kelly to keep on following that market rally. there we go, 167, we're not had the highs of the day. it's been nice to be back together again. >> we'll call it the christmas show, green and red. appreciate it. thanks very much for watching "power lunch." "closing bell" starts right now. you still got it! >> welcome to "closing bell", everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. boy, do we have a lot to talk about. something you don't even see. oil prices continue lower, but energy stocks are rallying, leading the broader indices higher, we'll break it down and we'll ponder today, kellry evans whether this should signal a bottom for oil prices. there i said it. >> which are still a bit weaker.

twitter also catching a bit today, announcing a new way to monetize users that donnell actually ever log in. >> how do you not log in? >> if you use a link or something like that. >> shares nearly up 8%. plus the shrinking middle class. a surprising new study showing the middle classes losing ground and the impact that could have. >> but we start with this energy-led rally. despite oil dropping, energy stocks are on the rise right now. >> joining us to talk about this seeming divergence. what do you make of this? you know, was a "squawk box" this morning saying he feels like oil stocks have been unfairly sold, even as oil prices went lower here. what do you think is going on,

alan? >> this could be the beginning of something. that's -- the energy etf not get anywhere near new lows. it takes out the lows a bit. we took out the august lows, and then got to 37 fishes. that is a technical target. now we're but but there are so many people, so crowded to the short side, it would be interesting to see how we bounce and how the markets recover. >> we also should put some of these names back up. a love of them were son. soo is today just a reboujd from that sell-off, not even capturing all of that yet? at what point does that become

even more significant? >> that's what we need to see. we need to see oil back up to the $40 level technically. let's put in perspective, what happened to the euro occurrencery, a very similar marketplace. short that marketplace, and you saw a healthy bounce when everyone had to run to the exits. i think the dollar is the wild card. the fact that euro occurrencery means relatively new highs. that could be a positive, but we want to be a couple consecutive days. we need to see a sustained bounce and sigh how the shorts react. >> just for the commodity itself, what do you make of those? some who are saying maybe $25 oil, i've hard as low as $20 oil. >> what do you see happening? >> the risk/reward is favors the bulls. 33 was the extreme low back, so that's a level to lean on. you're seeing a lot of signs of

the mock reaching mac mum pain. a sign today was i saw an article that alaska is looking for -- so these are the types of things that you see at the bottom of a market. >> and we were asking yesterday what if oil goes back up again? does alaska, if they do institute this income tax, would they suspend it? >> remove it oh so quickly? >> you know how politicians operate. i wouldn't think so. >> i wouldn't think so, either. >> alan, thank you. which is also spurring some hefty budget cuts, more on that story from morgan brennan. >> hey, guys. >> conoco phillips say the cap ex budget will $7.7 billion, down 25% from an last december

as energy prices stay low. so 2016's projection is also 5% below 2014, so we're talking some steep cuts here. operating costs falling to 7.7 billion as well, but production is expected to grow modestly, 1% to 3%, as several major projects come online. and noncore assets not only an investor call executives spending a lot of time assuring analysts it will and can maintain the different, which is the company's, quote, top priority. also the lower energy prices stayed for longer, but that the company also needs to prepare for the next downturn after that as well as taking steps to do that. all of this on the heels of chevron announcing it too will slash the capital budget 24% to 26.6 billion. if you look at shares of both of those companies, they're both up more than 2% today.

>> chevron also said on our air that maintaining the different is a top priority. isn't that interest? that's the mantra right now. we're going to do whatever we can to weather this low energy period. >> very much so. that is the key. the oil majors, that's the kay with the -- and obviously we're hearing this from conoco today as well. these companies are slashing their capital expenditures, slashing their operating expenses, and doing that -- and doing all of that to get that overhead down, but continuing to maintain the dividends which in the case of conoco pays something like 6% right now. kinder morgan aren't freeport mcmoran slashing their dividends, but these big major oil prayers are continuing to hang on to that, and they seem to be attracting investors if you look at those stocks today. >> true. thank you, morgan. let's get to "closing bell"

exchange. keith fitzgerald, keith bliss is with us here, and rick santelli is there in chicago. keithably, what is this rally about? we keep saying, gee, you can draw lines back to oil, yet we've had volume it illustrate this week. you've seen that in, there are a couple things that are driving the market if you look over the last two weeks of sessions, it's clearly fed policy, actually i thought the rally was going to be sparked on the oil movie up today, but opec said they're pumping more oil than they ever have. a couple things that people need to keep an eye on is a widening out of the corporate bond yields between high yields and high

grade bonds. we start to see a sell-off. is the transports suddenly got oversold. they've seen a dramatic pullback of about 7% since the end of november. that is in the face of falling energy prices. that's a divergens and something that we don't ordinary see. you see the transports rally when oil pulls in, so i think we're going to churn a bit, get more focus next week. i think a lot of the fed move is already priced in to the market, but we'll see price action. what's important is for the s&p 500 to hold on to that level that we've been dancing around, other we'll pull back. >> keith fitzgerald, how much of today's rebound do you think is about earlier weakness or about emergencying from the fed about taking its low. >> i think it's a combination of both. i think there will be some churn. that's why ear seeing a divergence with oil price and

the imagines themselves. people are looking for income, dividends, and holiday volatility. and in bigger moves that are being amplified. to me this is par for the course. i'm not especially excited, and unfortunately i don't see the rally sticking. >> rick, all the moving parts and pieces, the usual intermarket relationships still are not holding in some cases. still this repricing that you mentioned yesterday is still going on. >> right? >> the great recalibration, the catalyst is normalization. south after kaj ran, all-time low against the dollar. their interest rates are up over 100 basis points. same ago china. they're looking at a currency that's moving down, as rates in the u.s. are going to go up. they try to combat that as best they can. in south africa's case, they fired the financial minister. he had the job less than two years, i believe.

and whether the issue is normalization, so are or the rate of increase after the first rate hike, to me that's like saying, i'ming on, i'm going to the dentist, but he as going to go slow. i'm sorry, i don't think that changes anything. if you look at where they pecked funds. if we're talking about the first 25, we'll be at 125 or two. i think it has to occur. i expect more bricks as a subset of emerging markets to continue to do what we've seen out of china and south africa, especially as we get closer to wednesday. >> on that note, keith filling gerald, are there any particular plays you see into year end?

>> they're gathering power there. they have large customer bases and more importantly they have the ability to move margins, so the average retailer, the walmart, for example, which is down significantly and chasing that kind of market is not the play you want to make, the amazon, the googles, the apples, are all clear-winners. >> and before we let you go, keith bliss, same question to you. do you see any opportunities here? >> well, it's going to depend upon the tech sector. i do agree with the other keith a bit. it will depend on where we see the nasdaq composite go. on the russell it has to get above that 1163 level. if it does, i would play in tech. consumer discretionary has been the best performer this year,

though i would be cautious, and pick and choose the right names. >> on that nasdaq level, we're still a good bit away from those levels. >> thank you, rick santelli for reminding me i have a dentist appointment tomorrow. >> that's okay. he'll go slow. >> right, that's all i need. the dow is up 136 points, the s&p 500 adding about 11, is the vix moving lower, the small keeps even adding. twitter is up on that it's expanding its saud reach to an additional 500 million people. we have lots of questions for jon fortt about that. a new stilledy showing the middle class shrinking in every decade since the 1970s. you're watching cnbc, first in business worldwide. when you do business everywhere, the challenges of keeping everyone working together

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created by sears in june. just for the record, sears holdings today, up 4.6%. we have a news alert on hoverboards today. seema mody joins us with the story. >> another airline banning the hoverboard seen as one hot holidays gifts. delta has knead the biggs to not allow them on board, due to safety regulations, citing the lithium ion batteries, delta says these batteries can spontaneously overheat and pose a fire hazard risk. air canada, british aairways, jetblue, hawaiian air among others are not allowing hover boards on their planes. back to you. thank you very much. do you often travel with your hoverboard. >> yes, i would be utterly lost without it. great way to get around the airport, though. twitter will start showing

ads to people, there are more than 500 million people by twitter's estimates who do that. jon fortt joins us with more. jon? >> say you do a google search for something and a tweet pops up. you don't have to be logged in. that makes an important moment to twitter investors. first twitter will start showing though adding to people who don't tweet, never even joined twitter. that's a big deal, because twitter seems to be hitting a wall to join and participate in the service. they counted 220 million act sieve users. so this is a way for turner to make money off the -- by include

tweets in search results. if there's a potential down side, ads won't bring in as much money as twitter's other ads they expect month advertising at about half the rate. they can't be targeted as well, and the challenge will probably be to add logged-out ads to the mix, but not rely on them too much. overall you want people to log in, as the cfo said in the last earnings call they want users to commit to twitter instead of going on and seeing other people. >> jon, it's interesting, for people who don't have a twitter account, how will this change the way things look? or maybe even for those of us who do. >> yeah, it could be on a profile page, it could be when you cluck through from an individual tweet in your google results to something else, the challenge again is always in cases like this where the

company that makes the ad valuable, but not so obtrusive that people have a bad sxernlsz and don't want to keep doing this. so that is where the targeting comes in. twitter telling me they do feel like they ads will be good enough, targeted well fluff based on where the person is coming from. they do know something about what that user is interested in, but they're not going to show an ad if they don't think they can show a good one. we'll see how it works out. >> the stock is up 7%, is anyone trying to guess how much money twitter could make? >> if they're able to monetize at half the rate of your typically twitter ad and adding in half a billion users who otherwise weren't accessible -- i haven't done the math, but there's math to be done and i'm sure the analysts are doing it. >> thank you, jon. see you later. about 40 minute toss go here. twitter, and the broader market is up today.

we're seeing a bit more correlation. we had some unique things like dow chemical going on. energy is actually one of the outperformers, that said, gains of 106 points to the dow, about a third of a percent gain. the nasdaq is up 25. coming up, why cheap fuel prices could turn out to be a blessing and curse for airlines profits next yeerk. and later mark fields speaks with us on a first on cnbc interview, which technologies is the sp auto giant betting on?

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welcome back. keeping an eye on oil, moving lower again today. it's not just aisle, but a bunch of other related commodities, nevertheless energy is actually one of the outperformers today. the dow is off its highs, though. and there's crude, it's down about another 1%. and speaking of which the international air transport association said today the airline industry is headed towards a record $33 billion net profit this year. >> it says low fuel prices are contributing, but there could be a down side to cheap oil for some airlines. let's britain in he lien becker. thanks for joining us. in what way could it be a negative, helene. >> one it's obviously a good thing for all the companies, but the one thing we are just concerned about is with lower oil prices, there's really no

incentive for airline companies to raise ticket prices. for international airlines, our biggest concern, of course, is that oil is is the dollar denominated expense, so with a very strong dollar, the oil doesn't have the same benefit as it does for u.s. airlines. >> have the airlines wrung out as much benefit as they're going to get, or if prices continue lower next year, could that be a continued benefit for them? >> oh, absolutely. in fact part of our thought process for 2016 is continued low oil prices is a good event for margins. we continue to think that airline traffic should be fairly robust, given a 2% gdp forecast. you know, with a strong dollar, we expect international travel to be fairly strong, especially outbound from the united states. domestic market, we expect

record high/low factor and expect record earnings again. >> it's interesting to think of the -- it was down sharply. i guess that's why we ask, what is really going on here? even though fuel prices are lower, what further headwinds may come out of the headlines faces southwest and some of the others, what do you think? >> actually southwest was just speaking as an industry function a couple hours ago, and talked a bit about what they saw in november. you may recall last week when delta reported their revenue numbers, unit revenue numbers for the month of november, it was actually a very good report, better than expected? southwest's case, they expected fares to go up. around thanksgiving and around christmas. what really happened is nobody else raised fares right around thanksgiving. they kind of kept the fares low. when they figured out that fares

were actually going to be below what they thought they were going to be, they wound up cutting fares. that was the disconnect between what they thought would happen and what actually happened. of course the stock was down 10%, down another 2% yesterday, up about 2% today. another thing for the southwest, a big benefit in their favor in the short term, anyway, is their pilots rejected when you think about that, they're about 2% below what they thought they were going to be. >> we all know there's yet another revenue streams for the allian alliance, those lovely fee that is they charge for baggage and, you know, peanuts and pillows, all those things. are those going to go up?

is that where they make up the difference in their load factors are lower or downle airfares to try to fill the planes? >> so the first part of your question was lower load factors. if you don't get the person on the plane you're not going to get them buying a bag fee or snack box or drink or what have you. so you really want them on the plane. the best thing to do, of course, is to discount the fare. once you discount that fare, you get to upsell all those wonderful things that those of you who fly in coach have to buy. >> which is what's going on, right? >> exact. certainly profitable in general, because fuel costs are down. but certainly to your point those ancillary revenues are helping a lot. >> that's for sure. hell even, thank

hellene, thank you. we'll get you a new earpiece next time. >> thank, thank you. from buying firearms in the state. that would make connecticut the first stays in the nation to understake such a measurer. swiss police actively seeking suspects in connection with a terrorist threat. alert levels raised after police were warned the suspects may be in the area. residents in washington state bracing for fresh rains after the northwest was hit by storms that triggered widespread flooding, landslides and road closures. thousands were left without power. washington's governor declaring a state of emergencily. and marissa mayer giving birth to identical twinges, tweeting she, her husband and the twins are doing great. yesterday she appeared on cnbc

to discuss a new plan for the future of yahoo. we wish nim all of course our very best. back to you. it is astounding, when you consider she was just on yesterday. that was video, a little over 24 hours ago, and then she gives birth to twins. >> not that she was on tv 24 hours ago, but dealing with a major, major issue with her company, which is why she was on tv and gave birth right after that. very healthy twins, though. >> we certainly wish them well, but we're wondering what she's name them. this ultimate spin-off she's achieved here today. >> thank you, sharon. about 30 minutes to go leer, baba, abaco, yes, we had a lot. s&p up 7 1/2, nasdaq 22. we'll come back with a leading trader -- wait, it's gordon

today. i, you better be careful. >> i'm sorry. >> from adobe and restoration hardware, we'll bring you their number the second they hit the tape and instant analysis right after the closing bell. ♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.

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into welcome back, checking back in with first solar, needham downgrading its rating after the forecast did come in lower than estimates. all right. we've got less than 30 minutes as we go into the final half hour of the trading session. we had scheduled an interview with the top trader on the floor, so he was not available. gordon has been gracious to step in. a rot of volt tilt. stocks moving higher, it makes sense of it. at some point people will come in and get behind the name. every time people have been getting involved, they're not getting the lift they're expecting. i think that has to do with guys

looking for bids we're a bet locked in. the fact that we are enters the tax-selling season, but we have a fed that probably will raise rates, how does it complicate all of that? >> it's the last full week of the year, a quad switch, the fed announcement, this is the last one of the year, will they raise it finally? if they don't, what are the implications there? a lot of things in play, and will there be as end of the year play? will we start the rally? >> el yeah, we'll still see a move to the upside, but more like a january effect probably coming into place leer, bill. >> thank you very much, gordon. >> a pleasure. kelly? >> so, yeah, tricky. the middle class officially no longer the majority in america,

cod to new research today out from the pugh research center. the report shows the share of adults falling, while in the upper income tier growing, this is the first time since 1971 when the data began that the middle classes smaller. joining us now to discusses potential economic impact is schilling, and is a welcome to you both. gary, just beginning with us, what's your reaction. >> it's not really new, but what's been happening sits the great recession. no growth in purchasing power for the average american for this country. as a result, we've had this polarization going on, which higher incomes are going up, more people in effect end up in the lower end. what's fascinating about this is this shift in income shares has been going on, well, government data goes back to 1966, but that didn't bother people as long as

the purchasing power was going up. when you're losing share and purchasing power, well, people react. if you remember the movie "network" where howard beale gets out of his chair, runs to the window, says i'm mad at hell and i'm not going to take it any longer. we've seen it also in europe. you see it in the country, the trumps on the one hand and bernie sanders on the other. i think people are reacting to this. >> the pugh research report, which is quite long, they seem to suggests that some of this is a demographic play and, you know, some of the middle class that existed in the '70s and '0s, they have aged and moved into the upper class in terms of income levels. so is this a problem that exists, or is this more just an evolution in our economy? >> well, i think it is, bill,

part of an evolution, the older you become, the higher your income usually is. the statistics bear that out over decades and decades. what i find fascinating about this data is that if you really think about the liberal answer to kind of inequality and the middle class, and incomes, it's always to grow the government and tax the we89y more and redistribute more income. we8, back in the 1950s, core government spending, non-defense spending, was only about 5% of gdp. that started to change in 1965 with the great society. today it's about 17 or 18% of gdp. in other words, government has grown by three or fourfold over the last 30 or 40 or 50 years. >> wouldn't that create theoretically more middle-class jobs? >> no, i actually think it hurts

the creation of jobs, because the bigger the government gets, we can't forget that the private sector pays for the government. so the bigger the government gets, the smaller the private sector is, and the smaller the pride seconder sector, the less income that's available toss paid to those people. so government robs the private sector of the vibrancy. we're showing also an interesting graphic just there, gariy, the place where we've seen the most significant movements are in the low zest quartile, if you will, those in the lower income bracket, that shrunk as a -- it's ground from 16% to 20%, so has the highest. so, again, you know, even though i thigh this is a long-term ease merging trend, did it discussing more motivation to do something

for it, or more significant changes. >> again, i agree with brian, i don't believe government has attempted to do much, but the biggest phenomenon is globalization. what happened is a lot of middle-income jobs, people in manufacturing that were very well paid, those jobs have disappeared. they've got to china and now to vietnam or bangladesh, and so on. >> is that a failure of economic policy, of corporate america? or just an evolution? >> bill, it's a reality of the world. it's like tried to hold back the tide. if you try to do something become it, it really is self-defeating. but it is a reality, and of course as i say, it has gotten very frustrating to people recently, because they say i'm not only losing market share, i'm losing absolute income. they say the political

reactions, you see it in europe, the national front party, and in the uk, the leader of the labour party far left, i think we'll see a lot of pressure on governments to do something. it may end up with fiscal stimulus. monetary stimulus, quantitative easing isn't doing the job. >> i know we could spend an hour on thrk i know i could, and i suspect you could, too, but we have to move on. thank you, both. good to see you both. >> you're welcome. 20 minutes to go, and dow is up 113. it was up for a brief period 200 points, has pulled back a bit, but interestingly, energy stocks leading to the up side. still ahead, mark fields discusses his vision for the autogiant. up next, walmart jumps into the fray of mobile payments. our mary thompson will tell you how big a threat this may be to,

for example, apple pay. coming up. [music]

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go pro up almost 11%, announcing the name of the drone it expects to launch the first half of next year. they're going to call it karma. >> they already use their saddam ras in a bunch of drones. why not build one. go pro says it's adding an apple watch app, allowance users to control their cameras right from their wrists, kelly evans. >> a leading m & a specialist says it could be -- so be sure to stick around next hour for him. jane wells joins us with details. s&p is downgrading the rating on the secure dead to double b from triple b.

it was reported that same-store sales fell again 3%. what s&p is say it's downgrading it, taking yum brands off watch. it means primarily the meaningfully highered leverage. we -- and the stable outlook reflects or -- so where it is lowers it, but it does think it has a table outlook. back to you. >> by the way, the stock was down as much as 3%, but it's come back. >> i see that. lindsey graham, it's

interesting, this obviously comes as yum is trying to spit out and do more stuff to shore up investors' concerns about its future. this move can't help. >> no, it can't, and it's an interesting move saying, yeah we're lowering their ratings, but we think things will get better. just not right away. >> thanks, jane. watch out, we're going back to walmart, larges the pay system. mary thompson looks at the threat posed by the world et cetera largest retailer. mary? >> wall mart says it's not about competing, but rather providing an end-to-end mobile experience for its shoppers. why do it? changing habits. more clients use their phones, the mobile wallet allows them to pay with their phones as well. another thing to thick about 9

ceo doug manage millen says in-extort, only $1400, but thought shopping both in store and online spend $25 a years. in other words, to drive sales, you need to be an omnichannel retailer offering clients a number of ways to buy and pay for the products. walmart is expanding it with the wallet. you set it up on the phone through the app. link walmart pay to debit or credit cards already stored on your account or at another debit or gift card you may want to use. at checkout, the camera takes a picture of the q-code and e-set is e-mailed to you. what is unclear is the relationship with mcx, a group of retailers that includes walmart, which has launched its own mobile wallet. walmart only saying that walmart pay may eventually add other

mobile wallets. >> thank you, mary. >> does that fit into your lifestyle? >> there's no super store here, but can you integrate it in -- the walmart pay into the apple pay system? >> probably. i shall try to find out for you. >> i know you will. dow is up about 90 points at the moment. we'll find out why tech stocks and financials could rally into the new year, talk with a couple analysts about that after this. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data

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sox, good to see you both. so we're sort of looking ahead to 2016 at this point. >> absolutely. where are you going to make money? >> i'm looking at the beleaguered energy names. i think there's a lot to be said about the names in that space. we look to look at things that have been beat up, but can show their way, that have wonderful dividends and increasing dividends. >> you think that's what happened today? well this rally in energy stocks. >> not good enough. we like to see nice free cash flows. kind are mooringen interestingly has a positive -- they essentially cut the different. >> i would echo that.

>> i think it's a bad idea to bet against, we like the midstream partnerships. they don't have the price sentence activities, they have solid assets. that went into a coma for three years, you would make a -- >> you don't need an opinion about the price of oil? >> i think oil bottomed two days ago. >> really? >> it's a finite resource. it will come back. i'm looking out very long term, and if you're looking long term, it's a great time to look at that space. >> what about other parts of this market? what else looks attractive? >> besides the mlps? >> an exxon out there has increased dividend for, what, 35 years? i don't think they're not going

to increase their different. yet the saturdays are pretty good. it's been a pretty good idea to buy them. good things tend to happen to cheap stocks. >> we expect the fed to raise rates maybe beginning next week. they might raise them a quarter of a point. it does depend. it's kind of question. but that's really not meaningful to the long-term aspect of the safer dividend names. i still think ute get a much better return in the market. >> same question. i think there's a lot of technology names that we were be in. i like the social media names. >> twitter? >> i like twitter. i think it's either going to get itself together or will get bought. it's a risky name to play, and i

also like facebook for the long term as well. >> twitter, jeff? >> i don't know anything about twitter. i like the legacy technology company that is look cheap. they are cheap for a reason. they have missed the curve on cybersecurity. i think any one of the cyberstocks is ripe for acquisition. >> good to see you both. thank you. >> a pleasure. >> merry christmas. >> merry christmas. >> merry christmas. we're coming back with a closing countdown on a very interesting today. >> and we'll get -- plus mark fields will discuss house technology will keep the auto maker ahead of the pack. you're watching cnbc, first in business worldwide. (politely) wait, wait, wait! you can't put it in like that,

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to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most. a quick recap of the day, rally day, energy among the leaders, the dow at one time was up 200 points, up just 90 now. oil, though, continued lower. heading 36, barely in that range. among those lead eers in the do were among the gainers, and we know about some of the dividends they pay. get ready for earnings after the

bell from the likes of adobe and restoration hardware. there seems to be just too much uncertainty for the market to push forward. there wasn't big volume, but not information conviction. these are largely utilities, these are for the last month. we've been moving down since december 2nd. that's the draghi speech. where everything was concerned about it. >> people are getting ready for the fed -- >> that's exactly what's going on. that's one of the few things that has a clear trend. we're looking for trends right now. i'm hopeful w50e9 get some

clearer trends. they're commemorating their 20th anniversary. stay tuned we have earnings from adobe and restoration hardware and mark fields, the ceo of ford, plus our interview with art cashing coming up. kelly? the s&p adding about 4 1/2 in its part, from the past sessions, well off that session high, still about a half percent game there. we're also joined by ellen from morrison stanley. and steve grasso off the floor

in just a moment. so energy was just one of the beat-up groups that was leading. you did have energy plays. rallies today, but also heavily -- if you look at the top performers, the s&p, it was the losers of the year. i think you want the low-grade anxiety built up. >> we're op a few session away from the meeting. is any of today's really ball

john hilsenrath -- >> actually i think today felt like the seasonal trade started between the end of the year. it was some high beta names that did quite well. so, yeah, we got oversold after the last couple days, but what they went back to today is what's going to get me some alpha. >> it wasn't the familiar huge tech growth stops. >> with that fed meeting coming up, great to have you with us. soo what do you tect out wednesdays's meeting and what due expect in 2016? >> so we think the fed will be very careful about crafting the message.

she need to dial down, a more definitive take just so we think they put a more gradual past in their materials that follow the wording in the statement. but i think bill dudley will end up being right, this is the most well telegraphed most thought out rate hike in historic and, youb you phet readily has to get it right. we think the mention they send is we've gotten off the zero, and we only expect three more rate hikes this year. >> steve graso is here off the fluke. i think i read that five-year treasuries shorts wir their highest level since 1993.

is there a risk this market is way too one-sided? >> yeah, i think there is a risen of that. you could say the fed was clear a number of times this past year. i'm on the fence. i think they're looking for any cover. i think they're going to do it. having said that, i don't think they should do it. in they don't do it, some market is going south. >> well, that's true. ease specially if we rally into the news.

everyone will be like what happened? >> when they say it's one and done, that's what most people feel as if that's going to take place. they throw out all the data dependency. it just one and done in the checkered box? >> the other thing that's happening in the markets is the real weakness. the high yield. huge news. it has people why concerned. after having double-digit declines and basically the latest month and certainly year to date. how does that fit with this whole theme of the federal reserve raising rates if that's the harbinger of weakness, or is it because -- >> it speaks to the very unusual conditions we have at the start of the tightening cycle, which is financial conditions already tightening a.

says, of course, the dollar routing. i think credit would have to worsen a lot in three days to make a difference, but maybe it does speak to the wait-and-see mode afterwards. the lower levels of the high-yield market have really been obliterated at this point. you have written off a by chunk of issuers, so the default cycle, everyone sees this thing coming, the question is, is the fed just noise in there? coming from zero doesn't matter that much. >> ellen, you guys do a read of financial conditions, how do things look to you? >> financial conditions have eased a lot. so that really shows that global financial investors are given the fed the go ahead. i agree, if they don't go next week, that sends the wrong message about confidence in the economy. i think it will be detrimental to markets if they don't go. i think when we call this a policy tightening psych the, we

have to careful, because traditional it's a late business expanse phenomenon where the fed is raising rates to slow an overheating economic. we have to differentiate, and i think the fell is differentiates, this is about getting off the zero. where the fed just goes and keeping going. if i can tell you they shouldn't raise rates for years if this were a traditional policy tightening schedule, so it's sort of the one and we'll let you notice. there's going to be more, but we don't know how many more. >> so interesting. let's leave it there for a moment, everything. a doblee first, let's get to jon fortt. >> it's good. the stock getting clover to all-time highs after hours, as the company reports revenues of $1.31 billion. that's a bit higher than wall street had expected. also adjusted earnings per share

creative annual recurring revenue of 2.6 billion. 9 i'm going to talk to ceo with norion shortly and get more color on this. part of the strategy in cloud right now for adobe, increasing the amount of spend per subscriber as adobe is bolting on more and more different things things they allow their -- they bought, which includes stock photos, and number of tools their customer versus to choose from, but from this top line and bottom line record, it appears that things are going pretty well for them, kelly. >> jon, thanks. reaction here. >> this stock has been on a

tear. so let's just go back about a month and a half ago, they set the bar a bit lower, to people kind of freaked out, but then they bought that weakness. the reason they're buying that weakness is it's clear even from this report the company has done a good job, it's clearly driving the results. this is a company that's not cheap, at 25 times forward estimates, but they are going to grow earnings 30% that they actually already endorsed just last month over the next cup 8 years, so it's very impressive. in fact, this is an area of software as a service that overlaps with the ipo, though it's been a dis matt year, ending on a high note, isn't it, bob pisani? >> you're right. let's start on the high note. they went puck today and not only priced well, but ended the day well. it's prepackaged software. but the price talk a couple days before that was 19 to 20.

and listen, just a few days ago they were talking 20 million shares, not 22 at 1650 to 1850, so you see you go from 16.50 to 18.50, take a look at how it did intraday. it opened at 127 and change pretty much stayed there. so the bottom line is not only did the company make a lot of money, even somebody who bought tess opening today made a bit of money. they have a bunch of peers, competitors. take a look at tab lo. this face has done very very well overall. so it went public a few years ago. $31, you can see trading at 92. that's a 200% gain. both went public a couple years ago. they too are also trading well above their initial price. overall tech ipos for the year, half what they were last year. 23, that's it. i was amazed at this number.

that's because so many of the companies didn't need to go public, they had private financing. whether or not this will continue, doubtful. maybe they'll force them to take a haircut. take a look at the total ipos for the year, 169, that is 46%, and and then after that. they were demanding major haircuts. the one good piece of this, kelley, the people who bought them generally had better performance than in the first half of the year, all of which deteriorated. >> stay right there, bob. steve, this has to have people breathing a sigh of relief. >> i think bob just nailed it. when you look at the marketplace, people want to pull their ipos.

they don't feel comfortable in a market with tremendous volatility. with the fed kind of playing games, not purposely, but we did have a year that was a little hard to match and a little hard to see where the light was at the end of the tunnel, so if you were in the ipo game, and as bob said, you can get your money through vc guys, you can go that rule, so make next year you start to see the ipo market come back. >> mike? >> it's a symptom of the shrinking stock market in general. the number is way, way down from the peak. you have big companies buying back shares. there's this idea that you don't actually want to be in the public markets unless you have to, and i think that's why some of these one-on ipos that get through will get more attention than they otherwise would. so if we don't see a traditional stair-step move higher in rates and in the yield curve, what kind of backdrop is that for

continuation that we're seeing and for pinchal ipos, that whole kind of backdrop, how much does it really change? >> i think we'll be under this backdrop for quite some time. the fed is going to be raising rates, but they'll be telling us their end game is probably much lower. i think a lot of the activity we've been seeing could be the anticipate of higher rates, but rates are not going to rise that much. so i'm not sure that will be very restrictive to economic activityoverall. very little of it is subject to a variable rate. we think the economy takes higher interest rates and markets very well next year. >> do you think that's true, ellen, even if we get a consistent 200,000 jobs a month? at what point does that put us back into a more familiar, more traditional upward rate hike path, you know? those numbers at least have been pretty steady and reasonably

strong lately. >> right we've been getting just enough wage growth, you know, to strengthen the fundamental picture, but not so much it makes policymakers nervous. what you raise is the biggest risks to the fed having to -- and raise rates at a quicker pace. so far we just have wage gains at the low end of the income scale. we haven't had wage gains broaden out to higher paying industries, which is what happened to 2005, and then it suddenly shot up, and the fed had to really -- well, they were having real heated discussions around a faster rate of hikes then, because in response to the stronger wage growth. this is janet yellen leading those talks -- you know what? the labor market is tighter than we think. we get a sudden turn in wage growth. at a policymaker you may have to abandon that gradual promise. as yet we have not seen strong

er very slow slog upwards, which is just enough to give policymakers comfort but not make them nervous. >> again flies in the face of the narrative. hang on, everybody. let's get to an earnings, speaking of high spenders on restoration hardware, seema mody, the high-end furnishings player is a beat on the bottom line, 65 cents x items. revenues, though, a bit shy of analyst estimates at 532 million for the quarter. it's been a challenging year for retail, the stock -- but on the back of this earnings report, the stock higher by around 6.5%, of course as the company that went public in 2012, again this year down, but sin going public, higher by around 150%. back to you. >> thank you, seema. steve, are you shopping rest race hardware these days? >> definitely some activity i've seen. i cover 55 of the biggest global

accounts, so i have a mix of mutual funds and pension funds. hedge funds are always playing in this name. i definitely see them sniffing around on the buy side. but like i said, people are starting to trade a lot less gull to december for the first time. i've been on the floor for over 20 years now, and i'm seeing people cut back a lot going to year end. >> something epercentaging this year? >> that's right. >> stick around for a few more weeks, thank you for joining us this afternoon. >> thanks, kelly. we'll see more at 5:00 p.m. today. our next guest says the deals won't slow down. up next the two buyout predictions, and the self-driving car in the works for ford? ceo mark fields joins us first, that's later on "closing bell." you're watching cnbc, first in business worldwide. premium like clockwork. month after month. year after year.

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specialist at breen capital. great to have you with us, how big a number are we talking this year? >> well, thanks for having me, kelly. i think next year will be a great year. i'm sure, like you, i hear a lot of different opinions on this topic, and, you know certain investment bankers opinions are based on their activity and what tier seeing at respective firms. i here many pea asset we're riding the end of an m & a wave. i think valuations will rear main high, as you mentioned in the opening, i just sonde sigh any kind of cat lick, or derailing this m & a train. do you think the m & a at this time is feel mere confident

about the economy and the visibility or they're more trying to find growth somewhere in a very low-growth environment? >> yeah, look, i think it's the latter. i definitely think it's the latter, especially when you look at the dow/dupont deal. obviously you're seeing the end of an era with regard to the chemical com glom rat. the activists are getting what they want, cost cutting and the like. i think the deal like goinged and alphabet, it creates simplicity. opportunities for both, which is what you want. obviously simple a good. you know, i don't think this deal will be a breeze by any means. you know, i think they're going to have to work closely with regulators to get a deal done, but there are some overlaps, so i expect to see some divest turs there, but i don't think the regulators will block this at all. >> maybe because this has been

the character of the mergers, bolting things together that are lightly more official. you don't see a lot of bidding war or private equities coming in paying fat premiums. i wonder if in fact the yesterday that m & a ends up bug a support will continue to play out. the market is flawed for about a year and a half now. >> look, i think companies are looking for growth. i think a lot of times you don't see a lot of deals in the front of the "wall street journal" or online of smaller deals that are happening within particular industries, but i think that guess to the broader question of regulators. i certainly this is a lot of people where the regulators are being a bit strong handed, at&t, t-mobile, things like that, but i don't think it's the the

regulators coming down on companies or trying to stop deals, because they don't really have anything to gain or lose by doing that. i think it really is the environment changing around the regulators, and i think you're getting more trying with concentration and the regulators are taking a step back and determine whether or not there's enough competition in each. >> so gene, do you think we go above 5 trillion next year? i think 2016 is going tore bigger. i'm very bullish on 2016. i think those are going to lead 2016. >> thank you, gene, for joining us. >> anytime. >> amazing. ine you recollecten from breen capital. over to a quick market flash.

>> jetblue shares are falling in after-hours shade after reporting preliminary traffic results. jetblue sees a key revenue measure for passengers decreasing in the -- it's known as a passenger revenue for available seat mile metric. again, the company sees this number falling by 2% to 3%. that's why ear looking at the stock down after hours. back to you. >> this comes on the heels we almost had a similar announcement from southwest. the question is, did something happen in november? all of a sudden did capacity shift? or did something happen with discounting? any thoughts to what we're seeing? >> for one, the stock was up today. you have winners and losers, southwest didn't report a good number, but almost at the all-time high when it reported. i would scale that delta reported a pretty good number and raised the high independence of its range for november. i think there are the haves and

have-nots. you have to pick. >> echos what our airline analyst said earlier. down about 3% at the moment. which pot lay shares rallies, as the company's ceo apologized this morning for the e. coli outbreak. we'll have in a coming up. genome sequencing could be the future of medicine. our meg tirrell had hers own sequence. she'll tell you the results next.

welcome back. just how much do you want to know about yourself and your dna? genome sequencing are in that exact business. meg tirrell decideding to her own dna mapped. >> we're here because you're interested in getting yourself sequenced. >> reporter: if you had the option to know. >> there's no-month-old recommendations that support this, so we're on the cutting edge here. it's perfectly legal, perfectly ethical, but something you should understand is kind of novel. >> reporter: earlier this year i set out to have my genome sequenced. i didn't know what i was going to learn. i get it back, the blueprint to me, but the biggest question was, was i prepared for something care,? >> thank a moment to think about this now and decide if this is what you want to do. >> i think i want to see it all i got it mapped from illumina,

for $2900, a personal guys to my own dna. it turns out getting it sequenced is a lot like any other medical tests, with the program you go to a doctor's office, give a family history a physical exam and blood drawn. where it's different is what we can draw have the results. this was a concern for higher risk for cancer, heart disease or alzheimer's. did i want to know? the answer for me is yes, but i discovered the results could raise just as many questions as deliver answers. >> meg joins us here. what were those answers? we're dying to find out. >> i have everything here on this thumb drive. this holds all of the ways i differ from you guys or any of other people. we're 99.9% identical. it's only in that tenth of 1% we're different. it potential can be scary or hopefully useful.

what i found was sort of in between. it wasn't super scary, and wasn't necessarily super useful. it turns out i have one clinical significant finding, fact factor-five lighting. it means my blood clots slightly faster, i only have one copy of this gene, and what dr. green at harvard medical school told some means i'm sikes estimates tore likely to have a blood clot as another adult. but the risk of my having a blood clot if i didn't have this would be 1 in 1,000, so now i'm 6 in 1,000. it's not a huge looming thing over my life. ed recommendations they are are exercise, eat well, maybe stand up on planes, walk around a bit. that's something i have started to change if i'm in a long car ride, i will kind of think about this, but i haven't made any huge changes to my life.

does dna change. in five or ten your could it be different? >> that's a fantastic question. it's probably not so much our dna would changes, though there are environmental change -- but it's probably what we learn about our again knittic that would change in the next five to ten years. there's a lot of ambiguity that comes back from these human genome sequencing. i have variance of unknown significant. >> sounds like a band name. >> it should be. >> there are things they don't know exactly whether they're important, i had one called lynch syndrome which i predispose me to cancer, but my genet cyst said he didn't think it was important to think about. >> who's going to pay for this? it's very expensive venture, especially if you're relatively

healthy. will the insurance companies embrace this? >> major questions about whether we should be doing this. right now the test cost me $2900. cnbc paid for it, probably most of the times employers won't be paying for it. insurers probably won't reimburse. this is more widely used, if we can call it that, in cancer care and diagnosing what they call the diagnostic odysseys? , but we need more clarity on that. >> we're glad of a relatively clean bill of health. i still have goosebumping, but it could be much more commonplace. thank you very much, meg. time for a cnbc news update. >> here's what we're watching at this hour, the senate is approving a stop-gap measure to keep the government running until next wednesday.

the how is expected to vote on the measure tomorrow. a associate of jared fogle has been sentenced to 27 years behind bars for producing child importantographer. russell taylor begged a federal judge for leniency in a tearful address to the cord. he had been the director of the foundation. the british government has delayed a decision on whether to build a new run wahle at heathrow, arguing that airport officials need to provide more information on environment concerns. business leaders argue that britain needs more errant capacity to keep that you are economy growing. john madden was released from a san francisco hospital after undergoing open-heart surgery. the nfl says he's expected to make a full recovery. that's a cnbc news update at this hour. back to you. >> thank you, sharon. will the current recession end on 2016? art cashin has thoughts. we will hear them next.

coming up ford's ceo mark fields joins us with his take. stay tuned.

welcome back. let's start with a news alert on united technologies. seema? >> we have three updates.

first it's raising the low end of the 2015 guidance by five cents to a new range of $6.20, important to know this is below wall street consensus. united tech is also up to the 2016 revenue and earnings outlook, but this is also -- this guidance has also fallen short of wall street consensus. third announcement, a 1.5 billion restructuring plan to -- that would be implemented through 2018. on the back of in news, united tech slightly higher. >> thank you so much, seema. keeping an eye on those shares. wall street is in a deep profit recession. could that reverse course in the new year. he's here with the highlights. >> and we did a lot of research the important thing is, a lot of questions.

>> i would have thought history tells you over several quarters, the profit margins begin to regress competition are beginning to slow in china again, so i think there will be pressure on profit margins. that will naturally lead to further pressure on earnings. revenues will continue to be a problem. people have lost on revenues, but managed to beat on the bottom line. that's going to come under real pressure. >> we keep saying this year after year, you can't cost-cut your way to prosperity, yet they keep finding ways to cut cost, even though the revenues haven't been growing at all. >> yeah, there's a law of

diminutishing returns. a great company like ibm, they haven't seen a revenue increase in five years. granted, they're turning themselves around, going watson oriented hardware oriented, but that having been said, this is a difficult time. the multinationals, we don't know what the fed will do when they finally hike rates. >> is there any chance that profits may improve, if only because we had a 60% decline in revenues for other companies themselves. that's a major reason why overall the numbers have been negative. >> there's no question it could stabilize. as i said before, my feeling is the weakness in petroleum will continue into the early part of next years but not into the end of next years. they will be able to do a couple victory lapse probably at the

end of next year, because they have cut costs drastically enough. >> this whole story about revenues coming in lighter than expected is continuing today. we just had the adobe central bers. they beat on the bottom line, but the tony line was just short. remember autozone. great companies, great numbers, costco just recently, same story, beat on the bottom line revenues a bit short. these are the first three companies, by the way that reported a november quarter. >> what would you say, though, to that? >> oh, it's stock by stock, industry by industry, right? retail, we know.problems, there are winners, losers, right? there's currency. in terms of industrials like utx, they've had problems for years and they're now starting to right-size the company, but they too have currency issues. tell be important to see what the organic growth is.

that's what people are looking at. people have been talking about peaking margins for the last four years. if they can keep it stade,and you don't have as much pressure in the currency, a bit of help from the oil, maybe it's not as gloomy. >> about 10.5%, i think -- >> but that doesn't mean they can roll over. >> i love it. just like we said, the look and feel of it. >> i love the research part. >> it's a perk, if you will. >> an extensive research, even tonight. there's more on cnbc.com. ford just announcing it's investing in electric vehicle solutions. the company's ceo will join us in a first on cnbc, right after this. why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night.

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welcome back. ford amping up an energy push for 2016, saying it will invest in an additional 4.5 billion into electrifying -- phil lebeau joins us with ford's ceo first on cnbc interview. phil? >> thank you very much, kelly. i am joined by mark fields. you just announced a huge investment, 4.5 billion, a the 13 models electrified models by 2020. some people will say doesn't this seem like a strange time to be doing this? >> absolutely not. we're building or electrified leadership, and it's -- even with gas prices low, fuel economy is still really on people's minds. they also have short memories,

they know it can go up. it's down right now. >> that's the next question, so much is driven by you've got to get to the higher epa standards by 2025, not only that, 2020 in itself. any concerns of meeting those goals? i know not every vehicle will be there, but the fleet average. >> part of that process was to have a midterm review and what we agreed to the one national standard, we said we were going to look at customer acceptance, look at the cost, the impact of jobs, so we're looking forward to that review, but overall, electrification will play a big. >> it's here, it's not going away, no, and we're embracing it from a customer standpoint. we think that's what they will want. >> a couple notes from fed

regional offices over the last week and a half, have talked about the possibility that we see a pullback in auto sales either because you are pulling forward sales -- not you ford, but the auto industry -- or because we have higher interest rates. what do you convey in terms of what you're seeing? >> first off, what we convey is when you think about all this talk about a higher interest race, first after, let's take a deep breath. that means the economy is doing well. the labor market is doing well, they're having wage and income growth. that's good for the car business. as long as the rate increases are great, we think it will continue to support very healthy sales. >> you do talk with janet yellen. without any personal details of those conversations, give us some sense of what she asks you about? >> we immediate with her on a fairly periodic basis. she's a great listener. she asks a lot of questions around what's happening in the

marketplace, what's happening in our dealerships, what's happening in terms of wages. they're reaching out to the private secto to help them make the decisions they make. >> you've had the lead going back to at least 2009, but this year you may not be able to catch them. how much of that were you saying we gave up some sales. >> when you look at our f-searcy. but you combine -- >> you know, can slice and dice it any way you want, but when you look at the name place we've been the leader for 38 years. the great news, the new f-series is doing great in the

marketplace. it's going from strength to strength. the retail market share is above our pre-changeover from the old model, and customers love it. we're building them as fast as we can. importantly we're getting high transaction prices for them, and customers are really satisfied. >> where do we end the month? >> it would be a good month, a good year. >> 18 million? >> there's a high likelihood we'll set a record this years. >> mark fields, ceo of ford motor company joining us on a day in with a big announcement. >> thank you both. steve ellis apologizing for the e. coli outbreak at multiple restaurants. >> it's a really tough time, but first i have to say i'm sorry for the people who got sick. i feel terrible about that and we're doing a lot to rectify this and make sure it doesn't happen again.

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>>. >> welcome back. shares of chipotle were popping

today, closing higher by 5% after the founder and co-ceo apologized for the e. coli outbreak in many of his company's restaurants. >> i'm sorry for the people who got sick. they are having a tough time. i feel terrible about that. we are doing a lot to rectify this and make sure this doesn't happen again. >> a lot of damage has been done. stock prices dropped. double digits since this began in early november. that is a big loss on the bottom line. two parts. financially, can the company recover? >> well, certainly. that's not what we are thinking about now. we are thinking about the safety and quality of our ingredients. >> the interesting thing was the way he framed this going forward. wanting to make chipotle the safest company in america. is that the right focus here or should it be pivot, find something else to get consumers excited about? >> no. i think it's very important for

him to be out there talking about the safety so people can regain the trust. then talk about the stock. there aren't going to be that much in terms of earnings next year. i think he did a good job. he is trying to rebuild confidence slowly. >> i think it was a good job, but i think it was necessary to undo the perception that management had been relatively cavalier and callous about this whole thing. i think it's the mandatory approach. you have to do that first and make the gestures. what we did in the market was got back $27 in would be week's decline out of a $200, two-month decline. >> what do you think they should have done differently? >> i think it was more the messaging instantly. the instinct was we haven't

figured out anything yet, don't pin this on us. we closed stores because we had to. they weren't trying to say we get this. we have to get our arms around this. >> enough to send the shares higher today. is taco bell seeing increased traffic as a result of the e. coli outbreak at chipotle? greg creed will be on "squawk box" tomorrow morning at 8:00 a.m. adobe reporting earnings after the bell. john fortt talk to the ceo about the results. we'll bring that you interview next. on apple, the man who says buy gopro or tesla will explain at 5:00. (exec 1) well, directv beat us in customer satisfaction

again for the 15th year in a row. but we have a plan. (exec 2) when our customers are on hold, let's up their satisfaction with some new hold music. ♪ (exec 2) that's glenn from the mailroom. he djs on the weekends. (exec 3) sorry, who is it? (exec 2) it's glenn, from the mailroom. he dj'ed bill's wedding.

(exec 3) he what? (exec 2) he goes by dj glenn, he works way downstairs. (exec 3) what'd he say? (exec 2) glenn, from the mailroom! (vo) get rid of cable. and upgrade to directv. call 1-800-directv. welcome back. adobe reporting fourth quarter earnings this hour. john fortt talk to the company's ceo about the results and has the details now. >> we are the only ones he spoke to before the earnings call. i asked him where he saw particular strength during the quarter. >> across the board, creative cloud we saw strength in the education segment. we certainly as we deliver more innovation are driving more

distance from cs, so the need for people to move to cc is more compelling. the photography plan continues to do well on the creative side. to your point though, international expansion, we talked about international lagging. now that's accelerating. the company's firing on all cylinders. we are certainly in the sweet spot of what's happening in the industrial. >> he is talking about cs and cc, saying people feel the need to upgrade and get on their cloud subscription product because their older products aren't enough for what they want to do. that's good news. what he is looking to do now is grow share of wallet. getting people to buy more within the subscription plan. they bought a stock photo company called adobe stock. they are on plan a year after buying that getting people to adopt that. you see the stock trading up after hours better than 5%.

>> what do you make of this? >> would be an all-time high. it's one of the most unsung of the big connect growth leaders, up 200% the last five years, 65% two years. these stocks making new highs are all these platform companies, visa, facebook. once you have the platform, it flows through, i don't know how much to pay for the stock. >> 25 times forward estimates that are probably going higher because they are doing more in terms of subscription and incurring revenue. if they can grow 25% to 30%, i'm willing to pay that. we done it, in full disclosure. not only the platform companies doing well, but cloud. it is living up to this expectation and the hype. sales force, red hat, adobe, these are the names. this is where people are spending money. >> and they've got to get with the program. other companies who are getting it right? >> looking for other companies getting it right?

>> that was my fault, john fortt. we'll leave it to "fast money." >> we'll talk about winners tomorrow. >> exactly. "fact money" begins right now with sara he's nen for melissa lee. "fast money" starts right now. live from the nasdaq market site overlooking times square. i'm sara eisen in for melissa lee. twitter surging after announcing plans to deliver for users without accounts. >> apple to buy gopro, maybe even tesla? you won't believe what other names a top analyst says the tech titan is looking to add to its shopping list. >> call it a burrito bounceback, the ceo addresses the