crude oil. this is what has been driving k equities all morning long. continue to watch that board closely, natural gas still down by 5%. the yield on the ten year treasury hanging in there. we're watching all of this "squawk on the street" will take you through the rest of it. join us tomorrow, now it is time for "squawk on the street." good monday morning. welcome to a big week. a two-day fed meeting where wee could see the first hike in nine years. high yield, crude oil, nat gas in china. oil back here broke below 35, it has rebounded somewhat after the worst weekly loss in a year.

our road map begins with a $13 million merger. we'll bring you the latest, rubbermade buying jarden. and loeb versus dow, what does the cope have to say? we have the story. >> and an apple bombshell the first ever decline in iphone sales. futures volatile here, oil prices as we said fell below 35 for the first time since february of 2009. in the mean thyme, cheniere replacing their ceo. and in another management shake up, david barce is out at third avenue management after the collapse of their junk bond firm. a story that is likely to repeat. >> i won't over their portfolio last night. there is two issues. one is it is a mutual fund,

you're supposed to get your money back. that is what jarred people. second, i think i may have found the world's worst investor. i looked at 55 issues they had. there was four that i would think are of some value. >> how does that happen? >> you're an idiot. >> you know energy names and -- >> it's not just energy. other than health care, they really just decided -- if you set out to own the worst pieces of paper with the idea that these are all high yield so maybe a quarter go under and we'll be all right. this reminds me of a fund like the norwegian -- where did you go -- >> i went to norway. >> this is a fund that bought like every bad phoenix housing,

california inland empire, it is embarrassing. i know they're distressed, but american eagle, claire stores, advanced micro devices. the company that vetted snowden, bad call. even oklahohomeland is better t that. leberty fire, that fire, they're still trying to put it out. they have iheart communications, which i do not heart, but i have to tell you -- this is it. this is the bench mark event, it doesn't matter. >> he is like okay, see you later, don't come back. >> 27% down, but when i ran my fund i decided after like three years don't have anything you can't price. this stuff is not priceable. >> but he doesn't have to give

back the mansion in east hampton though? >> does he have his wheels up membership? >> he said a significant part of his own net worth is in this fund. >> okay, so he is financially suicidal. >> this is horrendous. >> it is, but it had a huge impact more on friday than thursday. . it really worked it's way into the market on friday, into the junk market overall. we started a conversation about energy. some of this starts with energy, starts with a reversal, starts with the fact that these credits have deteriorated so much. and it comes back to liquidity. as opposed to whether or not the credit of a particular company is good or not. it is liquidity first, default risk second. what also has happened is talking about on friday where

guys can't sell underlying positions so they short the indexes, they short the etfs and they get short in the equity market. >> you could short some of these, some say that like common stock may be at ten, and then it did a reverse split and it is back to one. i would say ten cents on the dollar for most of these things. you will can't principal them. you can't hold one. >> when you call it the bench mark of bad. >> it is not a hedge fund, you can't lock it up. the other is that the actual purchases, i know it is distressed, but this is beyond, i mean honestly, someone should be very ashamed. i would not let this person back in the building. >> they are, he is gone, not

allowed back in the building. all of that said, the real question is is this a unique situation where people may be over reacting in terms of what broader spread is to high yield and equities? high yield, you're talking 9% now is the overall rate. energy is higher, commodities are higher, do you have a lot of retail investors that look at these funds and say i'm out? i want out. you had two billion pulled on thursday alone from some of these funds. >> i think this is uniquely horrible. i think they had to sell the good to fund the bad. i don't know anyone that could be this bad. i don't know what marketings are of the bad funds. if i was the fcc, i would have called these guys and says what

are you valuing -- how do you value the hercules off shore. they have a lot of energy firm that's are not that good. >> meanwhile, these were all impacted by the fall in oil that were down 35%. watching it this morning -- and the overall market seems to be reacting -- >> yeah, but they have that piece of health care, they have inventive health, and they valued that -- it is good, it is a list of page after page page of page, inventive health might have been worth something, rule metro, liberty tire, check it,

just for a few giggles and something else. it really is. did the guy, if you threw darts -- well, darts could outperform it. the markings on this, this is older, but where they mark the pieces of paper, where they said that might be, this was not the bid side. it is a travesty and thank heaven for the eagles, because this would have ruined my weekend, i feel so bad for the individuals in this. i don't think any fund could be actually like this. that selected the worst -- >> do you agree that whether it is through icon or anyone else that the investors were warned? >> there is a seen in "the shield" a show where a guy takes

millions of dollars from a money train and he puts it in a f furnace, that had better protection than this. that's what they should call this. >> let's move on to friday, i can confirm all of this, calling on dow chemical to get rid of andrew, loeb sending a leader saying he wonders if the deal was rushed. hi is prevented from speaking publicly about the company. we interviewed the ceos on friday, and we asked them about the timing of the deal in light of that stance. >> mr. loeb has a chance that expires soon, was that at all,

did that figure into how you went about doing it. is it a pure coincidence? >> i wish i was that good that we could bring together this massive transformation, between dow and dupont and the corning deal today. that deal itself would get a lot of attention. could i put together two deals like that to arrive on the day, i would have to be a magician to do that and i'm not. >> in fact, it is unclear exactly what it is that mr. loeb is after here. he succeeded in getting two board members, if you will, who both came out strongly in favor of the deal, one of whom fired back at mr. loeb. i did ask about whether he would take over the materials company.

remember these two companies will get together. then it will be 18 to 24 months later. it is more or less indicating no. now i'm hearing, jim, from people close to the board that the answer is definitively no. this is hit for andrew, he will go off and pursue other things in his life. he will not run materials. we'll see, they don't seem to know who will run the companies. as for the motivations here, other than getting us to mention his name and note that he was involved somehow, perhaps in helping move this along, is it a

coincidence? >> it is not clear to me, he doesn't like him and they don't like each other, and he is happy to tweak him when he can. >> he said it was laughable that this had anything to do with the trance -- >> and that was one of the gregters put up by -- >> steve miller, this may be the most gratuitously mean public statement i have come across in a long time. >> maybe he was up set about the positive press -- >> you know how i say a lot of ceos are nice guys? loeb is not a nice guy. you don't want to be on the other side of anything from him. maybe just the other side of the street.

loeb, wow -- >> when we come back this morning, a consumer good's merger involving lots of names you probably know. we'll talk to the ceos about their $13 billion deal. we'll look at the stocks trying to come back from the worst week for the s&p since august. a lot of sell sign calls on tesla and more. we'll get to it when we come back.

rubbermaid buying jarden and the new company will be known as knewell brands. were going to talk to the executive chairman later on "squawk on the street." 120 brands, and with this deal, we're at over $100 million alone. >> some of this is motivated by cheap money, but a lot of it is being able to have control from the big box stores and big discounters. i like the deal, i know that

knewe newell gave up some stock. at the same time, i think they're going to try to say works well with sharpie, i found it quizzical. i see a lot that is good about it. >> take talking $500 million in synergys which may be low. i think it was. >> you do want to under promise and overdeliver. >> these are great brands. elmers, and sunbeam and more. this is almost every major houseware aisle.

you will have a hard time finding stuff that is not this company. that is great way to be able to go to walmart and say i know you're trying to take every pen any we have but we have some brands, too. not all of them will be under the new roof. >> yeah, it is 21 in cash, jim, but the jarden shareholders will have a lot. but interesting, martin franklin built this company in the last 12 or 15 years with all of these different acquisitions and now he is making a decision. there is still time to say see you later. >> he was transitioning out. he is in the see you later mode, but do i think that jarden had

stock going higher on the most representative acquisitions. most of the acquisitions were blessed by the market. yankee candle was even blessed. he was on the board of yankee candle. i'm using a papermate, and this is a pedestrian brand, coleman, there are many things within newell that i think they can rationalize. mike seems very happy with the po portfolio. >> it is the last big deal of the year? >> i'm not sure, carl. it depends on how you want to define big. it is another dow/dupont? no, but they will take it right

down to the last minute. >> they can take that to the last minute and whoever comes out gets a beat down. in the old days, the stocks would be up, jardine is barely up. >> they moped a bit on the reporting of the potential combination, but you're right. and dow/dupont, we will keep a closer eye on them. we were first giving people details about the transactions. it is a difficult market right now. you have a lot of hedge funds now getting first quarter redemptions and they're selling now. >> i think they should. you really had to be in, talking about the number of stocks that were really good this year, and how much some of the s&p was produced by them. if you have the misfortune of owning something not part of the

anointed group, if you own two oil companies and your diversified portfolio, those could bring you down. >> when we come back, we'll count down to the opening bell. looking at the premarket here as it tries to repair itself from the earlier parts of the morning. more quake on the street from the street as we quick off a new market week. with the capability and adaptability of lexus all-weather drive. this is the pursuit of perfection. prge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works.

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capitalizati capitalization. >> this one is lower units, lowering fiscal year 2016 iphone units, this is that saturation. people just say smart phones are saturated. i found that channel checks done repeatedly were not right, but the stock has been in a funk. all of the company that's provide chips and anything within an apple here, you go with the corvo -- >> what about the larger academy of demand, the dwrogrowth of th market is very very slow. >> that is why you're dealing with a stock that sells 12 times earnings. one of the things that people have to understand is that you're not paying -- it is a big

cash generator. i don't know if the checks are right. china is still growing very well. i'm sure that there are many countries you can find that they need apple stores, but when you stel the sock, it is stock that is not very expensive. one of the great internet companies of our time. you look it over once again. it is the same reason that channel checks are affected here, and earnings drive the stock. >> it's not about that though, is it? >> no, the apple watch. i'm part of the itunes, i pay the fee, i have the watch, and people say they just don't have enough annuity streams. and that is what it is about. in the end it is just windows 10, for instance, and then

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you're watching cnbc squawk on the street live from the financial kcapital of the world. a lot to watch today and all week long. two days of fed meetings starts tomorrow. shanghai was up 2%. >> and before oil turns down, that had the market up. people thought that there was perhaps a turn. and the oil goes down, and the pajama traders just sell. >> the best numbers in china since december.

>> that is extraordinary. and then the train continues with rubbermaid and jarden. down 18% since that announcement on december 4th. here is the opening bell. down here on the big board today, it is bob mankof highlighting the release of the series "very semiserious." and at the nasdaq, ocular their p -- therapeutics. go pro, morgan stanley have seen something they don't like. >> yeah, i think people just say there is no price that they like. and they have another apple piece, but i mean go pro in the

end is what you're trying to avoid if you're jarden or rubbermaid. they are try and true and they're in your home, and go pro is feeling very faddish to people. >> meantime, some upgrades for names like hewlett-packard enterprises. >> they sat this out. they really did not distinguish themselves. it has been a fantastic stock, the management there is great. that is a stock there that is great. you don't have to be as cautious, that would be one that if it came down to it you would really want to buy it. a great company doing so many great things. >> coach, piper, they admit they might be early?

>> coach has done some acquisition -- they are stabilized management there. that group is obviously -- the group is under tremendous pressure here. the only one of this whole group of retail restaurants, the two were doing okay and that is chip chipotle. i think people are thinking they have $1,000 per square feet, maybe they will take it private, i don't know. . i have learned that the whole taking private something i is not something envogue right now. >> they certainly got a lot of heat on the last cycle. the idea of being the management -- what are you keeping from shareholders to a certain extend. why could you not deliver those things for us. that said, you only need to look

at far as harris so say that was a good sale. we mentioned at the top, but we didn't really discuss the fact that the guy who basically created this company -- it would be an importer and then it was an exporter, they're going down there, right? >> i think that invite was rescinded this weekend. >> got it. >> that invite to do on the first ship out, got rescinded. that is unfortunate. >> i know, it will be monumental. a great infrastructure project. >> he came on "mad money" and he said i'm going to build this, and he did it and he is within, i don't know, 30 days of the first ship to go, and he has sacrificed. i thought he would hit the first

ship. >> and he walks away with an enormous amount of money or stock. and the board of directors thanks him for his entrepreneurial spirit. >> what's the deal if. >> carl icon got a few seats there. i don't know, the great thing, i know he made a lot of money, and he was in line with the shareholders, he did individually fete all of these contracts. he went from country to country. when oil was at 100, he said it would go down very dramatically. but no, that invite, the only way i'm going down to louisiana is if my daughter invites me. >> right now they appoint a board member as interim

president and ceo. >> widely respected. >> he was until about 48 hours ago. >> natural gas is down another 5%, you would think people wouldment to export from here. >> yeah, global warming, look, i think this was one of many that he had in mind to do, and i think he would have great success. there is a big fee to be paid. you have no idea the great demand. the europeans have been very late toic maing contracts with sharif and asian companies that needed it. there was an article a long time ago. believe me, there is plenty of demand. he is gone. . he is an interesting dresser when he was on the show.

he kind of dressed like -- kind of like, let's just say a man of a world might dress. he looked like a bond villain, but he wasn't. >> at least he wasn't then, maybe that is a new career for him. >> i expect to buy, right? >> i expect you to die. >> please don't put those two -- >> speaking of nat gas, the forecast for temperatures in this country, east of the rockies, unbelievable. no measurable snow in buffalo this late in the season. >> buffalo lost to the eagles, so maybe that is what that is about. >> they're still trying to clean that up. >> did you look at the buds on your trees. they're fooled. mother nature is getting faked out like junk bondholders. guys who own these funds, how do

you like that? >> it is something that has to be watched very closely. keeping an eye on takeovers, and can probably put canadian pacific's attempts to acquire with no expectation that it would have been otherwise, norfolk southern comes out and says your revised, reduced proposal was dated september 7th, it has less cash value than your previous proposal, and they believe it to be grocers gross d inadequainad inadequa inadequate. it is not clear where they will go next. day will continue to push the idea of pugt the shares in a

voting trust. and norfolk tour ssouthern says not belief it would be approved by the atp. it would flult premature -- >> we mentioned the climate accord this weekend. and remember these rails are coal companies. third avenue had the worst coal company i have come across in europe. i don't want to say the rest of third avenue, but coal is the major cargo. but remember, coal is what they're aiming at and then

gasoline after that. for the climate conference, which a lot of people are saying had teeth. >> a lot different than copenhagen turned out. . and through 2100. in the meantime, dow is relatively flat about 16 points. mary is on the floor for us today. >> modest gains for the markets. traders saying the markets were oversold. and it was the worst week for the dow and the nasdaq in the last month. a lot of caution ahead of the fed immediating. of course they're also keeping an eye on energy. this has been what has been driving the markets. a quick check of the vix, a measure of fear, a big jump with all of the turmoil today we're seeing slight gains in the vix.

up just five now, it was up about 37 points. we're seeing weakness energy and materials today. crude oil remains under pressure. it has come off of the lows of the session. what we saw is that futures improve as well, and this is helping, again, to provide a little support through the markets in early trade. chesapeake under pressure. cheniere energy losing their ceo. they're down about 1.5%. we also want to look at wells fargo, saying there is some stress according to the financial times, they're down about a tenth of a percent. this as the banks in general and

financia financials. the energy sector was not distressed but they indicated it had not spread to some of the other high yield players at that time. so let's look at how a high yield etf is doing. we'll look at how it closed. and the stress they were under. third avenue, a lot of people saying what was in that portfolio is not what you would see in a typical high portfolio. it was not as risky as some of the hold iings that company had. also watching the merging markets which had a very bad week last week on concerns that the federal reserve will raise interest rates. right now a little turn around, and we end with micron, we're

seeing gains. paying over $3 billion to buy the rest. it was higher in the premarket, but it was lower in the early trade. we'll see how the rest of the day plays out. >> great, mary tompls hompson a big board for us, thank you. rick santelli, it will be a big week. >> yes, and many will want to look at various parts of the market. i'm looking at it like a bunch of tired joggers. those represent the sectors, and the joggers and runners no matter how tired you are, you behave differently when you see the finish light in sight. but we saw some equity

stabilization. so you see two year up four basis points. the long end is up five, tens, and thirties. the highest is the five year, and let's look at the one and two day, certainly showing we're elevated a ritle bit. so you want to watch and see what behavior is. traders may be a little nervous loading up on treasuries. looking at two-day booms, yes they moved up, but not as much. . it is recalibrated by ten basis points. if you look at bund starting in never, but let's chip to the yuan. it could be the seventh straight

down session. you see the move, july, 2 2011. so we will continue to monitor. november 1'd start clearly show that's this 110 level is something to pay attention to. everyone is trying to handicap what the fed will do. >> well said. oil got down to well blow 35. $35.59 is the last price i saw. >> more pressure in the energy complexion as a whole today. this is in line with the patterns that we have seen. the market is testing new lows and it continues to go down. a lot of people were thinking that opec was irrelevant, but

they're continuing to create a situation where the supply and demand rebalance is not happening. the national average for a gallon of regular is now $2.01. and gas hammered, a ten cent drop. this is really significant as well. i saw people buying christmas trees this weekend in shorts just to give you a sense of the temperatures that we're seeing for december are really not normal, quite mild, and will drive these prices down further if we don't see it get a little colder here, back to you. >> thank you, when we come back, a $13 billion consumer goods deal. we're going to talk about it. and then apple getting good news from taylor swift. those details are coming up. expect to see flip-flop action

before the fed statement on wednesday. we're back after a break. every year, the amount of data your enterprise uses goes up. smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.

more apple news this morning, taylor swift says he is will release a concert video from her latest concert tour exclusively on apple. apple changed course, paid the artists, and all was forgotten. he is talked about her dispute on an interview set to air on beats 1. he is was struck with a overwhelming fear of turning off my phone, and all of my music being gone, absolute terror hit. >> it is not a real surprise. she incredibly powerful. there are people periodically that are just at the top and he

is is it. in the end, apple, i still think is customer centric. i don't need to do channel checked to know that they're channelle centric -- >> content is king. >> you're going there, huh? >> why not? >> we'll get to trading with jim in a moment. we'll be right back.

it is time for cramer and stop trading. >> yeah, today is the day that people can roll out their coverage. they get a lot of buys and holds, and it is very successful. five buys and one sell. here is something interesting. the sell is from goldman sachs. they did not work on the deal, but i think this is the last of the ones that were kind of excited the market and did well. and i want to point out that square was a deal where they

those who price it. it does matter, they didn't try to get over on the retail investor. but that worked. and matches are pretty successful. and i want to do more of this on mad money. i want to give contrast to sell and buy. how does someone hate something so much and love it so much. sexy story match. content is king, i can have fun, too. >> you're not going anywhere? >> no, you will be back in the next hour. really quickly here, jim, on the fed, we have not had a chance to talk about a story in the journal this morning when they argued they will probably go back to zero within five years, and "the economist" says we would not hike at this point. >> i think the imf has been right all along. if you look at what is in that

third avenue distress fund, they seem to think job growth is good. and that does matter. >> so any of this high yield scare has not persuaded you? >> i think they this it is time. i don't think it is time, i think they think it is time. i'm okay with it because i want to get it over with. the people that think that it will be viewed very positively, that could be short term, it could be a relief rally. i'm okay with it, i just wish it didn't have to happen right now. if they want to normalize because they think we have good job growth, then they're filling that mandate. they're filling that mandate. so i think they're charter says they should hike even if i think they should -- >> even if during a week when, perhaps, high yield is in a real

tumble and spreading throughout high yield and even kind of over into the equity markets. >> of course the high yield is not as big as housing, and that is important. >> it's not small. >> no, you talk about a trillion. you don't have as many securities based on securities reflecting securities mirrors securities -- >> in the end we find out that the housing mark, there was derivatives that were trading. and they weren't in many cases. there are pieces of paper underneath, but it is extraordinarily horrible. >> get a cup of coffee, maybe, and come back. we'll seal you in a few minutes. we'll talk to the ceo-jarden coming up. and he would have wanted you to have it. it meant a lot to him...

yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.

good monday morning welcome back to "squawk on the street." take a look at the markets, a big week is shaping up.

the highlight will be the two -- day fed meeting. >> this morning, we have three big questions. oil hitting new lows earlier today. how will this now affect stocks? plus, is the high yield debt market weighing on investors as well. and we're now two days away from the fed decision. >> and coming up, rubbermaid buying jarden for more than $5 billion. they will be at the nysc. >> in the meantime, oil prices dropping now below $35 a barrel for the first time since february of 2009. jackie has more on what continues to be extraordinary moves, over to you. >> that's right, 34-43 is the

interday low. we will continue to continue to move lower. the momentum is to the downside. the supply and demand situation is pumping more. production is flat lining a little bit, bouncing around, but certainly not going any lower. the idea that opec was power less, not so true. we'll have a ripple effect across the energy space. seeing a bid today, so all oil trailers will be watching closely. that is bearish for crude oil. the national average for gas is $2.01. looking to see that drop below

2. another ten cent drop, 13 year lows for nat gas because temperatures are not that cold right now seasonally. so nat gas could continue to see more pressure. >> markets are relatively flat here. joining us this morning is fidelities director of global macro, it is good to see you, welcome. going into the fed meeting, has anything changed? is there still a green light? >> yeah, they do, the something enormous would have to back away. so they have basically a free option to raise rates for the first time in nine years and i

expect they will take it is it in the same -- how do you think about it? >> that really from a market point of view is really the question. is this like northern iraq in 2007, or the kind of headline you see at the bottom. and we don't really know yet, but what i look at very closely are credit spreads for the energy sector and high yield, and on friday those are higher than 1400 basis points. and one cannot recover without the other. energy spreads, as well as the broad dollar, are the two major indicators that i'm looking at. >> as investors have read about,

people at home reading about over the weekend, there is a concern of a run on mutual funds. how -- i understand that you would come back to some technical metrics and say i'm not worried on the basis of this which is what i think they're saying. how worried should people at home be that is gets out of control. >> so ultimately, the fundamentals are going to win. the overall yield to maturity on the high yield index is almost 9%. so if you're buying a high yield index, you're getting a 9% yield. so at some point, it says the fundamentals will be so compelling, and they will pick up assets that are really, you know, too cheap for where we are in the economic cycle.

even when you strip out energy, spreads are still 600 points over liquidity. but even then, you're looking at pretty good yields. so you're getting value. >> you don't think people want to cash in the chips and leave the casino? >> no. they have higher yielding assets, and the fed will probably tighten this week but they will probably go very slow beyond that. at some point, cooler heads will prevail and investors will look at where we are in the economic ikele and say a yield of almost 9% with very low defaults, et

cetera. >> the other major dynamic is the falling price of oil, aren't people going to lose their shirts, maybe private equity will come in and buy up the assets. there will be casualties, surely, along the way. >> that's why high yield energy spreads are at 1400 over which is a huge number. and until those spreads start to come down, to anyway is a sign that the stress continues. the question is at what point does that price get put fully into equities and energy debt and into the price of oil itself. that has not happened yet because oil is still making new lows. >> there are parts of the economy that are in recession. can there be a knockover effect

from all that we have discussed to that huge service in the country, or does it carry on unabated? >> we have everything from the global growth cycle and china is essentially doing a stealth evaluation of currency. the yuan has gone down without any fanfare at all. all of the global trade oriented sectors you can argument that reflects a lot of weakness. so a lot of good sfuf has happened there, and fobviously there is a big tax cut. but the stuff tied to the global cycle has been -- >> so your view on 16, not all

that hot, fair to say, right? >> when i look at what can go right and what can go wrong, i think there is a symmetry for risk and reward. when you look at the consensus forecast, in 15 there was a big gap for overall earnings and x energy earnings. so if you could discriminate between sectors, you have probably done really well. growth is up by 12,000 basis points. if oil prices don't recover quickly, then there will be another gap opening for at least the first half of the year. so if you look at the consensus earnings, so oil prices have to come up pretty quickly for there not o to be negative -- it mean

earnings plus dividends and 7 plus 2 is about 9%. and if it disappoints you get another ho hum year. >> thank you very much. good to see you. up next, we'll talk about third avenue management. talking about the closure of the junk bond fun and more implications for the market when "squawk on the street" comes back. working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this.

major questions about what are calling carnage in the junk bond market. barclays high yield bond funds, the etf bond fund, sitting at lows this morning not seen since july 2009 after it's biggest one-day fall in four years on frida friday. don is looking at another high yield junk bond. >> yes, there is one that is

getting more headlines these days and that is the ishares i box etf. it is the biggest high yield junk bond exchange traded fund out there. it has about $15 billion worth of net assets. what it does, like with a jnk, the spider high yield fund, it tracks the index. there have been questions about why do they go into etfs and why are they being beaten up so much. it is for good reason. we want to point out that these particular etfs do not track distressed assets as much. 90% of this portfolio has a rating of b or better. half of the port foal joe in the highest rung of junk bond or

noninvestment rating. and only 0% is in the more speculative or distressed in terms of the total credit quality. what about the sector break down for this particular etf? there has been questions about whether or not energy plays a huge part in it. it does have a huge weighting. however, the bulk of these holdings for the bonds in this etf are in telecommunication companies. so about half of the total hyg, that is the etfs assets are not in energy, but just in telecon on consumer related companies. so between junk bonds and investment rating, they track higher for awhile here, but now

the divergence is getting big. so how much of the action is driven by fundamental views on high yield or junk bonds and how much it driven by mechanics in the market. so simon, there are a lot of questions out there and basically, in many ways, about the credit quality and whether or not this is a crisis type of situation. many fund managers talk to me and say this is not a driesz, but just indicative of the high yield market. >> let's bring in dan, u.s. bank wealth management, how is the market today from your h perspective? >> we respectfully disagree with some of the markets just made. we think this market on the downside has further room to run

and here is two fundamental reasons. one, in a lot of cases these funds are down 6% or more and that will accelerate tax loss selling. as reviews for off setting capital gains are done, you have an area say energy stocks that clients will go to for tax off selling. that adds to the ill liquidity that we're seeing in the market. i think the market is more liquid, even in some of the higher names. they don't get sold last, they get sold first. and that's where many of the managers can go for these high yield funds. >> and the basic problems are the elements that make up the mutual funds as well. they are difficult to sell, but the funds are open so people,

from a top down perspective might think let's take the losses now, which exacerbate the situation because then those operating the fund are forced to sell and the whole thing spir s spirals. so how important will the news this morning for how retail investors decided to act over the weekend as they read about this, how important will that become to the die nynamics of t market throughout the day. >> we think this is not over yet. it will continue on through the year end. we think the fact that the fed is raising rates, that doesn't necessarily help. that, typically once the fed is in a tightening cycle, so that is negative for high yield all of the way around. so we want today so a capitulation move and we don't

think we're there yet. >> some people think this is a seasonal effect. >> i don't think it has anything to do with seasonality. we got a preview of what could happen back in august and early september. as your commentator mentioned earlier, we saw big i ddivergen happening several years ago, they diverged dramatically. investment grade spreads basically stabilized. we don't think this is seasonal at awe. >> what is the advice thoen people who have not sold, in these things, what is your advice to them? >> i think more important than anything, make sure you pop the hood up on the fund or the etf

to understand what is underneath there. make sure you understand the exposures, the credit quality, and if the fun is levered or not, and review the holdings. if you have a small allocation, perhaps now is not the best time to sell it. but if you're over exposed, i think you should start reducing that exposure to a more reasonable weight and then wait for a better opportunity next year. >> isn't the point of this conversation that you're not getting decent pricing in the market. the value they end up getting nor that may not be in their best interest. isn't there an argument to say wait until the dust has cleared. >> i disaagree, i think spreads have potential and default rights are no going in your favor either.

there is more room to go on the downside if this market really becomes rattled. >> he talks about the dilution of liquidity in the market. that many people would have been over graciously -- do you think it has been a repricing, or is this a singular event in a relatively small part of the market? >> i think in markets like high yield, good times or bad, i think high yield yields got too low relative to the risk of this

provile. when you look at an asset class, it is a re-examination of where those markets go and how they're packaged together for investors. >> this is no doubt a busy time for you, we are thankful for had you sparing the time . >> when we come back, just two days before the fed decision. in the meantime, starting to fish tail a little here in the markets as some relatively big interday swings early on, back after a break.

as we wait for the fed decision this week, we're

looking at how hawkish or dovish people are right now. >> we know the fed would get more hawkish, at least the voting members, but i wondered if we could measure it, put numbers on it, so i'm pleased to introduce here, our fed survey, the hawk/dove index. we asked how hawkish or dovish the members are. so like at the 2015 board. we will start here where there is stan fisher and lockhart get five. moving here, you get jay powell, and there is yellin, dudley, and

t tarullo. and you have to go all of the way over and you get jeff lacquer. he is a 7.8. if you would not mind, take a wide shot here and we will show you how 2016 changes here. you get rid of jeff lacker, and you replace him with three semihawkish members, so if you would go to the wide shot again, you have a board that was about a 4.3, and now you're about a 4.7. still net dovish. first of all, your most dovish is charlie evans. most hawkish is jeff lacker.

then we'll show you another way to knock this out, and the governors, 4.1, the regional presidents average 3.2. so you see the change there. a little bit more hawkish here and that really gets at the issue of how many rate hikes we will see next year. simon will have more tomorrow when we have 9 full results of the fed survey. >> i have a question for you, steve. a lot of people believe these dots they come out with, that show how interest rates are rise, the market does not believe they will rise anywhere nearly as fast and they will have to come down, when the new hawkish guys get in, will we have a new set of dots? >> that is a great question. everybody's dots are in there voting or not. what will happen is the dots of the voters, which we don't know

who is who, unless they tell us, some do, some do not, the net dots or the average dot will be a little higher. that's why we measure this. what will happen is this fomc will have a higher average fed funds rate for next year. i would point out that the market has been right on this and not the fed. the fed has come down to where the market is and the fed is not necessarily the way of leading the market here. >> i guess that is what they call dependency. >> straight ahead, a conversation be jarden's executive chairman, and the ceo of the new newell rubbermaid.

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i am sharon epperson, here is your cnbc update. president obama will meet today with his top military advisors at the pentagon. >> the u.s. embassy in turkey is running on what they're calling limited organizations. they're urging americans there

to be vigilant. it is a day of remembrance in newtown, connecticut. marking the anniversary of a mass shooting in an elementary school that took the lives of 20 children and six teachers. russia said they believe a bomb talk down the air bus play -- plane back in november. back to you. rubbermaid moving lower this morning after they announced they bought jarden. they will merge brouands like yankee candle and mr. coffee with brands like irwin tools.

let me start with you, it seems like a fairly straightforward question. you have an excellent growth right right now, but why take the risk of a large deal. >> i would say both companies are performing very, very well. we have come to this combination forest fire a position of strength. this is the right time to do this deal. it is very clear and very compelling. so as we sustain momentum in the business, there is tremendous opportunity to play for the upside in the combination? >> what makes @ right time? >> both businesses have momentum. we have great energies between say a graco and a nuk.

or food storage and food preservation. and there is a number of great intuitive combinations that will unlock the value. and because they have momentum, you don't have to worry about any under lying issues in the business getting in the way. >> i know michael was on our show recently, about i wanted to congratulate martin, i have known you since before the inception of jarden, 4300% since the company was founded, why now? i mean how can you part with something that gave you a 4300% return. >> as my dad used to say, timing isn't everything, it's the only thing. it is the right time for jarden. if i didn't feel that we could

get to where we want today ed t faster, then we would not have done it. if we had the multiple and the market cap, we could be the buyer. we want to drive value. >> i was wonder whether that last quarter when you came on, i was wondering if you just felt like you would get more rewarded teaming up with newell that has a higher multiple than you can alone any more. >> yes, the magic number is 500 million in synergies. >> martin, you know, we talked about many people who followed your career and made a lot of money as a result of that and they see this as something of an exit for you.

the long steady build up of a portfolio, and then an exit. >> if it was an exit, i would not come on the board or roll half of my shares. i think will be the largest shareholder in the country. >> there are capabilities that are strengths for newell and other capabilities that exist in jarden that we're going to take advantage of. >> they're built a better direct to consumer model. and that is a great capability that moves from jarden into newell space. our graphic design is creating tremendous innovation value for us today and i think it is fair

to say that martin's business can tap into that. we will create a set of enterprise wide capabilities, and we will apply those for elevated bmpls. it is strategicaltr strategical. because of the intuitive brands that we were talking about earlier, and because it releases the value. there are more synergies that will be unlocked overtime. today that is 5% of the combined asset. and that is probably the low end of a synergy profile. >> i look the focus. you have some real aisles in all of the big box stores, and you

have been so impressive, but apparel is not something you necessarily want to be in. i had martin on when you had the other deal, these are outside of the newell pen. >> 80% of the revenue is in the top 30 brands. it looks complicated, but it is really kwiequite concentrated. there is a ton of value to be in growth acceleration. there are differences in the portfolios and the business models in some places, and there is opportunities. we have brands like parker and

waterman that are perfect gift abilities. so you don't think about it until you start to unpack this. i think we will play for the application of newell-rubbermaids model. we do want to respect the differences in things like yankee candle, and in the fashion and apparel businesses, but look at the growth rate, it is pretty extraordinary for what you guys have done. and that is a fantastic story. >> as the largest individual shareholder, do you get concerned at all? things are good right now, but you never know when a recession is coming. >> as you know with us, if a

recession is coming, we will probably see it before other people. this will delever very quickly. it was very port to newell and us a that we keep or ratings. and it raises us in terms of a great profile. it has a lot of hos tiffs that work in favor of our shareholders. >> giving that, are you surprised the stock is down? >> no, i think people are trying to understand the strategic rational. we'll have strong double digit accretion, and we have not baked in any revenue synergies or tack benefits trying to play for a

different tax structure. there is a lot of upside to play for beyond what we built into the model. this is a $16 billion company, margins over 20%. we get right down into our target ratio range of 3.5 times just 2.5 years out. and then over a $3 billion entity post synergies to be applied back into this business beyond the organic agenda over time. >> our viewers, and we talk about this in mad money, make the case for why wow are doing half and -- >> half is a lot. for me, anyway, you know the

reality is that it is like anything necessary a family business and ownership. you have to have some diversification. you talk about diversification, but that is my intent. frankly, it will be a lot of money. >> you talk about diversification. some of our viewers bha familiar with nomad or platform. either one has done particularly well in the market, platform, a really bad year, are you going to spend more time on those? >> yeah, i'm chairman of both of those companies. they're both great businesses that will take time. >> gentleman, thank you both for coming. . i know you will have more with jim on matt money as well. >> yes, more of the consumer side. >> thank you, up next on the program, one of the busiest

shipping days for all of the online holiday shopping. how are the delivery companies doing so far this year? more on that after this quick break.

>> with volatility surging, where are some of the safest spots to hide your money? more "squawk on the street" coming up. the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.

>> with just 11 days to christmas, it is one of the largest online shopping days of the year. morgan has more now on how the delivery companies are fairing this year. always a controversial subject is that volumes just grow and grow. >> it is so true. today is green monday. this is the third largest holiday shopping day of the year. it is also the third people day.

as well as the u.s. postal service suspected busiest day for mailing cards and packages, so how are we doing? how is it shaping up? ahead of thank there was higher volumes, and it seems to have carried over into cybermonday week as well. soship may trick say that's ups ground posted an on time delivery performance of 91%. that was down from 97% in the same week in 2014, 95% in 2013. fed ex stayed a little closer. that is about 2.5 million

packages delayed, and that is the fast majority of customers received commitments on time. and now the true test will be for these carriers in the next week and a half whether any more larger than expected surges occur, and if so how they mitigate that and there is one big factor that is working in shipper's favors. excessive snow was one of the biggest reasons for the snafu in 2013. >> know and ice. up next, ted cruz surging into second place nationally in the gop presidential race. we'll have more on the latest polls and a break down on the important states when we come back.

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a new national nbc news/"wall street journal" poll shows ted cruz surging now into second place with ben carson dropping to fourth. john harwood is live in d.c. with more. cruz is doing better on some of the individual state breakdowns we got over the weekend, john. >> absolutely, simon. look, we've got one more debate. that's tomorrow in las vegas before the republican campaign slows down for the holidays, and it's going to slow down at a

time of real change in the republican race. let's look at national numbers. we show trump still in first at 27%. ted cruz is second with 22%. then marco rubio and ben carson. then if you look and ask people, combining first or second choices, that's an indicator of room to grow. on that metric, ted cruz is first, with 40% say he's either their first or second choice, trump with 39. now, the room to grow is really evident when you look at what's happening in the state of iowa. the very well-respected iowa poll showed ted cruz with a ten-point lead, over trump. ted cruz benefiting from the fall of ben carson. now, when you look at the democratic side, those numbers also out this morning. hillary clinton has got a sub stab chul 19-point lead over bernie sanders. that race doesn't show much change. martin o'malley is in third with

4%. and we've also seen from the register poll that hillary clinton has got a nine-point lead in the state of iowa. so she's in pretty good shape but watch ted cruz as we get ready for the four-week homestretch to the february 1st iowa caucuses. >> of course getting the attention of all the other candidates to boot. john harwood there. with the dow down 56 points. let's send it over to rick santelli. >> good morning, simon and good morning, chuck beaterman, beaterman, beaterman. my first guest on fed week. charles, what do you see in your crystal ball that will help listeners and viewers put some perspective on why so many sectors are hot and exactly what the big issue is. is it the fed? is it the fed as a catalyst for something else? what's going on, charles? >> well, those people on wall street who think the economy's doing okay and a fed hike rate

is justified are usually looking at government figures. government figures for autos, for housing and for jobs and income are overstating the mess that the economy is in, and the truth is, underneath those numbers, if you look at everything, we're starting to circle the drain. and my prediction is we enter into a recession next year. even though it will be an election year. autos was -- >> but what are you looking at that's sending a different signal than what your interpretation of what the fed and some traders looking? in other words, what's giving you that feel? >> sure. we do a macro economics index which is declining this year after rising last year. income growth, based upon income tax collections, is starting to weaken. the lowest growth in the year. and that's pretty scary. we look at real-time housing data and local markets and the

mortgage buyer, not the investment buyer, not those buying apartments, not those in foreign money but people buying homes with a mortgage, it's declining. yes, home builders can give mortgages away to buyers. but the second home market is not doing well. autos, we're seeing capacity is growing. inventories are growing. that's in the face of anybody with a pulse can go get an auto loan these days. so we have overstated auto -- >> let me stop you there, charles. in the minute we have left, between now and one year from now, forgetting the fed issue for a moment, what do you think the chances are of the globe having a recession, more of a recession, countries like canada already experiencing negative gdp growth in some quarters. and the u.s., 1 out of 10 scale for each? >> i would say 7 to 8 chance of a recession globally.

and in the u.s. the only way out if we adopt some growth measures, not just lower interest rate, not just free money. 40% of small businesses say higher taxes and government regulation are restricting growth. how about we get some tail winds to these small businesses, make it easier for them to grow, do business start-ups and all that stuff, instead. cheap free money is not going to create a global expanding economy. >> that's what makes many traders nervous, is the tightening isn't so much about where the economy is or future data being independent, it's something they feel needs to be done. charles, thank you, simon, back to you. >> let's send it over to john and find out what's coming up on "squawk alley." >> perhaps taylor swift can help them shake it off, we'll have more on that.

also go pro, a downgrade as well. looking for a hero. and yahoo!, aaron jackson, jumping into an old squawk alley debate about what's to be done there. all that and more.

market volatility put the brakes on an anticipated rally.

squawk box, you need to watch, tomorrow on cbsp in. it's 8:00 a.m. out west, 11:00 a.m. on wall street and "squawk alley" is live. welcome to "squawk alley." kayla is back after a long absence. john steinberg is here as well. watching a lot. the markets of course, fed week, and apple down nearly 2%. morgan stanley lowering their outlook for iphones. calling for the first ever de