killing us. >> you can't win. you ha can't have a patient strategy. >> you didn't mention climate change. i know that's on your mind as well. thank you. >> thanks a lot. >> great to see you, my friend. >> thank you, jack. >> see, there is love. there's love. >> join us tomorrow. it's time now for "squawk on the street." ♪ >> the big decision in just a few hours. the federal reserve widely expected to raise rates for the first time since 2006 what does it mean and what happens if they don't? good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with simon hobbs, kayla tausche, david faber, cramer is off today. futures close to session highs as the s&p goes for its first three-day win. europe in the green. bonds and oil, watch them

closely. crude is back below 37. there hasn't been a rate hike since '06. that decision will come out at 2:00 p.m. eastern time. chair yellen scheduled to hold a news conference a half hour later. cnbc will bring you complete coverage of the big fed event. reminders of where we were on pop culture on june 29, 2006. >> it's been a long journey. it's been a long journey this year as we agonized about whether or not they would raise rates. during the course of that year, the stock market is basically more or less where we started. the ten-year treasury is basically, after this back and forth during the course of the year, basically back where we started. the big mover is the dollar index. the euro down 9%. that's partly you what see in the corporate earnings. >> you do have oil down sharply. you have the junk bond market reeling despite the fact that interest rates have been so low,

we have seen record high yield issuance this year again, emerging markets are weak again. we've been asking the question, simon, did the fed miss an opportunity in september? we said then, is this a gamble on whether you think the global economy will be weaker in three months or stronger in three months? the jury was out, but it's a tenuous economy the fed is raising rates into. >> particularly the industrial economy. the last couple of days we got warning from 3m, when from ke a kennametal, and this morning, dover corp, stock not down much, but another reflection of the industrial economy slowing. a lot of it due with oil and gas. kennametal and dover connected to that part of the economy. that gives people pause. they say 25 basis points, not a lot, right? >> that's the game this afternoon, to convince everybody that it's going to be gradual rise from here. what will be helpful for many

people in the market is if the dots explicitly come down, those individual projections of where we're going from interest rates from the members of the fomc, if they come down, that will ease the rate rise today. question whether they will say anything in that in the statement or leave everything for the news conference with janet yellen. her clear aim is to convince people that rates are rising slowly. albeit with inflation growing. >> the problability according t the street, 76% for that rate hike to come today. >> if they don't do it, the credibility is shattered surely. >> the market will see intense volatility. market turmoil happens when analysts and when market participants are surprised, shocked by a move they did not expect, had not prepared for and priced in. >> for more on the fed and what a rate hike will mean for this market, the chief economist from

steiffel and jim paulson from wells fargo capital management. lindsay, if they raise rates today what will that mean. >> we are expecting, given the strong rhetoric we heard from the fed and the chairman of late for that 25 basis point increase to occur this afternoon. that being said, do we think that's the appropriate policy move? no. do we think the data supports liftoff at this point? certainly not. the chairman in her latest comments said neither side of the fed's dual mandate has been met. if we see that 25 basis point increase, we expect it to be accompanied with a dovish statement. still a sluggishly low level of inflation. >> if the fed raised interest rates 18 months down the line, you wouldn't have expected them to reach the milestones.

>> to be fair f we look at 2004, inflation was 1.5%, wage pressures were well over 3%. they were confidence that inflation was on the rise. we look at the late '90s, inflation well over the fed's longer term target. this time around the fed is talking about an expectation of meeting that in the near-term with no data of that coming down the pipeline. the fed backed themselves into a corner based on a promise to the market, not a data stance. >> jim what is factored in here? the stock market gained yesterday. we'll have a higher open today. you have the tectonic plates shifting. the dollar, oil as kayla points out, at the same time high yield credit. where are you on this now? >> i guess what i focus on today is a bit about what i'm concerned about in the upcoming

year, playing out starting today, i think a bit. lindes tou lind lindsey touched on this. we have had slow growth, since we had no inflation pressure, zero interest rates, no challenge to profit margins, we could have maximum profit margins and maximum valuations, that's what's changing. i think that will change more. i'm concerned about stagflation, if you will. that's the nemesis of today's tightening is stagflation. as pointed out, real growth is not up to par to tighten. the reason we'll tighten today is we're concerned that wage evidence is creeping up, core consumer inflation is coming up. we have to tighten not because real growth is good but because we're concerned about nominal growth.

that smells like stagflation. imagine if you will in the next year if the dollar weakens and commodity prices lift on top of rising wage inflation, we still have very sluggish real growth, the fed has to accelerate tightening even though we have sluggish growth. >> just for the record, jim, many people in financial markets don't remember the last time that interest rates rose. they may not remember what stagflation means. stagflation is rising inflation, rising unemployment? >> rising inflation with weak real growth. >> right. >> the combination where the fed has to raise rates because inflation is rising, but real growth is still sluggish. we haven't had this for a long time. we certainly haven't had it in this recovery. if ask you me what the market is prepared for, i don't think it's prepared for that. >> what do you think some unintended consequences on the

consumer side may be? we are in a period of record auto sales. we have seen buybacks funded. do you expect any of this activity will shift or do you think that companies and consumers have already been reacting to this specter of rising rates? >> maybe on the business side there's been an anticipation of rates going up. consumers have been told rates are on the rise for the past several years. it's more of we'll believe it when we see it. the initial 25 basis point increase would not have a marked effect on consumers. as we continue don't line and see subsequent rate increases, that will translate into higher financing costs for autos and large ticket purchases like homes that will eat into the consumer's ability to afford those large ticket purchases. if the fed raises in december, they have to follow up with an additional rate increase in the

next several months to emphasize that the december liftoff was the correct move. a one and done would leave them flailing in the wind. so nearly 50 basis points will have a negative impact on the consumer against the back drop of near nonexistent wage growth. consumers under significant pressure at this point. >> yeah. i'm trying to remember if there was a time when people in financial markets welcomed a rate rise, we'll leave it there. thank you. watching the fed just a few hours after that final republican presidential debate of the year held in las vegas. john harwood is at hq today with highlights. good morning, john. >> good morning, carl. i want to go through some of what i considered the nomost important exchanges in that debate. you had a debate in which jeb bush, who was lagging in the race, was much more aggressive,

especially going after donald trump. this exchange was kicked off when donald trump reiterated his complaints that on immigration, on foreign policy jeb bush is weak. watch these two. >> when jeb comes out and he talks about the border, i saw it, i was witness to it, so was everyone else, i was standing there, they come across as an act of love. he's saying the same thing right now with radical islam. we can't have that in our country. it won't work. we need strength. >> governor bush? >> donald, you won't be able to insult your way to the presidency. that's not going to happen, and i do have the strength. >> good moment for jeb bush. i don't know that it hurt donald trump who went in as the front-runner, comes out as a front-runner. more interesting was the undercard debate on the main stage. that is to say marco rubio and ted cruz are competing to be the alternative to trump among the mainstream candidates. cruz has been rising. rubio tried to hit him using his own weak points saying that ted

cruz's position is similar to marco rubio's on immigration, which rubio has been criticized for. watch how they went back and forth. >> i'm always puzzled by his attack on this issue. ted, you support legalizing people who are in this country illegally. ted cruz supported a 500% increase in the number of h1v visas, the guest workers who are allowed in the country and ted supports doubling the amount of green cards. >> he is attempting to muddy the waters, there was a time for choosing as reagan put it. there was a battle over amnesty. some chose, like senator rubio, to stand with bobama and schume. >> cruz has been rising in iowa leading donald trump there. rising nationally. i think he got the better of that exchange. you also had another candidate in new hampshire trying to break into the top tier. that's chris christie, the governor of new jersey. he's been doing well in new hampshire lately.

he used the cruz/rubio exchange to belittle both candidates as people who didn't have experience to make executive decisions. listen to the governor. >> this is what it's like to be on the floor of the united states senate. i mean, endless debates about how many angels on the head of a pin from people who never had to make a consequential decision in an executive position. >> those were the exchanges that americans will be left with heading into the holidays. once we get after new year's guys, we still have a full month to go before the iowa caucuses and new hampshire primary with more debates ahead. >> that's good. thank you very much, john harwood. when we come back, the impact that a fed rate hike could have on the banks. and later, sallie krawcheck, she was cfo at citi the last time the fed raised rates. announcer: through sunday at sleep train,

get up to 48 months interest-free financing on tempur-pedic, save $300 on beautyrest and posturepedic, or choose $300 in free gifts with stearns & foster. the triple choice sale ends sunday at sleep train.

industrial production is out. let's get to rick santelli. >> wow. okay. if we look at industrial production, it was down 0.6, last time 0.4, now down 0.10. here's the running totals, we have eight negative numbers two positive numbers, one zero. not a good record if you're

monitoring manufacturing. let's get to the utilization rate. 77, also a disappointment following 77.5. and 77 is the lowest rate of the year. it's actually the lowest rate going all the way back to january of '14. here's another interesting little tidbit. we have not had a 79 handle on utilization rates all year. but yet we finished slightly over 79% at the end of last year. so it gives you this feel of the deterioration both sequentially on a month over month and year over year basis. and this is something we need to pay attention to. it may only be 12% of the economy, but it leverages up nicely as a good multiplier, when you're handle is on gdp, you will take it anywhere you can get it. david faber, back to you. >> wanted to update viewers on battle we've been following between norfolk southern and canadian pacific. this morning canadian pacific

having a call because they also raised their bid or potentially raised their bid for norfolk southern, a rail they've been seeking. norfolk southern is saying not a chance, no way. we don't think this could pass regulatory muster. they include a so-called contingent value right in their consideration that would be paid to shareholders should the combinati combination, if it ever comes to be what a stock price that does not average at least $175 -- bear with me -- between april 20, 2017 and october 20, 2017. the ccdr would pay up to $3.4 billion to shareholders to take into account the differential if there should be one of 175 and wherever the combination stock price would be. another way they're trying at cp to increase the overall value of the deal to get norfolk southern shareholders to bang on the

board's doors and say pay attention. unclear if that will work in any way, shape or form. we did want to share it with people. we'll have more as we move along. >> bill ackman pulling strings. >> bill ackman, large holder of cp. banks are rising ahead of the fed decision. how might a rate hike impact the banks? kayla tausche is here with some answers. >> we talk so much about the financials in the prism of the fed and so many people have tried to play this sector. largely for the last couple of years it's been a false alarm. these banks raise every time a rate hike is mentioned. banks can lend out or reinvest the excess deposits they have at higher rates once the rates go up. on the flip side, as loeans get more expensive, defaults rise and they have to pay more to consumers for savings.

this will benefit them, but not by 25 basis points but at 100 basis points, bank of member saamerica is expected to see a interest of 4.5 billion. j.p. morgan 3 billion, citi 2, morgan stanley 4.1. and the regional banks, which people have been buying, have been tough to pin down because they have a lot more exposure to energy loans, that's a variable nearly impossible to solve for this time around. any bump won't happen overnight this will be a gradual hike. it's been telegraphed as so. it could drag down oil, strengthen the dollar. trading for the banks has been declining for this quarter. analysts have taken first quarter earnings for the banks way, way, way down.

but if you are willing to be patient, history shows the bank trade does pay off. according to the last four so-called first rate hikes, universal banks sold off the week after, perhaps too many people buying into the rate hike, and then not seeing that immediate lift so they selloff. six months later a sharp rise for the big banks, even though the s&p subgroups are negative. a year later, some of these names have even so much as doubled in the stock market. it's probably going to take about a year to get you to that 100 basis point hike level any way. and you could see some loan demand come off as well. but it's still very interesting to note how many different levers, even 25, 50, 75, 100 basis points do. >> and if it's a normal rate hike cycle or if they cut in a year. >> that's right.

one and done or something else. >> we'll see you later on "later on, we will talk with former fed governor randy kroszer, part of a big day lineup including fef gundlach, leon cooperman, bill gross. ♪

(train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.

just about six minutes to

the bell. less than five hours from the fed decision. let's get to art cashin here at post nine, director of floor at ubs. you long said you did not see a hike coming this year. seems like they'll sneak one in before the bell, but you'll still be watching for dissents among other thing. >> usually yellen likes to go for unanimity, but i think today dissents will be helpful because it will tell the world we're in no real hurry. we have disagreement on the board, don't expect us to keep coming again and again and again. >> so multiple meaning more than one? >> yeah. there's a possibility of three. you've got tarullo, branard and evans. if they don't push hard, they think it through, there may be some dissents. >> it's a market that's been

troubled by oil and high yields. yesterday we got a rebound from that. december has not been kind. >> no, it has not. we may begin to see another cycle of pressure on oil building up. i'm not sure the high yield thing will have a major effect. rather narrow. it's not in the trillions. it's in the billions. so i think it's kind of insular. i would worry about oil if it comes down and makes another low. >> some peoples christmases are not made until we talk about a santa claus rally. do you think there will be one? >> i think there can be unless there's a particularly negative reaction in something like the emerging market currencies to the fed move. i think what you've seen over the preceding days, operation week in december, one of the better weeks of the year. two days going into a fed

meeting, better rally time. they all worked handedly. so this market, which is still oversold despite those rallies, could enjoy a seasonal pattern. >> good chance we talk to you in a while. >> there's a possibility. >> thank you, art cashin. four minutes until the opening bell. announcer: sunday's your last chance to save big

during sleep train's triple choice sale. for a limited time, you can choose up to 48 months interest-free financing on a huge selection of tempur-pedic models, or choose to save $300 on beautyrest and posturepedic mattress sets. you can even choose $300 in free gifts with sleep train's most popular stearns & foster mattresses. the triple choice sale ends sunday at sleep train. ♪ sleep train [train horn] ♪ your ticket to a better night's sleep ♪ ahh... steve, other than making me move stuff, ces. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim?

for all the confidence you need. td ameritrade. you got this. with t-mobile and the incredible iphone 6s you can reach more people in more places than before. whether you're at home in the basement on the open road or pulling the late shift at work. you're more connected now because t-mobile doubled its lte coverage in the past year. and our extended range lte goes two times farther than before and is four times better in buildings. get iphone 6s for zero upfront and just five bucks a month.

you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in under 60 seconds on this fed day. decision coming this afternoon, the last rate hike, june 29th, 2006. expected to go to that range of a quarter to a half point. big questions will what is the policy statement saying, is it upbeat? how upbeat will the outlook be for next year? will the dots resolve the divergence between the markets and the fed? watching that along with even more industrial company warnings. as david said earlier, we heard from 3m, kenna metal.

>> dover this morning. new corp as well. that was not a good outlook there at all for that steelmaker. we know how tough that's been. >> there's the s&p at the bottom of the screen. at the big board today, it's new york cares, highlighting its annual holiday coat drive. at the nasdaq, vontobel, a wealth asset manager for private and institutional clients. here's a fun fact. on the day the fed went to the zero bound, which was december 16, 2008, the dow jumped 4.2%. that's the equivalent of 736 points today. just an indication of the volatility markets have historically gone through. >> it was a different world. >> yes, but the numbers back then, you forget where we were. >> that was a rally, then we

bottomed in march of -- three months later in the broader indices. what did we hit on the s&p? what was our low? >> 666. >> 666. it was. sometimes you think that number, that can't be right. yeah. then we have been at zero since. some people focusing on the ris risks. having extraordinary low or no interest rate to speak of. people reaching for yield. we've seen it lately perhaps reflected to a certain extent in high yield, blow up of the third avenue fund in particular. broadly speaking i think a lot of the fears that people have had have not been borne out nor has the great growth that some were hoping for that would come from having basically free money. >> though you have, for example, lindsey earlier in the show

thinking this is an error which is why she's going to emphasize that they need to sit here with one twor two rate rises. in the meantime, a lot of people are focused where the cycle takes us. do we end up at the zero bound in two, three years. yellen says, hey, we have to hike rates now, otherwise there would have to be more aggressive hikes down the line. she believes there's animal spirits within the economy that need to be controlled at this stage. financial markets don't welcome rate rises. that's not what they do. savers welcome rate rises. seniors welcome rate risers. >> that's been a big point in the media today about what this fed decision may mean. we'll find out later today. walt disney is the top performing dow stock. this is almost a 2% gain for disney as now the press

screenings of "star wars: the force awakens" stars to happen. the premiere, the broad rollout coming later in the week. generally reviews good. "usa today" gives it four stars. goldman upping their expectations for box office internationally and upping their eps, 3% for the next three years. just a comment on how well disney monetizes this property. >> how significant a franchise it is. >> you are taking the kids, david? >> no plans to. >> interesting. >> i assume we will hit it at some point. >> a lot of people with young children of 8 or 9 saying i'm not interested. whether they'll learn about it. >> my kids have all sampled the movies. >> have they? >> they have. all of them. there's not a great clamoring that we go. a lot of homework being done at my house. we don't have time. >> you expect that in the faber household. high achieving children. >> ychl.

>> we'll get to it at some point. >> the media stocks, it has been a horrible year. yesterday i mentioned while stocks were rallying, they have been down dramatically over the past couple of years. viacom down 45% year to date. fox down 23%. discovery, time warner down about 23% for the year. of course netflix up 144%. did want to change subjects to valeant. the company holding an investor-day meeting, this one day after it introduced a new policy, if you will, to try to cut out the pharmacy benefit manager and even insurance companies to a certain extent, having almost a direct sale crew at walgreens for a number of drugs initially, and more over time in this new deal. the stock was up dramatically yesterday, crossing that $100 threshold. responding positively today to

what is new earnings guidance from the company, total revenue previously seen between 11 billion and 11.2 billion, that's for full year 2015, now 10.4 and 10.5 billion. they lowered adjusting earnings per share. lowered cash flow from operations. and investors seem to have expected worse is basically what you can say here. for those interested, a worth while read in the journal about the accounting at valeant and the way they do construct their own metrics, if you will, to be judged by is worth reading. that stock rebounding again. a decent day for mr. ackman and pershing square which had been down 20% at the end of november. owns 9.9% of valeant, owns a percentage in canadian pacific. a busy morning between val yaea and the canadian pacific call, mr. ackman.

most have added to dramatic losses in his portfolio. >> that may be why we're rising on valeant, it has already lost half of its value as a result of the philidor controversy. bill ackman has a letter out to investors in which he describes how badly the fund has performed. said his own fund is doing okay on intrinsic value, but as far as valeant is concerned, he doesn't believe the controversy over the pharmacy was as warranted, certainly in the price action that we saw. and argues had valeant been a private company it wouldn't have had the fallout from the short-sellers. i'm not sure if this is not a reaction to where we've been on valeant and certainly with the walgreens deal they can move on to a big distribution. >> walgreens helped people think they would overcome the loss of sales from philidor going away. there is still a special committee investigating the

philidor relationship and we have yet to learn what they will report. >> it looks like he will be on capitol hill as well. >> cvs with a 21% div hike and raising their 2016 outlook that stock is up better than couple percent. we'll keep our eye on the solar names. are you watching for solar? this omnibus bill that will start to allow for some crude oil exports was done reportedly in exchange for the extension of some production and investment tax credits in renewables. that's why solar stocks are up better than -- very nice percentage gains. 8%. >> we have not mentioned the deal that paul ryan has apparently struck to end the ban on oil exports it has to be pass the in both houses. are we clear on whether or not the white house is still intending to veto it? it's interesting to the extent after which brent has lost

ground compared to west texas, arguably because that differential may be moved down the line. >> in the meantime, as we said, disney leads the dow higher. caterpillar among others leading it lower. bob is on the floor. >> good morning. it's financials helping things out. they had a great week. i'll show that you in a minute. we're continuing a rally that we saw really towards the end of the day on monday. things started moving up here. financials leading again. technology on the upside. industrials, materials, energy lagging as oil is down a bit now. i want to show you financials. we are getting what everybody would hope for or what was anticipated. financials have been leading as we go into the fed meeting and an anticipated rate hike, bank of america, regionals like fifth third have been up nicely. 5% moves in most of the banks. that's a nice move after moving sideways for quite awhile. as for the fed in the markets, we have an unusual situation

going on. we have a quadruple witching expiration, that's the quarterly expiration in stock and index futures, and stock and index options. so there's a little bit of a crowded trade going on. everybody believes the fed will be very dovish. risk therefore is the fed might appear hawkish. this normally would not matter this quadruple witching. when you have prices that are very important that could drop through the strike prices if the fed appears more hawkic, it creates the sense of heightened volatility in the options market. that's what people will be watching carefully to see if the fed moves the prices down enough. what will happen after the fed? generally you heard seasonally strong period of the year. tax loss selling and abating. many underweight stocks ahead of the fed. the wild cards are oil and high yield. if they behave. we could have a rally going into

the close. as for the big industrials we he have two big industrials commenting today. generally growth is hard to come by. honeywell is the star here. they're talking about 6% to 10% earnings growth next year. 1% to 2% organic growth. this is a big move. these are very good numbers. it shows you how tough industrials are around the world. revenues flat at $40 billion. look at honeywell. one of the few industrials up this year. up 2%. higher dividends, attractively priced, 15 times forward earnings. i know this doesn't look like a fabulous chart, but this is a big star in the industrial world. dover is more typical. they lowered the full year guidance. they are big in the energy business, big in the refrigeration business. business is just tough and they're not able to grow that much. if you look, they're down 12%, 13% this is much more typical of the global industrials. honeywell a standout. right now the dow up 141 points.

>> it's a big rally. joy global swinging losses. thanks, bob. let's send it over to rick santelli in chicago and see how we're lining up in the treasury pits. rick? >> simon, you know the equity markets have had volatility up and down. the treasury market for the most part is biting into firm rates but not necessarily going through key levels, especially on an annual basis. if you look at a two-day of two-year note rates, you can see we're dabbling with 1%. when is the last time we were settling above 1%? you have go back to april of 2010. now, if we look at the last fed meeting in october, let's pick that as the chronological start for the two charts in the middle of the curve, the five-year as you see there. the high yield on the closing base -- i do everything on a closing yield basis, 178, snugging up to that. that's the area you want to

watch. it's a pivot for the knee jerk and how the normalization will effect the markets. the ten-year has been defined by employment reports because they're so into fed action, at least the perception is that. you see kind of the 231 to 235 area in play. if you look at a 20-year chart of tens minus twos, i picked a 20-year. yes, we've seen flattening. the flattening we've seen may have room. would we see an inversion? i'm not sure. there's a lot of things going on here. switch gears quickly to foreign exchange. yes, it is now 8 sessions working on its ninth. dollar yuan as you see on this chart. and if we look at the african rand or the indian rupe, how you level this and square the fed is not only our markets but to see how the rest of the world tonight and tomorrow respond to what we may be doing at around

2:00 eastern. david, back to you. >> thank you very much, rick santelli. did want to get to a little bit more on this continued battle -- in fact, keeps heating up between canadian pacific, as you might expect. canadian rail, which has large shareholder bill ackman in it, run by hunter harrison, well regarded management team that has come after norfolk southern and has been rebuffed at every turn for an off their thus far has been revised -- was revised downward in terms of the cash portion. the latest 32.86 in cash, a fixed exchange ratio of 0.451 shares in the new company. today they added something called a contingent value right, the way we explain it, give people a right between what they say is a price of 175 for the combination and anything below that. a value for the cpns common

shares will be determined based on the trading prices of that common share during a period that would commence april 20, 2017 and end october 20, 2017. so, if reach cvr would be worth the difference if the stock is below 175 up to 25 bucks. up to $25. so they will give thank you cvr. they have not been in position to increase the offer in a meaningful way. they decreased the cash foption this week. earlier this week, hunter harrison gave voice to this possibility of a cvr and raised the possibility of a problexy ft down the road. norfolk southern has said it does not believe the services transportation board would approve the deal itself or even this voting trust structure that

cp has come up with to try to give share holders their money sooner. there's the explanation about the value of the cvr itself, specific to what i'm talking about now in terms of antitrust i would reference yesterday's response from norfolk southern which says if canadian pacific is positive that the voting structure would satisfy the twin legal tests, they can seek a declaratory order to that effect from the stb. they have not done that we're at a standstill. will they initiate a proxy fight? are there enough shareholders who would support them? key questions that people will have to continue to think about with this battle continuing at this point. carl? >> all right. thank you very much. when we come back, former

fed governor, randy kroszer on the rate decision. watch our coverage of the fed decision on rates at 2:00 p.m. eastern time. followed by fed chair yellen's news conference. dow is up 152.

sallie krawcheck was cfo of city the last time the fed hiked rates. she runs a digital investing platform. stick around to hear what they has to say about the decision today. steve liesman is in washington as we count down to that fed decision on rates. steve? >> carl, when we come back, we'll give you an exclusive guide to reading the fed on this historic day. is it a hawkish hike, a dovish hike or a neutral hike? announcer: through sunday at sleep train,

get up to 48 months interest-free financing on tempur-pedic, save $300 on beautyrest and posturepedic, or choose $300 in free gifts with stearns & foster. the triple choice sale ends sunday at sleep train.

sallie krawcheck, predicting on linkedin that 2016 will be the year of the female entrepreneurship. great to have you back. >> that was a while ago. >> it was a while. today could be a moment, do you agree? >> i knew i wasn't going to get out of here without talking

about raising rates. >> we'll talk about everything else in a minute. >> of course it's symbolic and important and the markets are nervous and jittery. the big banks have to watch out. >> what do you think it says about where we are in terms of growth. >> the real economy feels okay to quite good right now. with energy prices coming down, it's helpful to the consumer and what we're seeing in the real market is that people feel good about it, people are hiring. >> you talk about female entrepreneurship. >> yeah. keep seeing charts of entrepreneurship in general in this country 20-year charts, that it's a slow grind down. >> right. >> people are not starting their own businesses the way they used to. >> yeah. some of that is confidence. i think what we have going on now from a female perspective are a few things. first of all, there's a growing recognition that when females are in management in start-ups and regular businesses with

start-ups, that the performance is not just better, it's a lot better. first round capital says their performance, where they have females in senior roles is 63% better than all male teams. number one. number two, the cost of starting businesses is coming down a lot. the cost of technology is coming down. you can rent space in the cloud. you can rent office space, you can bring in freelancers, some of the most talented people i've worked with are freelancers. we're beginning to have enough women who are doing this that other women are starting to look and say hold on, my big company, i loved it, i like it, look at what they're doing 23 and me, here say social, the real meal, the muse, goldie blocks, you're seeing enough where people are saying that might be a good choice for my life and my career. >> i just wonder, changing the subject slightly to bigger

companies and tech and financials, how symbol ic ruth' move was from morgan stanley to go to google? not that just she made the move but that the stock rose 40% because of her, i think it's $150 billions of market cap created into that process does that say anything about female entrepreneurship or technology and finance and how that relationship is changing? it's about where the economy is going. whereas financial services for so long was the place talented individuals wanted to go. you're seeing so many folks wanting to go to tech because they see the growth there. the other one that is symbolic is blythe masters, so successful in big banks and has chosen -- as a couple others have -- to become an entrepreneur. has had opportunity go back and said no thank you, i'm staying here. >> do you think -- i won't call

them failures, but challenges, yahoo! meredith whitney, do those get overplayed? >> yeah. you get a group of women together, we talk about if you've been in the press, i got this press, i got that press. as the glasses of wine go down, we have more conversation. there are women who fail there are men who fail, too. as the press, it's your prerogative to kcover all that but don't take away some of the successes these women are having as entrepreneurship. >> are men value destructive? >> look, i always say i love guys, okay? i love middle aged white guys. i've been married to a couple of them. i think they're fantastic. the important point it's not guys or gals, it's both. the power of diversity is having a different perspectives, different backgrounds, different ways of thinking come together that drives value. >> sallie before we end here, on

the financials, you covered them as well as being cfo at citi. you said earlier big banks watch out. i thought this is a good time to be a big bank with rate potentially rising. >> i hear that. everybody thinks as soon as rates increase, we'll flood money and it will be terrific. that's true, they will be making more money, but the problem is getting from here to there. every time we see nervousness about rates going up, you see some bank lays off a bunch of people. some hedge fund had an issue. it's not the being there it's getting. there i never liked two words -- three words in the same sentence -- banks and bar marea markets. >> it's like reading your old bernstein stuff. >> you remember. >> we've been around a long time, too. >> that's how we are. >> sallie krawcheck, thank you. when we come up, former fed

governor randy kroszer in a moment. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

at&t knows the best kind of holiday... is the kind where everyone gets what they wished for. make this holiday extra happy when you buy one get one free on our most popular smartphones...

like the samsung galaxy s6. buy one get one free. so spread some cheer. and capture every minute of it. right now at at&t, buy one get one free on our most popular smartphones.

. good wednesday morning. welcome back to "squawk on the street," i'm carl quintanilla with sara eisen, simon hobbs, david faber at the new york stock exchange on what could end up being an historic day from a fed perspective. we are looking -- widely expecting a fed decision, a rate hike this afternoon. the markets trying to enjoy this, off the highs, but up 115. crude back below $37. watching that closely. this is the road map for a big day on cnbc. stocks in rally mode again as we await the fed decision. former fed governor, randy kroszner will join us live. >> and keeping an eye on oil lower today. had been rebounding earlier in the week, sending names like chevron and exxon sharply higher. find out how you should play the big oil stocks. and we are just eight days away from christmas, which retailers are winning the holiday season so far? we have exclusive data ahead on the show. four hours from that fed

decision. we'll have full coverage beginning at 2:00 p.m. eastern. our senior economics reporter, steve liesman is live in d.c. ahead of that decision. good morning. >> here's a handy dandy guide to listening to the fed as to whether the expected rate hike will be dovish, neutral or a hawkish hike. if it's a dovish statement it would say something like a gradual path for rate hikes and imply yellen and the press conference it would be a one and pause. neutral hike, then they would really say the path is entirely dependent, not mentioning that gradual path, dependent on the economic data. a hawkish statement would have none of that stuff in it it would even talk about normalization, as in future rate rises, and drop this idea that at the end of the process they would still have below normal rates. something that's been part of the statement for a while. if the fed announces a hike today it would have been six years and six months since the

end of the recession, nine years and six months since the last rate hike, and 11 year the and six months since the last tightening cycle. there have been three qe programs putting trillions of dollars on the fed's balance sheet, operation twist, then a taper or an end to qe. the markets soared for years before flattening out, dropping off of the highs. if the fed enacts that rate hike today there will be almost a certain irony in this. why? janet yellen came into office in 2014 expecting to be one of the most dovish leaders ever of the central bank. critics say the bank should have moved months, years and go and the measure of her dovishness makes it look like a rate will happen now. i've got comments from people saying the fed is crazy to hike

today because of lower inflation and lower capacity utilization. yellen is 15 years at the fed. she's the one guiding this. republican presidential candidates have accused her of doing the president's bidding by keeping rates low. it's a charge she and the fed vehemently rejected and for which no one has offered particular evidence. so much will depend on yellen and the fed's ability to communicate to the markets and the public what the new fed goals are for hiking. why hike and at what speed? that's yellen's best chance of engineering what she wants, an immaculate rate hike, one that doesn't crash markets and the economy. sara? >> a lot riding on today, steve. i hope you got your question ready. steve liesman in washington. joining us now, we'll dive into this discussion. former federal vef goreserve go, randy kroszner. great to see you. >> great to see you. >> steve was giving us

historical dates, 11 years since the last tight ing cycle. seven-year anniversary to the date of when the fed took rates down to the zero bound. how different is today if we do get this rate hike, how different is this tightening cycle going to look? >> it's quite amazing, i was there seven years ago when we brought rates down effectively to zero i don't think anyone around that table thought that it would be seven years before the first rate hike. we did think it would be some time, but not seven years. steve talked about a few different paths. by far, the most likely one is the gradual path. i think janet yellen has been at pains to say when the tightening begins, it will be very, very gentle. very gradual. i think they're in no rush to move. they want to see what the impact of this will be. they want to make sure they can enforce the quarter point rise.

so i think they'll move slowly. >> some of the members are even less in a rush than others to lift off today. we heard from dan turillo. you were a governor. is it okay if the governors dissent dissent? is that kosher. >> it's perfectly fine. it's an open debate. people can put forward their views if they want to dissent. whether they will dissent or not is a separate issue because i think by giving a dovish tightening they will probably okay be with going along with i it. >> how do we know it will be a dovish tightening? what do they have to say to convince the markets of that? this is an extremely difficult communications challenge. janet yellen has to express confidence in the economy that it's going along solidly, but not so much that people think rates will rise rapidly.

it's a difficult balancing act. she was able do something similar to this, when people were using the word patient, they took the word patient out of the statement. what does that mean? she said, well, just because we have taken the word patient out doesn't mean we're inpatient. it's a similar thing here. >> what's your analysis of what cycle is from here? when do we return to the zero bound? two, three years? >> well, hopefully it will be a very long time before we have to move back down. hopefully we can engineer things so the economy can continue to grow, not at a robust pace but at a reasonable pace of 2, 2.25% so the fed doesn't have to retrace. the people who are concerned about the rate hike are concerned about that because central banks, like the european central bank, the bank in sweden and others had to retrace after they increased. they're hoping to avoid that. >> how long can a business cycle

be, randy? how long can you keep expanding for? >> there's no particular number that is an upper bound. we have had a long positive cycle here. but it's also a much more modest recovery. perhaps that's one way of doing it, a more modest recovery that can go on for a longer period of time. we don't know. this is unchartered territory. >> one reason why it's so controversial, the actual move, there's so much debate and discussion about whether now is appropriate because of what is happening in manufacturing. manufacturing shrinking in this country. the strong dollar, weak commodities weighing on that group. consumer is in good shape but it's been lumpy data. a how worried do you think the fed is about these issues? >> the fed is monitoring these issues. it's heartened by the continued -- i wouldn't say

strength but reasonable progress of the consumer. it seems that fortunately no matter what has happened, whether it's tragic events, terror events, economic events, the consumer continues to move along at a fairly solid, not robust pace. that is something that's been helpful. investment has not been as strong as anyone would like. but so far there seems to be reasonable robustness to these shocks. >> what do you think would be characterized as a success in the eyes of janet yellen after today? stronger equity market? weaker dollar? what will she look at? >> she will be hoping for very little change. i think what she's hoping is that she's telegraphed exactly what will happen here, so that markets have largely anticipated it obviously slight positive in the markets would be better than a significant negative. but i think she's more looking

at the long run, and she's also looking to try to avoid volatility. hopefully relatively little action would probably be the most desired outcome. >> randy, thank you. good to see you on this historic fed day. randy kroszner, former federal reserve governor with the dow up 100 points. >> the big question is what happened to stocks the last time the fed raised rates. dominic chu has that. >> let's take a bit of what randy kroszner and sara eis sar have been talking about. it's been a bullish time during quantitative easing. let's take you back to june of 2006, the last time we saw the federal reserve hike interest rates. again, we were approaching record highs in the stock market back then. of course all of that right before the great financial crisis. we know right before the depths

of the final crisis in march of 2009, in december of 2008 that was the last of the cycle of rate cuts that got us to this zero to 25 basis point range. we got these qes, the multiple ones starting, the markets rebounded. all of a sudden in december of 2011, operation twist, a change on the type of policy, where they were going to buy and sell bonds. different ends after the maturity spectrum. that helped propel things to qe3. again, still moving higher with the overall stock market. some would argue that the federal reserve was feeding asset prices and making them go higher because of these policies. then we started to unwind a bit that monetary policy as the tapering of the fed bond purchase program took hold in december of 2013. here we sit again, near record highs. as we talk about, carl, what's happening with the overall market, that's a huge focus today but that's what's happened. we'll see what happens in 2016 given what could be the most highly anticipated fed interest

rate increase in modern history. back over to you. when we come back, big oil seeing nice gains this week. chevron and exxon the best performers on the dow week to date despite their modest losses today. should you, in fact, be buying or selling some of these names? more on that when "squawk on the street" comes back. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

don't let it conquer you.. with the capability and adaptability of lexus all-weather drive. this is the pursuit of perfection.

welcome back to "squawk on

the street," i'm mary thompson with breaking news. a person close to the firm of general electric, ge is on track to sell it's appliance business by 2016. ge nixed a plan to sell to electrolux amid opposition from the antitrust division. five different parties have been expressing interest in the unit. no word yet on price. but keep in mind the business has been showing steady growth of about 8% and could generate double digit growth. ge closing out on a big year. began winding down ge capital, had the acquisition of alston, and looking ahead, ceo jeff immelt said he is focused on growing ge digital, the software the backbone of the industrial

internet, likely to post sales of $5 billions this year, up from 4 billion in 2014. the source saying ge is also benefiting from the digital internet with $500 million in savings expected in 2016. some other topics investors will be looking for, the outlook for profits, margins and cash flow, the outlook for ge energy in the face of continued low oil prices, and more details on its plan to apply to be removed from fed oversight or applying for de-designation. the meeting starts at 3:30. we'll have the headlines when they cross. back to you, simon. >> the meantime, celebration given where the stock is and the rally they engineered at the end of the year. oil is down today. clearly energy stocks have been

one of the big laggards this year. how do you play hoyle stocks ahead of the fed? doug terreson is an analyst from evercore. good morning. >> good morning, everybody. >> i need to ask you something important about what is happening on capitol hill. last night paul ryan had a closed door meeting with members of the gop in which he suggested there was a meeting between the house and senate to end the 40-year ban on oil exports from this country and they would embed it in the government spending bill to get it through. does that mean that the ban ends? does that mean the white house won't veto it? what's your reading here? >> it does sound like it's going to end. but we think that repeal of the export ban will hold limited implications for the u.s. and the refine and marketing companies in 2016. it's progress, but just remember that most of the bottlenecks in the u.s. crude oil transportation system have been alleviated in recent years. that's part of the reason that

brent ti declared from $18 a barrel in 2012 to near zero today. we're happy to see it, but i think the earnings represent lower wti spreads, that's why refiners are trading up on the news toad. it might be a non-event for investors. it's been well telegraphed, we think. >> what is your view now of the oil stocks? it's been so choppy. chevron is a stand out and has been for some time. what do you buy here now? >> we became more constructive last month. that's after being on the sidelines for more than a year. part of the reason why is we think we're close to a bottom. we think opec's policies are working and we'll see improvement in fundamentals. we're not saying we can't go lower by another 5 to $10 per barrel in the near-term, but at the same time i'm not sure how relevant that will be, especially because they discount low and high prices.

we did upgrade bp, chevron and exxon last month after being on the sidelines for more than a year. >> doug, even if you're betting on demand getting closer to supply, and some rebound in crude, there's a big school of thought that the big integrateds are not well positioned in a rebound in oil. do you avoid exxon? why the upgrade? >> the reason is as follows. there's a lot of bad news known as it relates to big oil companies. number one, those stocks really are trading at valuation lows that we did not see in the 1987, 1998, or 2008 oil price declines. that's on both price to book and yield, both of which are relevant for the super majors. and short interest has been near a decade high recently. these companies are now starting to take steps to recapture some value they lost but in 2008 and 2014 for shareholders. and the other point is that

these companies also offer dividend yields of around 5%. we think they're safe. and we think those dividend yields will prove supportive if the market environment proves to be lackluster. >> i want to come back on the point that you made about opec, where if i heard you correctly, you suggested that the opec strategy was working. >> yeah. >> what strategy from opec given that they can't get the saudis on board for a cut? >> well, couple of important points. first of all, when i said opec's policies are work, we're talking about lower prices are leading to improvements on the demand and supply side. the demand was revised higher in 11 of the 12 months in 2015 and by a full 50%. non-opec supply growth is collapsing. it grew by 2.5 million barrels a day last year, by half that amount this year, and decline by a half million barrels per day next year. non-opec supply changes by 3

million barrels a day within a year. we do think we're in recovery mode and the price is well below the price the industry needs to have in the longer term. >> thank you, doug. doug terreson joining us. coming up, bill ackman says this could be the firm's worst year ever. we'll have more on exactly why, plus the latest on the high yield meltdown. bank of america's head of high yield strategy will join us live after this break.

bill ackman telling investors 2015 could be the worst year ever. kate kelly has more on that. >> a surprising upbeat letter from bill ackman given that headline. as of november 30, pershing square had fallen nearly 22%. an abysmal figure after being up 40% last year, which was a banner year.

2015's losses were affected strongly by valeant pharmaceuticals which fell this fall after concerns that arose at its pharma-- at philidor. there were also declines in long divisions, like canadian pacific railway, and a robust performance by the nutrition company herbalife, which ackman is famously short. ackman argues this has been a good year for pershing's portfolio of companies from an intrinsic value perspective, and redemptions or requests for money back have been nominal despite market performance issues, with a small amount asking for money back in the third and fourth quarters. ackman is as involved as ever in

other improvements, including taking a lead role on a canadian pacific investor call still happening as we speak. >> we've been reporting on that call this morning. the redemptions is interesting. i've heard that from any number of funds that suffered this year. redemptions have not been as large. the first quarter could see a different story. i don't know what you're hearing. it sort of is hard to imagine that you won't see investors pull from some of these funds down so much, whether it's pershing or einhorn, but yet they aren't, at least not yet. >> i agree. it's a curious thing. two things on thachlthat. we hear people have not had a huge redemption problem, but i would like to see what the assets are in january or february when they track the decline in assets. it's hard to separate the redemptions from market losses but i wouldn't be surprised to see capital fall. we already saw that in the third

quarter. that's one thing. i wonder if investors are saying we want to keep our money in to regain a high watermark or regain lost ground as opposed to take money out after a great year which did happen last year. >> that's the picture ackman is making in the let. high yield bonds are having a volatile week with the fed set to raise interest rates this afternoon. will this add more pressure to the junk bond market? joining us now is michael contapolous head of high yield from bank of america. we have had some recovery in the market this week, yes? >> we have. the markets recovered a bit after last week's major selloff. we had nearly 3.5 billion in redemptions after a one-week span. i think the market realized a mini carthodic moment, and then

i think we will have a back half of 2016 that's a bit rough. >> more imimminently, what happs with the fed today? jeffrey gundlach was suggesting there is real carnage, which there was at the end of last week, and that it would be a mistake to have a fed rate hike today. >> i think the fed will go today and several times next year. the overall the health of the u.s. economy is strong. the consumer is strong. i don't think the fed reacts to markets. a one week selloff or a two week selloff shouldn't influence the fed. i think they'll go today and i think the market also tas will relatively well. >> the consensus seems to be that the fundamentals got out of

whack with the selloff, overdone. is that what you're seeing? if so, how big is that gap between the fundamentals and the opportunities now. this is an interesting story. in my market, within high yield whiplashing we've seen over the last week is not fundamentally driven. it was all about flows, redemptions, opec, oil. we have not seen, i think, investors look at the fundamentals and realize they're quite weak. noncommodity ebita growth in q3 was negative 6% on a g.a.a.p. basis. that's not good. leverage is at all-time highs. interest coverage is going to start falling. the fed is going to tingt poght policy this is not good for credit. i like to say that we have a problem of zerp bubbles and

liquidity crisis on our hand. >> on that note, we'll leave it, sir. thank you for your time. much more on the markets ahead of the fed. we actually have jeffrey gundlach from doubleline, he'll be on at half time report today as will lee cooperman from omega advisers. it will bejeffrey maintains the fed is making a huge error if they hike today. >> good morning, carl. a selloff today, a big build, 4.8 million barrels. at the intraday chart, immediately prices moved lower on that number. it is a big build. analysts were expecting 2 million range. the api gave us a 2.3 number last night. yesterday we did see a big move heading into the fed meeting today. it's not unlikely to see some

selling pressure today. the dollar will be an influential factor when it comes to the crude trade. i do want to point out that the spread between brent and wti really closing in, less than $1 now based on this news that we could see the export band lifted. nothing is finalized just yet. even the conversation of it is showing that you wti and brent are coming closer if they were to be on the international market. >> it has been interesting to see the pressure on brent. still ahead, former fed governor mark olson joins us live to talk about the big decision. just 3 1/2 hours to go.

. good morning. i'm sue herera. here is your cnbc news update. representative jim jordan, the leader of the freedom caucus says his group is unlikely to support the $1.1 trillion spending deal announced overnight in part because it failed to address national security concerns. defense secretary ashton carter making an unannounced visit to baghdad. he is planning to meet with iraqi political and military leaders. france using crews missiles for the first time. and for the first time the

air force is offering drone pilots retention bonuses of $125,000 if they agree to seventy-five more years. the air force is scrambling to help feed the military's need for more intelligence. those qualified would receive five installments of $25,000 or the option of receiving 50% of the bonus up front. that's the cnbc news update at this hour. carl, back down to you. >> thank you very much, sue herera. let's go over to the cme group and get the santelli exchange from rick. good morning, rick. >> reporter: good morning, carl. we have mark golson, former board of governor of the federal reserve from '01/'06. thank you for taking the time. maybe the first time in close to a decade that we raise rates, welcome. >> thank you, rick, good to be here. we will concentrate on two issues. in my opinion let's make the assumption they raise rates today. the one issue is the path and the second issue is how other

markets after our markets close respond. on the first, do you think that the fed is snugging up because the economy is strong or is it because they're afraid of bubbles that may have been created in our path over the last half dozen years? >> rick, i think you hit on it a few seconds ago when you used the word normalization. i think that's one of the reasons that the fed has to go now because there is $3.5 trillion on their balance sheet that they would like to see run off to get back to a more normalized fed balance sheet. what that will require is this liftoff, but really it's mouch more of a ribbon cutting than liftoff because it will just get process started. one thing to look for this time is in the statement, will they keep repurchasing bonds that have been matured or allow them to run off. my hope is they allow them to run off. >> mark, on the rrp program,

many people are scrutinizing the cap at least at this point in time of 300 billion. there's some concern that with the fed as a counterparty in this transaction that the interest may be large from areas like money markets. any thoughts in that direction? >> rick, i don't know that there's going to be a significant change in the interest rate structure. i think we will see a little bit of movement, but i think that the markets have probably already factored in today's rate increase and i doubt that there will be a significant impact in the overall interest rates in any denomination. if you look, for example, at the 30-year t, still under 3%. what we eliminated in this marketplace is inflation expectations. >> i got you, mark. let's go the other direction now.

our markets, i'm not sure hough they will respond. i think equities will like it. what about the emerging markets? what about the foreign exchange markets? will that change the view when we walk out of here at today's close and walk back in tomorrow morning? >> i think the emerging markets more than the exchange markets. the emerging markets, as we have learned over the last few years are very much impacted by the change and the direction of money flow. i think if there's a significant money flow that moves either in or out of the emerging markets t could have a huge difference. the exchange markets, my guess, have already built in the increase. >> all right. now, final minute here. with regard to the yield curve, there are many making a variety of bets on the yield curve. my own opinion is that the global economy will stay in mediocre growth.

with that horizon in mind, will long rates be so reluctant to move higher? is there possibilities of inversions along the yield curve in your opinion? >> i think it will remain flat as opposed to inverted. i don't see a significant inversion of the yield curve, but i do think they're going to be flat. and overall on balance, that's good for the economy. having removed inflation expectations, i think that's one of the important things that's happened in monetary policy over the last 20 years. >> mark u alwa, always a pleasu thank you. the next time we have you on as a guest, i'm sure we will be discussing the next round of normalization. >> i'm sure that's true, rick. thank you very much. >> thank you. back to the "squawk on the street" gang. >> rick santelli, stocks are rising. they're off session highs, the dow up about 60 points it was up

100 moments ago. anything could happen this afternoon. federal reserve decision at 2:00 p.m. still ahead, walt mossberg saying battery technology can't keep up with our digital devices? and a little over three hours away from the big decision. "squawk on the street" will be right back. and can you explain why you recommend synthetic over cedar?

"super food?" is that a real thing? it's a great school, but is it the right one for her? is this really any better than 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.

welcome back to "squawk on the street," a predominantly green day for the markets, but utilities, telecommunication stocks, consumer staples showing signs of life. shares of nrg energy and ne

nextera, con ed up. the sector has fallen about 10% this year on interest rate concerns from the fed. any shock from the fed this afternoon, it could lead to more volatility in these stocks. a lot of traders watching the interest rate sensitive equities out there. back to you. in the wake of last night's gop debates, some news cross being warren buffett and hillary clinton. john harwood joins us from hq with more. good morning. >> good morning. hillary clinton will appear in less than two hours with warren buffett in his hometown of omaha, and one of the nation's wealthiest individuals, the billionaire investor, will endorse hillary clinton and at the same time she is going to signal that she plans to propose further tax increases on the wealthy as she tries to pay for her campaign spending proposals. so far hillary clinton that proposed an estimated 1$1.2 trillion over ten years on new

spending on childhood education, child care, expanded college affordability, all sorts of priorities of that kind. but only proposed about $800 billion over ten years in tax proposals to pay for that most of that has fallen on the wealthy. thing like limiting deductions available to wealthy individuals. but what she plans to signal today is an expanded version of the so-called buffett rule, something president obama has planned for some time. named after warren buffett who said he paid sometimes a lower effective tax rate than his secretary. so president obama proposed to have a floor of 30% on the affected tax rates for earning $1 million or more a year. hillary clinton will propose an expanded version of that buffett rule to close that $40 billion a year gap between her tax proposals and spending

proposals. we don't know whether her plans will include an increase in the top personal income tax rate, 39.6% is what the top rate is currently. that's what it was when her husband left office in 2001. stay tuned for this we have a democratic debate coming up this weekend. hillary clinton is entering that debate by saying to her opponent, bernie sanders among others, i'm going to propose more tax hikes on the wealthy. we'll see in january the specifics of those plans. >> along with one of the wealthiest americans by her side. >> that's right. >> john, now that we digested last night's debate. foreign policy front and center. that's a big issue when it gets to the general election. how does hillary match up with what we heard from some of the candidates, whoever wins the nomination last night? >> it was interesting because hillary clinton has always staked out a more hawkish position than president obama. it won't be easy for her to

advance that argument since she was president obama's secretary of state. but the candidate who had the strongest debate last night, ted cruz, has a position that's not all that different from hillary clinton's on the approach to syria. for example, the fight against isis, hillary clinton has shied away from the idea of american ground combat forces. as some in the republican party like lindsey graham have proposed. so does ted cruz. the idea that those two could be a little bit closer than hillary clinton is with some other republicans is one of the interesting twists in the race. >> will be interesting to see whether she separates herself from president obama because last night at least barack obama's foreign policy was hillary clinton's for weign policy. that he were one in the same. >> that's right. but she has said i will do more than president obama has done in the fight against isis and will point to instances in the past

where she proposed a more forward leaning approach in syria than the president has. >> john, thanks for the recap. only eight days left until christmas. so which retailers are winning the shopping season so far? what effects are mobile devices having on online holiday shopping? we'll get brang nd-new exclusiv data on that.

welcome back to "squawk on the street." solar stocks are dom naturing the russell 1,000 index so far today. shares of companies like solarcity, sun edison, sun run, sun power all up by 14% or more. these stocks have been on a tear ever since the paris limt agreement, and they're tracking for the third straight day of gains. the solar industry also boosted by an extension of the federal tax credits which all increase residential and commercial installations here, so budgets and possibly paris climate change all of it, sarah, factoring into a positive trade for some of the solar companies, but, remember, they have taken a hit in recent days.

back to you. >> some non-fed fueled stock moves. dom, thank you very much. just eight shopping days left until christmas. amazon leading the pack. what other retailers are joining the race? joining us exclusively with brand new data, comscore co-founder jan with owes "squawk on the street. fwood to see you again. >> thank you. glad to be here. >> we'll get into the overall numbers. first, what's particularly valuable for investors is you name some names of actual big box brick and mortar retailers that are ramping up their presence on-line, and really making it known. it's starting to work. stwloo certainly amazon is having a spectacular season. if you look at the list of the top -- the top four retailers on-line, you do notice that wal-mart and target are having a very successful season, and both of them seem to be doing

particularly well on mobile. you know, amazon certainly is as well. ebay, by the way, is the second retailer there, but it's a very interesting season because leerl, the multi-hanl retailers are getting the importance of on-line. i think they're doing pretty well at it. >> what are they doing right that puts them higher on the list than, say, macy's, best buy, apple, which are also in the top ten, but are not doing as well as target and wal-mart. >> yeah. well, i think part of it that i think helps them is the range of products that they carry. if you look at the importance of mobile, there's no question that amazon and ebay, the pure play on-line retailers were the first to figure out the importance of mobile and the importance of apps, especially. the next one figuring out, interestingly, was target followed closely by wal-mart. both of those multi-channel retailers are really done a great job of figuring out the importance of mobile, not only

for price comparison checking, when you are in the physical store, but also as a device that you buy from. sfroo sales through a mobile device will approach 18% or so this season. again, i think that the multi-channel retailers have figured out their importance. they also have the benefit, of course, of being able to sell products that the consumer can then pick up in the store. i think that's a big advantage if you want to cut down on shipping costs. just give us four or five year view. especially with the big sites like facebook and google who are more and more and taking more market share from everybody else and being the port in which we live our lives. the news overnight is that facebook has very quietly launched a local site where local businesses will have reviews kind of like yelp. everybody wants to be this portal through which everything

will be carried in the future. how will the world be different gin it's hanging so fast in four or five years? >> so if you look at the social networking sites, they have a very, very significant impact on buying. it's -- but it's an influence impact. you really don't see consumers going directly from the social network sites to a retailer site to buy, so that kind of referral traffic, as it's called, is actually very low. they are big influences in a more longer term perspective. i personally don't think that the importance of buying at a retailer site is going to wane as we go forward. i think that the retailers are probably also a little -- if not a lot concerned about losing control if you will of the consumer if the buying doesn't occur on their own sites. wronk we're going to see -- i don't think we'll see the segment other than the retailer sites being the important work that consumers actually buy. >> very quickly, on this seismic

shift that you have been describing towards mobile shopping, are they spending as much when they're shopping on mobile than we see on desk top and then we see in the stores? >> well, as i said, mobile will be somewhere around 18% of all digital buying, but what's staggering is that the use of mobile devices to visit retail sites is up about 60% versus a year ago, and they are accounting for about 62% of all the visits to retail sites. in a sense, you can say that the use of mobile devices is really replacing rapidly the use of physical stores by consumers to check out products. could be a big turning point. >> thankfully it's that time of day again when weigh get to talk to john fort about what's coming up on "squawk alley" next on cnbc. >> yes, that time, simon. good morning. we're going to be talking to apple. more analysts lowering their estimates on iphone unit sales and, thus, overall apple eps.

has the skepticism on the stock gone too far? also, the debate brought up internet issues again. donald trump has some novel ideas about how it works. we'll dive into those. also, countdown to the fed. the surprise now would be if they don't raise. all that and more coming up on "squawk alley." ll children. ll children. that's right. i have read it is the hardest job in the world. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators... that's wonderful but... i can tailor a curriculum for each student by cross-referencing aptitude, development, geography... sorry to interrupt. but i just have one question: how do i keep them quiet? (pause) watson? there is no known solution. and this year, look at whate he put in our driveway. the lexus december to remember sales event is here. lease the 2016 es350 for $349 a month for 36 months and we'll make your first month's payment. see your lexus dealer.

good morning. 11:00 a.m. owe ferlt reserve in washington. it's 8:00 a.m. out west. squawk alley is live. ♪ welcome to "squawk alley." joining us john fort, kayla, myself, and post nine. john steinberg is here. the ceo of the daily mail north america. good morning on a big day. a special fed day, of course. our mike santolli joins us this morning from headquarters, and, mike, you