how fast do rates rise after that? talking to martin fed stein.

wall street on fed watch, oil near seven year low, and retailers count down to christmas, former chair and harvard professor martin feldstein with his assessment of the economy and why it's a start to the end of the fed's easy money mopolicy. >> what america can learn from security measures in israel. stopping isis, security screenings, and trump's proposal to ban muslims from entering the united states. that interview minutes away. netflix shares sitting at highs, stock up more than 150%, but does a slow down in

subscribers signal a problem? the biggest winners of 2015 as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box," 8:00, first in business worldwide. i'm joe here with michelle caruso-cabrera and senior markets commentator, mike santoli as guest host for three hours. >> two down. >> you need a raise. >> two down. >> one to go. then you go do other shows after this, don't you? >> later on, yeah. >> this afternoon. >> you need an agent. >> less than 90 minutes from the opening bell on wall street. the futures, same thing i said last time.

down 148 after a ragged session. >> getting worse. >> thursday was bad, remember, friday was great, got back -- >> yesterday giving up half of friday's gain, and now this is the other half. >> back to the rough. right in the mid-17s again, where we have been all year, flat. oil prices are not flat for the year. >> oh, 36. >> unbelievable. >> earlier, up .8 percent. it was a good move. like, unreal. >> 36.98. >> incredible. when is that going to be good? >> it's the weather, joe, partially. >> you can drive more. we're not seeing a lot of that in the polling. you'll see that this week. people are driving more for the holidays, but, yeah, a lot of over supply. we were ten bucks a barrel,

remember that in 1998? real price and budget pressure, the saudis can seem to let this go. >> other stories today, canadian pacific revising the offer for norfolk southern saying the new bid dramatically reduces regulatory risk for norfolk shareholders. using a voting trust scheme. norfolk responded saying there is still substantial regulatory worry and the proposal is highly up likely to be approved. home depot is backing its full year guidance and announcing new long term financial targets. the retailer's aiming for sales of $101 billion in fiscal 2018. chipotle hit this morning after boston college students including members of the men's basketball team were sick after dining at the chain. the chipotle in cleveland circle has been since closed. the massachusetts department of

health has been notified working to determine if there's a link to the ongoing national outbreak of e.coli associated with the chain. with the december rate hike, the debate is now on about when the next rate hike will be and how many after that. >> i told you. >> you did. you predicted that for days. >> the first removing uncertainty, steve. >> this is steve leisman full employment project, is what it is. >> the working project. >> if we're ever going to be talking about this, wasting no time, folks, the markets joined the debate about the december one and the one after that and after that. there's no one predicting either huge rate hikes or more than four so the range is useful to think about is probably 75 low end to 175 on the top end. here's a couple charts there. the blue line there is the fed's own prediction. that's the median rate of the

fomc member. we're going to get a new round of these -- december meeting, i expect it to come down a bit, and there's the mart there. in general, the fed came down to the margket, not the other way around. jp morgan says, quote, after december 15, the fed delivered four more hikes next year, think about 125 action. we assume only two small rate hikes for 2016. this is important. that leaves the rate below 2% approaching year eight of the expansion. steven stanley writes, further strong jobs reports like this one will most likely force the fed to raise rates more quickly than what it priced into the market, and implicit in the discussion is last week what the fed says we need in order to keep the unemployment rate steady or bring it down. that range is yellen less than 100,000 and top end at 150,000.

wages and inflation, if they pick up, talking about inflation last night, the main metric for the fed, and dollar stabilizing creates a comp period where the dollar brought down prices in 2015 if it depreciates a little bit, that helps inflation number, and job growth north of 200,000 forces the fed's hands to go faster depends on what else happens in the economy. >> don't move, steve, we have to talk to mar tty feldstein, goodo have you here. >> good to be back. >> you're a critic of fed policy. >> a critic and a praiser. >> okay. >> they achieved what they wanted to, pushing up equity prices, made people richer.

people spent giving us the recovery, but the price of that is that we have got a lot of, as you said, distorted asset prices, stock markets, bond prices, a lot of risk in that. >> so you think they hike in december? >> oh, yes. >> but then i thought they should have hiked in september, and it wouldn't have been bad to hike in march, but i think they will definitely hike now. >> what do you say to supporters of the fed saying all the terrible predictions, huge spikes in inflation because they print money, just creating other asset bubble, and thus far, none of that. >> well, i was not one who said that they were printing money because, in fact, the money was sucked back into the fed. it was not that we've seen a big increase in what economists think of as the money supply, and but i think we're getting to a point where the 5% unemployment rate, where there's going to be pressure in 2016 for

rapid increases in wages and prices, and the fed may be facing a long end of the market that is moving up, even though they are moving too slowly at the short end. >> is it possible that in spite of themselves, and more because of ser ren dipty so many things work in their favor that they get out okay and that the whole thing is -- >> well, we have to hope so, but i wouldn't belt t on that. >> leisman thinks he predicted this all along, but you wouldn't have been wrong without being lucky. >> or wouldn't have been right with a hundred other things going the other way. think about the shocks hitting the system over time. i mean, you talk about greece, the ineptitude of europe. the fed would have been out a long time ago. >> being at zero when the rest of the world is at zero any way,

you are not manipulating. >> inflation -- we know the core inflation rate, if you take out impact of energy, core inflation rate for the cpi is almost 2%. that's going to show up as the headline inflation rate in 2016, and people wake up saying, oh, look at that, inflation is rising, and it'll go further than that because we'll -- we're in this tighter and tighter labor market. >> marty, if you were in a policymaking position, this is not a crazy idea because you will be one day, but how far would you let wages run? what wage increases would be the kind of increases cause iing yo concern and cause you to say press on the brakes harder? >> real average hourly earnings up 2.3% over the last 12 months. we can't handle much more than that. 3%, maybe that's okay, but i

like at prices more than just wages. >> what do you think about the idea from jp morgan to the upper funds rate at the end of 2016? >> it's too low. what we're talking about is a negative real rate at that point. the cpi will be rising almost 2%. the fed funds rate, which is usually 2% more than inflation is going to be less than inflation at a time when we're at full employment. >> so 4% is a normal rate, is what you are saying? >> yes. two plus two is still four in this world. >> take a look at the european market now, hit very hard, miners in particular, u.s. equities suggest negative open because of the mining data from china and concerns, worried about chinese growth. >> we shouldn't spend a lot of time worrying about the chinese. they have a billion people to worry about it. they don't need our help. i would say the impact of china

on the u.s. economy is not much. and people in countries exporting equipment to them, korea, japan, germany or exporting raw materials like oil or copper, but the u.s. sells them a lot of soybeans and high-tech stuff they can't get any place else. the whole exports from the u.s. to china's less than 1% of our gdp. >> say we start doing better here and the world recovers a little, demand is back, corporations invest for the long term doing the things we say they are not doing now because of the fed, i mean, everything could eventually -- >> could be nice. but it's not my core bet. what worries me is that we've got a stock market that if you just take the s&p, the straight s&p and you look at it relative to history, it's 40% above

historic average for the s&p on a trailing basis. if you look at this fancier thing my colleague john campbell and bob schiller put together that deals with inflation, it's 60 and above. we have a long term market and long term bonds roughly half where they would normally be relative to the kind of inflation that's likely to be in the cards for next year. so there's still something on the horizon. we never know. things looked great in 2006. like, wow, we really did everything we did is perfect. >> unless we looked at house prices and saw where they were going. >> where do you think you're flying in the first 49 floors jumping off the 50th floor. thank you. >> great to be with you. >> that's one way to make a bet. >> no thesis. >> no possibility i could be

right. >> something -- >> less than 50. >> it's. good for seven years. eight years. coming up, shifting to gun control, terrorism, keeping citizens safe, the mayor of jerusalem joining us after the break and what america could learn on israel's war on terror.

they were robbed of their stage three weeks ago, and we'd like to offer them ours tonight. would you welcome the eagles of death metal? [ cheers and applause ] >> california rock band, eagles of death metal, returned to paris making an appearance alongside u-2 after a series of attacks on the paris capital leaving 130 dead. they were playing when gunmen broke in and opened fire, the first time the eagles of death metal performed since the terrorist attacks. in the midst of terrorist

attack in the u.s. and europe, 15 senior american law enforcement officials traveled to israel to observe multiple israeli security agencies. what can the u.s. learn from israel's defense strategy against terrorism? the mayor of jerusalem is joining us right now, and just to really cut to the chase, something we talk about all the time, it's whether you call something profiling or call something, you know, use another word for it, we're under the impression in this country that israel is better at just generally anticipating who might be a potential perpetrator. is that profiling? is that something you can do without hurting people's raight? >> you have to differentiate between the good and bad guy, and if you don't profile in a smart way, with logics, smart intelligence, the good guys may suffer. a third of my residences are

muslims. the majority of them want peaceful life. they want to go to work. they want better education for their kids and quality of life. you have to differentiate between those folks and a small percentage of the radical islamic people that are inciting the teenagers, and you have to do profiling to eliminate the bad guys from the rest. >> but you know you are not profiling people as being muslim? you are profiling people, a subgroup of people in some other way that doesn't sound like it's done with religion or race, but through actions? >> there's profiling for some of the radical jewish population. >> right, that too. it's actions, not who they are? >> i agree with you, and the challenge that the security forces have is to be very defensive or even offensive to figure out who the people that could commit terror and violence and screen them out and make sure they get a very different

treatment than the rest of the population. >> what's that mean practically? >> it means if they are suspicious -- people are suspicious of wanting to create a terrorist attack, they will be caught as much as we can before they go to create a terror attack, and that is very, very smart intelligence. the second element we must obey is distributing many, many people, the police, of course, in a smart way so that if god forbids there is a terror attack, the response is very rapid, and the last case is sometimes 15 seconds, less than 2 minutes, and the threat is neutralized, and the distribution of smart -- using smart intelligence, using the distribution of police in a smart way gives us a very, very effective wayed too eto do it. >> you got jerusalem. we can't do that here. >> another thing you can do in jerusalem and not here, 3% of the population of the civilians

have right to carry a weapon. usually, we talk about officers, captain and up for israeli army, which are well trained, very responsible. they know how to handle combat, and 3 % of the population has guns at home with license, and when we have a terrorist threat, we ask people to carry guns. there's sometimes better trained than the police, and there's no misuse of rifles and guns in israel. on the ton train. they give extra measures, exthere staert, and it's the opposite, i believe, of what's happening in the states. so by smart intelligence, smart distribution of police, engagement, as fast as possible with the threat, and last, but not least, which is one. most important things to remember, go back to life as fast as possible, don't cancel events, don't stop public transport, none of that. you go on with life as fast as possible so that the terrorists will get zero gains. swift neutralization of the

terrorist threat, and we move on with our life and our economic growth, and the challenge is put terrorists aside as much as you can and continue with the economic growth that jerusalem is, thank god, enjoying. >> do you have an advantage in the sense that the population buys into the very need for all these measures, and, therefore, has the approach that says this is part of life, we move on? >> oh, definitely. i think that you'd be surprised. the majority of the muslim population is concerned about these terrorist attacks as much as anybody else. they are the first to suffer. nobody goes and buys in their neighborhoods. they have challenges on getting to work. all the population of jerusalem suffers in case of a terrorist attack or when we have violence. the idea is, how do we neutralize it, eliminate it, make it small, and move on. thank god jerusalem is enjoying growth. we've been added to the most top ten attractive cities in the

world, and the high-tech sector, defined in "time" magazine and entrepreneur magazine as the top emerging tech hubs in the world. our high-tech is booming. we're doing well. terror will not deter us. >> how do we look at the people that are doing things, look more closely at those prone to commit terrorism? for example, do you spy on mosques? >> this is the special security forces' jobs. i will not get into how they operate. i just know that they are doing a phenomenal job of articulating -- >> devil's in the details, and you wonder how we can, you know, hear -- we have see something, say something, hoping ordinary citizens are going to, you know, alert does that happen as well? >> of course it does. >> here, i think there's worry, which we saw in the latest incident, worried that you don't want to be seen as someone that's biassed or racist.

>> life is simple. we'll be as aggressive as we can with the bad guys and as good as we can with the majority of the population. >> some good guys' toes get stepped on from time to time. >> well, could be. we don't want that and do everything we can that innocent people will not pay a price. you have to weigh in life. >> you do. >> and sometimes quality of life, and we'll always prefer to save lives, even if it becomes a little bit -- because of the challenges we have. sometimes people pay -- it's not the best way to live. >> right. >> however, these are usually very short term sanctions in order to live together in our city. >> yeah. you come to reality quickly, i'm sure, in a country like israel. i mean, we talk about sometimes in paris, used to hate guns, now i see soldiers with guns and they say thank god you're around. that happens, unfortunately. >> when you enter a city and see one square kilometer, more mosques, churches, and synagogues than anywhere else in

the world, and it works. people want to live together in our city, and we will not let radica radicals deter our way of life. >> thank you. >> my pleasure. >> taking off the training wheels and testing his prompter reading skills, a low bar, believe me. look at which retailers are -- there it says brining. they are probably not brining holiday cheer. that's like adding something like salt. probably meant bringing. bringing holiday cheer to consumers, retail round table just ahead. "squawk box" will be right back -- oh, back, sorry. ot a jo. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works.

(proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition!

welcome back to "squawk box," nike and lebron james keep the partnership going for a long, long time, as in for the rest of his life, he provided significant value to their business, brand, and shareholders, and says in a statement, quote, built a strong lebron business over 12 years and sees potential for this to continue to grow throughout his playing career and beyond. this is the first time nike officially gave a lifetime deal to an athlete, the largest guaranteed contract in the company's 44 year history. terms were not released. >> slow down. >> he's rotating a pen so fast. >> a lot of times when i see a

quote, i say, in their words. quote is ajarring. coming up, a round up of the holiday shopping season so far. click to browse. okay, who is winning your wallet? and then, they expect original content to double in 2016. taking steps to shift the strategy, but investors are weary after missing third quarter subscriber estimates. is the stock a buy now? "squawk box" will be right back. >> excellent. [ applause [ applause ]

beijing is looking at the first ever red alert for smog. the chinese capital going into shut down mode closing schools and factories and keeping half the city's vehicles off the roads. authorities say restrictions are in effect through thursday.

t-mobile accused of false advertising, the attorney general investigating complaints that the nation's fastest growing wireless carriers advertisements where misleading. the uncarrier campaign is what he's talking about, ripping up service contracts, and 91% of users are locked into two year loans and other equipment. he's busy. >> his goal is to be in the headlines every single day. you can't believe the distribution list when you're -- i mean, every single day the guy is trying to crush a business. >> he has magnetic business cards. >> pretty much. >> can i get in trouble for that? what can he do to me in new york? probably come here. >> we had him on one morning. >> oh, yeah. >> he couldn't remember why he was prosecuting the bank. >> that's right. >> he does so many. >> the exxon thing. >> oh, yeah.

nonstop. >> yeah. >> well, the attorney general, the governorship. >> yes. political. >> it's accurate. >> you said it. not me. >> time for a breakdown of winners and losers so far this holiday shopping season. cnbc courtney reagan has more on spending on shopping. >> something fun and festive. nice to see you, michelle. mastercard, x gas and autos grew this quarter, and apparel spending up 26% online, and electronic spending down 15% online. now, l brands is one of the top retailers so far this season as the angels strut down the runway in tonight's fashion show with the record black friday weekend, strong margin rates, and total november comps more than twice as strong as expected. american eagle earnings revealed the teen retailer off to a strong start, comps above last year, and with the ceo calling exceptionally strong online metrics, and specialty retailer, express, reporting a good start

to the holiday, upping full year guidance, and as a result, rbc says cosmetic retailer is, quote, bucking the trends on all fronts, and they call the latest results better than good for ulta. on "mad money," sketcher's ceo called november so strong, very, very good, event, deutsche bank's at etic footwear tracker confirmed the strength and said the data reveals under armour grew year over year, last week 170% in four weeks. cold weather apparel sellers are seeing stocks with record temps in the country, and total comps down 8%. j. crew's earnings see losses across the board, and, of course, in the december lull now that we often see after black friday, cyber monday, before it kicks off in the final two weekends of the holiday season. >> all right, we'll discuss retail more especially because

the price of oil this morning, which now, 36 handle, 36.99 a barrel. we assume when oil prices are lower, gas prices move lower, and let's talk more about the retailing landscape. tom, senior retail analyst at the financial group here in studio, and tom fort, research equity analyst, and the book did it again, two toms. what do you think in terms of retail holiday sales? we're going to get the official numbers later this week. >> yeah. i think, courtney, she summed it up extremely well. it's going to be a season that's okay. obviously, we have weather that's working against the retailers in key categories like outer wear and sweaters, which are typically higher average unit retail categories so they drive comp. the weather is helping consumers get to stores, no storms out there, but from the apparel sector, you highlighted the

winners, and innovators, like l brands, bath and body works or victoria's secret, those are the winne winners. everyone else struggles. traffic trends down dramatically, high single digits in some instances. it's a battlefield in the mall. >> the stock, a lot of them, telling us this already. so many department stores hit very hard over the last several months, almost the forecast in trouble. >> yeah, definitely, i mean, going into the holiday weekend, if you look at two of the better retailers, nordstrom and macy's, something happened in consumer sales in august and that weakness in the u.s. continued into black friday and cyber monday. i deaf in tfinitely think with weather in new york in october, november, and december, it's great for the consumer, but bad for the retailer. if you look at numbers overall, the national retail federation's projecting a growth down from 4%

last year, but up from a ten-year average of 2.7, the warm weather markdowns results in lower numbers for the holiday period. >> tom in studio, when we look at oil below 37, the 36 handle, that's supposed to be great? that's supposed to have led more consumers -- weather is so warm it's that much an justify set the extra spending is not translated? >> dollars are there, but not going to apparel, but other areas. people going out, spending more on, you know, eating out, more entertainment driven businesses, and i think the specialty land scape has to realize that product innovation and experience based performance is what drives results. that's where they get incremental dollars. see it at players like bath and body works who created very exciting environments, customers are willing to come out, there's an emotional connection, and they are getting some of that discretionary income trickling through. >> tom, if i can ask you a question about the elongation of

the holiday season. a lot of retailers try to offer promotions earlier as they do every year. this, too, it seems like it might have worked. do you believe consumers have pulled that spending forward, and if so, what's it mean the rest of the season? >> well, i think you have a strong thanksgiving. look at qvc, they reported record sales, not only on cyber monday and black friday, but on thanksgiving. i think you have a heavy promotional period for holiday weekend, and if you use ups as a guide, they basically, last year, were very well staffed for the pique days, black friday weekend and cyber monday and overstaffed in the lull peer. i anticipate they continue to see a level of discounting social activity going on, and then as we get closer to the holiday, it ramps up again. >> tom, you mentioned that, you know, the specialty retailers create a reason to go there, a special experience, but in general, the space seems to have

too many, and in other words, we have to see real radical structural changes, the market is implying that in the companies. >> no question that long term changes have to happen. there's the pull from on line business, kids spend more on tech, going out to eat, and it's interesting, courtney mentioned american eagle outfitters, the 20% increases in denim business because they influence innovation, flex into denim, it's stretch in women's, flex in men's. the secret is out. stretch is amazing. i think that's what is driving innovation. driving higher average retail. consumer wants something different, not another commodity t-shirt. it's the specialists' jobs to create the connection, add more innovati innovation, and, you know, step up to the plate. >> tom, mike highlights a

critical question, some retailers face an existential threat at this point because of the way the season is going, and the way retail is going in general. >> generally speaking, there's, you know, online continues to advance, and if you look at those differentiating themselves from the pack, amazon, with the prime now service and more than twept mark 20 markets, getting more one hour basis is compelling, and way fair, there's nesting going on, consumers spent on home related items and not apparel. way fair does a great job giving consumer access to a large number of products on a two-day basis. i think there are secular shifts beginning on, and i think that companies with physical stores differentiate themselves by having both the experience and seamlessly integrating tech in the stores, and there's examples of that, which is encouraging. >> you talk about the nesting trends in the united states,

things you do at home do well. is nesting happening now for any particular reason? is this in the wake of san bernardino or before? >> nesting's reflection of consumers are spending on home related items as you've seen a rebound in home after the pull back in, you know, after the housing bubble. i think it's a reflection of that, and i think on the apparel side, no one's come out with something that's ultra compelling to get the consumer to shift away some of that discretionary spending going towards homes on the apparel front. >> well, you, obviously, have not tried flex jeans then. >> no, i have not. i look forward to that. >> nesting? what do you think? >> i think there's no question. people are spending more on homes. >> why, why, why? >> boils down to the same thing. where they spend their money, where they get return for investment, where there's an emotional connection. there's not enough going on in apparel. how many black leggings can a woman have in her closet? it's -- we need more innovation. that's bottom line.

there's been select specialists who delivered innovation, and they are the winners. that's the gain here. you got to create something that's emotionally connecting. >> home depot had full guidance, and that's an example of the home space and homeowners wanting to invest in that area after a number of years during the recession where they did not. >> speaking of nesting, right. the two toms, thank you so much for joining us this morning. >> thank you. >> thank you. >> appreciate it. when we return, netflix shares, maybe under pressure this morning, but close to highs. investors concerned, though, about a dramatic increase in cost after the company announced plans on doubling the original programming next year. we'll drill down on the stock performance and where it goes from here. check out the futures right now. still not great, down 133 points on the dow, "squawk box" will be right back. or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction

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netflix shares surging 150% this year, but this morning, the stocks hit, down nearly 3%, are they concerned how much to spend on original content? for today's move just another new high? here with their stream of consciousness -- really? senior analyst and julia -- really, you guys are just going to ramble? >> no, not consciousness, just

thoughtfully edited comments. >> go ahead. >> nice. >> thanks. well, i think one thing interesting about netflix is that a new report came out saying that it accounts for 37% of streaming traffic during prime time hours, and, to me, even with all the questions about its future, global expansion, rising costs, the fact that it's that much responsible for that much internet traffic speaks to its power. >> not only that, but year over year the number's up. >> what they are talking about today, what did they say about spending more money on content? >> no, i mean, the content issue has been around for a while, but they expanded margins in the u.s. business. they proved out they can be profitable in the u.s. that's test for international. >> you really -- >> a big year, 34 emmy

nominations, now 16 original shows to 31. >> no guarantee of future performance. >> every indicator that we have, and, you know, only talking about the u.s. so far, but internationally, they continue to grow at an astounding clip with launches in italy, spain, and portugal, and app down loads in those countries are off to a solid start, and in 2016, they have asia launches that will be substantial. there's growth. there's global matrix to the service, and, you know, maybe, you know, on a worldwide basis, they burn cash. >> but -- >> go ahead. >> with respect to the original question, you know, what are investor concerns, yesterday, ted, the netflix's content chief says it's challenging, what all media companies figure out, does it make sense to get additional revenue by netflix to give them their content, and that could cannibalize their business.

that's one of the reasons why they have been creating more of their own originals, but, as of now, they have some long term deals with some of the biggest hollywood studios. children's content is popular on these services. they have a big deal with dreamworks animation. netflix has a deal with disney, the jessica jones show, a marvel original, and so i think it's seems like for now, at least, the hollywood studios understand they are locked into netflix for a bit, but i'm curious for hulu, the ad free option, owned by the media companies, if that lures over more of the studios. >> in the past, you've been on a lot, and i always, you know, kid around about cord cutting, comcast, look at old media, and remember old media was hid on disney with espn and talked to you at the time, netflix down 0 20% from its highs as well.

they were supposed to go to netflix, and it had not happened. now netflix is in a new high, and old media is not back to new highs. what you said, is that born out, do you think? >> yeah, absolutely. i mean, netflix valuation and, yeah, we talked about this, is, you know, certainly rich to conventional metrics. but tv cable ratings are down 11% a month; and netflix has the benefit of consumer behavior. benefit of the platform's interoperateble on demands ad free, so we think they double subscribers from where they stand today to 150 million. the pricing power thesis is very strong. for every dollar that netflix raises prices globely, that's two bucks a share. we think the market is in tact, right? everyone models in losses internationally for a long, long time, but replicate u.s. markets -- >> the ground pressure, you call

today, the shares with -- what you done? this is brilliant too. >> we launched -- >> with a buy rating. >> come on! what. >> price target? >> $72. >> why? everything you said is negative. >> not necessarily. of the traditional companies, comcast is the best to endure. they have the high speed data piped into the home. so you have to get the netflix, youtube, video somehow. >> go on. >> big picture for netflix. the other case, aside from cost, you said pricing power is one of the issues, and they free ride the infrastructure. they do represent a third of downstream. they have some great models that work now.

does anything threaten those angles. >> i want comcast to charge them more because they take up a big space. >> i would say net neutrality, the new usage base billing that is being tested out, that comcast will charge more for broadband. netflix is the killer app that the consumer needs and becomes the pricing power for comcast in terms of the pipe to deliver netflix. >> isn't it in front of the court now? we'll hear in january or -- >> net neutrality has been in front of the courts for a while. >> it was taken up on friday, and it will be out february, march. >> we'll have to see. >> jim cramer from the new york stock exchange after this.

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most viewers are like we always thought the more deflation and the commodities the better. there's a lot of credit risk. people are talking about which oil companies will go under. which companies can't sustain the prices, whether the dividends will be cut. even though oil is 7% of the market -- of the s&p, that leaves out the master limited partnerships under such pressure that it's very worrisome to people. >> anything in the market yet, jim, that is kind of -- that is kind of the opposite of a premium in terms of terrorism? do you think anyone is keeping dry powder because you don't want to be in front of something? >> i think so. people want -- i think there could be a pause and then the rate hike and people buy. i also think there is just a sense, we've been talking about this industrial recession that's going on and what the federal reserve will do to that.

you look at the numbers out of china you have to believe that the world is continuing to slow. those numbers are bad. and the miners are really bad. >> i love the eagles division. everybody is 5-7. everybody is in first place. so funny. >> what will come out of that conference, we'll tear up the rest of the league. >> when we return, crude realities, oil's slippery slope putting pressure on stocks in that sector. a rundown of what you need to watch as oil moves lower. every year, the amount of data your enterprise uses goes up. smart devices are up.

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check out oil prices right now. ew. >> brent is below 40 bucks for the first time since 2009? >> where is bund? host of oil and gas names getting hit hard. chesapeake, kinder morgan, transocean and marathon all down. year to date the charts look worse, in fact. we'll look at some of these. there they are. all down. the big names, oil companies like exxonmobil, chevron, conoco, total, royal dutch shell all down big today. if you want to see something, look at any of the coal stocks.

for example, console energy. this stock down 80% this year making it the biggest loser among s&p 500 companies. mike? >> ugly. >> you're awesome. >> back soon. >> you have brains and beauty. please come back. >> ditto. join us tomorrow. "squawk on the street" is next. >> you do, too. good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. m chinese trade data comes in weak. mining stocks hit hard, anglo americans spends the dividend. europe taking the queue from china and japan, the big story today, oil below 37 for the first time since