sweater? >> i will try to wear one the entirety of the program. i don't want to entire the entire. >> we didn't get to wear hawaiian shirts. >> we will do ugly sweaters tomorrow and a lot of holiday ties next week. >> ugly ones? >> a little ugly. >> we'll go to cramer and "squawk on the street" is next. good morning. welcome to "squawk on the street." i'm david faber. we are live. jim cramer and i. carl seen quintanilla has the d off. a big rally yesterday. we are looking for a higher open. european markets rallying in part off of our move yesterday. you can see in particular the german dax having a very, very

strong session. ten-year note yield, right around 2.3. let's call it. is that where we were? am i right? crude oil is down again. i'm sorry. it is now up. >> it just reversed. i was looking at it five seconds ago. it was down. now, it is up, as you see. .37. >> the fed raises interest rates for the first time in almost a decade. futures, as you saw, up again after that big rally yesterday. fedex gets a nice boost this morning. strong holiday online holiday season helping that company and one of america's most hated men. >> martin shkreli, once criticized for drug price gouging, he has been arrested on charges of fraud.

a modest increase under a federal funds rate is now appropriate words of janet yellen at yesterday's news conference following the central bank's quarter point rate hike. she elaborated on the fedex p t expecting to gradually raise them. that does not mean mechanical, equally sized rates. my guess is that the economy will progress in a manner that is not sufficiently even, that we will decide to make evenly spaced hikes. >> jim, you finally got it. i know you were commenting live on the air afterwards, your show. you and i have not had a chance to talk after this momentus

occasion. it was a momentus day. >> what it said is that despite the philly fed number, incredible weakness, they targeted employment and that last number was strong. it gave them the cover to be able to do this. david, the one thing i think people are getting more. stop talking about the fed now. they are telling you, listen, we are going to do what's right. we are going to take it up and get it back to normal. immediately, what i hear is, when are they going to do it? the uncertainly. the market is saying the opposite. the market is saying, we are just putting microphones in front of people and saying, come on, when, when, when? she answered it. the reason why the market can rally. not that we are now uncertain about what we are going to do. it is the certainty she is not going to do what we did going into the great recession. i regard that as being a positive given the fact that the data is not that good.

i'm stuck with a world where general electric is doing 4% and listen, the world is not that great. fedex, yes, but the world is not that great. >> that point, funny, looking at g.e., which has had a great year in the stock market for the first time since forever, it feels like. nonetheless, they are talking about 1.55 next year. >> 24 times earnings. >> thank you. g.e. trading at more than 20 times earnings. the multiple has moved up. what am i supposed to make of multiples like this particularly as i watch the industrial economy suffer or certainly slow dramatically. this week alone, whether it was dover or 3 m, you can name a bunch of companies that are suffering. >> when people are excited about

2%-4% organic growth, it is working. they got rid of financial. >> they will be desefide. the market has responded. when you look at a multiple, it is up over 20 times. >> honeywell, david, the stock was up the most on a 2%-2% grow -- 1%-2% growth forecast. it has to do with they didn't screw it up. fedex has a good story because of all this free shipping. you may be paying too much for stocks given the facts that rates are going up. you may be paying too much. >> back to the fed, though. if you want to put them over here, that's fine. at the same time, there are those that say, listen, rates are headed up. we don't know what's going to happen. there is still going to be the

uncertainty of not having gone through a period like this where we are not sure what's going to result from higher rates. >> rates were much lower than the last few tightening cycles. >> people on twitter who were wearing diapers when i went through the '80s cycle. you are fighting the fed. the late marty swy said, when they switch direction, you can't be as bullish. that has always been right for me. marty swy was a legend for a good reason. don't fight the tape and don't fight the fed. these are the things he put in the head. he said, i'm not worried about the fed fighting the fed. >> you have ge which is consistent and giving you that 4% growth on the up side. except for the fact that the value is so great, g.e. used to

have the lowest and emerson the highest and ceos figured out and emerson is doing quite poorly and ml&g are doing quite well. we pay up for that stock. is that right? is it right to pay up 77 times earnings for sales force. with oracle trying to come after them. is it right to pay? >> these are the questions investors need to ask themselves. >> if they don't, they are not realizing this is now the time for markup. we have got the last thing in our way. a fund that is doing well in these growth stocks. >> don't have that many more trading days until the end of the year. it was amazon, netflix. i don't have to tell you. it was the same old and then there was the clorox kimberly, because they don't raise rates really fast. those still have a relatively good yield. in the end, it was guys coming in with s&p futures. there is really nothing left.

i've got to show more investing. i've got ton in there as we walk up stocks into the year end. that's not what i want to do. the dollar is up. the dollar a little weaker today. interest rates are going higher. the dollar has been up. >> you seem confused to me, frankly. >> does anyone ever come on air and say, i'm confused. >> i'm confused, because my discipline says the fed has never had rates down in my lifetime. my confusion, is, are you really fighting the fed when the fed is sol so low? >> and profits are slowing. >> and profits are slowing. other companies are doing better given the fact that the dollar is getting strong. the only company that said

things were better was cvs. cvs is the least economic sensitive. goldman downgrades today. we are in a period where you have to be more neutral than you were. no one wants to hear that. what they want to hear, now things are great. they are neutral. i'm a creature of this. so what do i like? avon, i like that. why do i like it? >> because they have money and they are not going to go out of business. >> they have $107 million. >> the stock goes up. >> we took care of the avon lady. >> let's get to fedex while we also have a little time. it is certainly a bar am tom te the broader economy or seemed to be. higher base rates and cost cutting, results did come in above the forecast. set a record number of holiday shipments flowing through its global network, jim. >> if you can put through a 10%

price increase and have a 9% increase in the amount of packaging you are sending and revenue on fedex ground, that says that all that free shipping that people did, it went to fedex's bottom line. fedex at the end of october gave you a kind of tepid forecast. it has become very hard to figure. they raised prices. what you see is that even though international was not good. it is only 10%. the big winner here was you ordering from amazon and walmart or whatever fedex does well. that was a standout. >> by the way, the holiday season, when it is not malls, is looking pretty good. >> should i get a read for ups that i see is going to be up maybe 2%. >> ups did change their rules to make more money per package, which is exactly what fedex did. ups has not done well in the last two holiday seasons. it is hard for me to believe they could do poorly again. however, if you roll the tape

back at this point last year, you asked me. i said they did really badly last year, it is hard to believe they could do bad again and they did. let's just say it is suspect. they made some changes, logistical changes that should impact things positive. i get why they are up. gee, fred smith really delivered for holiday packaging. if ups didn't, they are going to be in the penalty box for ages. >> if they didn't hit this quarter. a lot more coming up. >> we are not going to talk about the hedge fund manager. >> we are. >> we are going to take a little break and then get to martin sk skherli. >> he never worked for cramer berkowitz. >> for me. but daniel craig, this is the villain. >> i am seeing her more as

dr. evil. >> there is a clown of suspect to mr. skhlerli. he is not specter. he is more dr. evil. we are going to get to him, by the way. meg terrell is uptown. she is going to give us the latest. is that gentleman we discussed taken into custody. >> look at that stock, pandora. we are going to talk a lot more about that. getting a positive ruling in terms of music royalties, i have a lot more on that. another look at futures before we hit the break. we are looking to add to what were significant gains yesterday. the s&p trying to eke out a gain for the overall month and year. ai lot more "squawk on the street" from post nine. here at the td ameritrade trader group, they work all the time.

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this morning, martin shkreli has been arrested at his new york city resident. >> you interviewed mr. shkreli when he raised that particular stock or drug price some 700%

and put himself in a spotlight that doesn't seem to have ended well at this point at least. >> yes, but it is not for raising the prices of drugs. the charges are thought to be about security fraud related to his former company which has sued him for $65 million and similar charges claiming that he used retrofin to pay back his hedge fund, called msnb capital. there is going to be a press conference at noon. there will be representatives there from the fbi and sec. we should also mention that in addition to running touring pharmaceuticals, the company that raised the price of that drug took a stake in a small bio company, the stock has been incredibly bio, going up

enormously after he took the stake and became ceo. this morning, dropping 53% before being halted. this is a micro cap company. because he is ceo, we are mentioning it. news conference coming at noon today. >> mr. shkreli, he is only 32 years old and he has done a lot, including having been an intern, they love to say, at your old firm. you really weren't there when he was there? >> let me just splap. people love to throw that in. i was hedge fund manager and the city had a program where you could hire interns, poor kids from the city of new york. i called them and they brought this guy who was 17, he opened mail for me. he was an intern that the city provided. later on, i left the firm,

cramer berkowitz and my old partner did hire martin. i don't know much about him. when you hear cramer berkowitz, he was my protege. i hired a kid from the city as part of the internship program. they did hire him. i don't know the circumstances and don't want to cast aspersions. i was not there e w. he was not hired by me. >> call the city, do something good, put a kid to work, 17, opening mail and stuff. now, he is my protege. geez, protege. >> did you read the tweets that he did? >> i have read some of the tweets. >> did you hear the alias tweets that were sent from retrofin, under legit biotech. bad boy is going to rip higher and them sucker ass fool it's

are going to be still crying. he was tweeting that he was not selling rtrx. this stock is really cheap. rest knew assets over $25 a share. he was engaged in the sale of stock. some would regard that as potential, alleged, could be, who knows, i can't say, security fraud. when you are saying you are a buyer around you are actually a seller. you don't know. you can't be for sure. innocent until proven guilty. >> we will see if the government can bring a case and what the evidence is to support it. >> the guy spent millions on the only copy of a woo tang clang aclang album and wouldn't listen to it. >> let's just say, the justice system. i will leave it as that. adam foreignstein did a piece for the street. they are hysterical, david.

lots of bio babes here in sd. biobabes. i just want people to read it, because it is hilarious. i guess the government did. they probably took a gander. it is called carma, david. what goes around, comes around. >> we are going to have a lot more, including cramer's mad dash. excuse me. maybe with e will take a look a pandora. we will be talking that and hilton and a lot more. we will take a look at futures. more squat in the street right after this.

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mad dash for thursday. seven minutes before the opening bell. >> this stock is going to be up, pandora. it was initially down. after hours, it dropped 10%. as people read the fine print, they went crazy. what is the fine print here? >> the fine print is the rate is going up in terms of what they pay for 100 songs. you play a song 100 times. you are paying 15 cents now. 17 cents next year. usually, it goes up by 1 penny a year and now it is going up by two. you have a five-year set that goes up by cpi. that is seen as favorable. of course, also, to the point we make so often, certainly. so you have an understanding of what their royalty rates are going to be, they usually run about 40%, 50% of revenues for

pandora. it is trying to become the free national scale streaming service. investors are responding very positively at this point. they do have that premium product at a lower cost than spotify. it is like $3.99. it is the free product that has prevailed as they look at the marketplace. they win in free streaming. no revenue split. if pandora gets to a certain revenue level, they will have to start splitting revenues with the artists. the certainly of knowing how much it is going to go up. >> cpi is not going up. what a win. what a way to keep inflation. >> big picture is, you have this certainly. if there is a potential buyer for pandora, they now have a much better road map. >> someone might be a buyer. >> david, the short is here.

>> only a $3 billion market cap. interprize value. there are plenty of others that might be interested. >> you can actually figure out what its revenue is to be plus or minus as opposed to before this, you didn't know whether they were going to be like this. >> you were very concerned. that said, there is not a global agreement. people still hope that perhaps one day they can get a global agreement. that might put them in a position to compete more effectively with spotify around the world. >> all i can tell you, this is a big retail name. i don't like sirius satellite, mobile eye, certain names, gopro. it is going to get a big boost. literally, i think a lot of people felt this could go horribly. a very big change. >> we will watch pandora shows, looking up as much as 18%. a lot of other names to get to, oracle. we will come back to fedex in

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you are watching cnbc. the opening bell will be ringing in one moment. when it is the two of us, i like to turn to you and say, what is the key to this market? some days it has been valiant, other days wti, sometimes the bank. what about today? >> i am looking at general mills. my friend likes this consumer products group. i have always said, you have to be very careful. i am not saying she liked general mills. watch general mills. the numbers, david, were hideous. if that stock goes up, it is really horrible. what you know is the people just want safety no matter what. i don't regard the stock as safe. i think that the numbers, the 82

cents on the street, down 4% retail. they brought back $549 million worth of stock in the first half. they have a good yield. >> they don't like it when you ring and then you don't ring and then you ring again. hence the boos as you hear the bell ringing for the opening of trading. take a look back at the s&p. 500 real time exchange. here at the big board, avangrid, a diversified utility company celebrating a new lifting. over at the nasdaq, capitol acquisition, a public investment vehicle. they did the honors this morning. avon, not a name we have mentioned. it has been nothing but pain for years for this company. i heard you say you spoke with the ceo, sharon mccoy. on this deal where they are selling the u.s. business to the north american business or 80%

to surbrus for $170 million. >> a chance to be able to grow the business. sherry still believes in it. she worked at j&j. she is at the top. she came into a situation that was far worse than i think she realized. far worse. really bad hand. the hand kept getting worse and worse. no dividend. what is she doing? the answer is, this was a question i think they had to save the company. they had to sell a stake. you did a little better than i thought you were going to do, even two or three weeks ago. >> it is hard to imagine the north american business is worth less than $200 million. >> i have talked to a lot of people in the direct selling industry. this was regarded as being a nifty fifty stock and just regarded as being a spoiled property. sherry would manage to get some money for it and it lives to play again. how about that? >> their key business is, as you

might expect, outside of the united states. they have been having plenty of problems, whether it is brazil or other markets. >> oh, geez, everywhere, frank. it has frankly been a disaster. those that owned it, many have soured over the stock market, because it was a company that people thought was a blue chip. there is no such thing as the term blue chip anymore. there aren't blue chips. general mills one one of the great dividend aristocrats. they can't move to natural organic fast enough. the winner is a company that sarah eisen and i love. kroger. they have been able to strap the margins. they have done that with their fantastic private label brand. it has been the winner in the supermarkets. >> another stock we like to keep track of certainly is oracle. the company recording numbers. they are not being particularly

well received. they were ahead by 3 cents. 63 cents a share was the adjusted quarterly profit number for the software database company. revenue is below forecast. obviously, the strong dollar, certainly an impact for them. they did say they expect lower numbers for the current quarter. they are transitioning to cloud based subscription models in some of their services. >> when you get totally focused on the cloud and you have to move your business, a lot of people found you have the stars cloud coming. when you read through the oracle conference core, what you are sure of this, they are doing well in the cloud. there are other businesses. now, mr. elson has built an incredible company. they have $10 billion in cash net. they are doing a lot of things that are right. when you ship over to the cloud, you have this other cool business. it is kind of like what's happening with ibm. no one wants to be, fortunately

or unfortunately, compared to ibm. the runoff business is doing much worse. david, if oracle is a mixed picture, the stock was up. people felt, the cloud is strong. this is a defining quarter in the sense that the cloud may be strong but the rest, i don't know. i want to contrast that with adobe, where the cloud gets stronger and stroenger and you hit a 52-week high. they manage to straddle the old and new. these are famous business people in the firmament. >> we are talking about a company with a $165 billion market value. foreign excess to $135 million market value of ibm to put it in perspective. an enormous company.

>> i think that's a good point that you mentioned. a lot of people don't understand that stocks that you like tend to be not big companies. once they get this big microsoft is the outlier. >> they were in the wilderness for a long time. >> really, manna from heaven wilderness, 40-year thing? >> we are putting air in a box wilderness and we don't have a growth plan and suddenly, the cloud and it is all off to the races. a very strong year for microsoft, up over 21%. >> have you met sacha? >> i have not met him. >> quite impressive. forward looking. you think we are not cool. nfl, take a look. they all use the service. xbox 1 is the preferred box for

everybody. i had that with bobby kodak. a little dispute of how well the star wars game is. gaming is amazing. activision was one of the best performing stocks after qe 4. xbox is a winner. i wanted them to break off xbox. i have been value acting that. now i have come around the idea. don't shrink to grow. you are growing. i have been won over by the microsoft people. maybe i am drinking the kool-aid. >> it has been a shrink to grow year for some. i want to get to the banks, jim. it makes sense we might want to look at how they are performing now that we have left the zero bound as they like to say with 25 basis points. it is a mixed bag. everybody raised their primary. of course they did. they always do after a rate hike.

it has just been so long. >> they are not raising your deposit rate. we always talk about net interest margin. that gets to it. does it start to improve? >> immediately. even 25 basis points can improve. you get a full 100 base points. you start seeing nervana. because of the great recession, they were able to divide the country. their deposit rates were so big. jpmorgan has tremendous love. you don't have to e-mail me and tell me that. i don't stand corrected. at the same time, they moved. in this market, you won that game and then there is another game sunday. next man up, david. it is next man up.

like the fantasy pool, are you in the semis? >> i am not. my son is, i think. >> do you think he is going to play him against the giants? >> giant fans don't think so. >> the other guy has o'dell. >> a lot of things in place. >> ten, 11 wins may not get you a playoff spot. >> why is this an exciting moment in the market? it is the end of december. >> it is that exciting of a moment. if you say so, i believe you. >> victory. >> what's down 6%? newmont is down 6%. >> gold has been strong. that's been wrong. this is maybe a little reality seeping in. we have this caterpillar x. all these mineral, chesapeake, they don't benefit. a world of pain. >> we haven't locked at kmi,

crude oil again. 1570 on kmi. we talked about it nonstop for a week, week and a half. >> the most tainted stock in the group. rich kinder, the 75% distribution, dividend cut, they are in the penalty box for a long time. >> stock reacted to that. is this where it finds its home, the $15 range? >> maybe see the next two quarters. the last two acquisitions were bad. i think some companies benefit from having the pipe to ship oil ov overseas. >> you and i have talked about the decision not to slip the company. jpmorgan, up to an overweight. that stock, still down 32% the last 12 months. having a good day. >> i embraced it when it got

down to 252. people are saying, that. i want the chinese to start paying for the intellectual property. they should be more forward about talking about that. maybe you can't because it is the party that controls things. >> it is hard to be particularly critical to leave the market. >> if you go against the party over there, what happens to you? it is not good. how about if you google somebody in the party? >> silence. >> is silence golden or deadly? >> it depends on your perspective, doesn't it? let's get to bob pisani, for whom silence is never goldinen. >> it is tremendously exciting to get this albatross around our neck and finally move on. let's take a look at the sectors. modestly positive. dow up about 40 points. you could see modest strength in

industrials and financials and tech. that's faded a little bit. consumer staples and health care were lagging. this defensive tone has flipped around a little bit as the fed announcement happened. if you look at the markets, europe and asia were up 1% to 2%. cu cure curiously strong markets were up. the fed's own internal projections talk about four raises next year. right now, the street is believing less raises than the fed is anticipating. let's take a look at the emerging markets. what's curious here is generally, the fed raising rates, not good for emerging markets. they have to reduce rates and

make themselves more competitive. that makes capital flight. these stocks have been very oversold in the last few months. again, a bit of a relief on the hopes that the pace of interest increase rates will be lower than anticipated. here in the u.s., once quadruple will be tomorrow. the short-term trend is up. we are at a seasonally strong period in the end of the year. tax loss selling abating. a lot were underweight stocks. oil and high yield. if you look at oil, all we have to do is stabilize around here, $35 or $36. that would support a modest rally in the markets. if oil rallies and moves anywhere else, anywhere near $40. the oil stocks will cover immediately. if you think this phenomenon is not real. energy is the most heavily

shorted. nothing else is even close to it. consumer discretionary, telecom industrials. if you think this is not a real phenomenon, this happened this week. take a look at chevron on monday and tuesday. now, remember, oil went from about 34 to about 38 between monday and tuesday afternoon. chevron rallied 10% in a 24-hour period. it was $85. it went to $93. this is not some tiny little company. we are talking what, $180 billion, $190 billion market cap company that moved 10%. i kept pointing this out. even though the volume was strong. the market sort of took it in stride. if oil stabilizes or rallies in any way, energy stocks are going to work with it. high yield has been relatively stable this week. down just a touch today. it is still up about 1.5.

the biggest of the high yield etfs. as we all know, energy is generally the largest component of bonds in this group. if you get stabilization in oil, you will also get stabilization in a lot of these high yield sectors. what i'm saying here, david and jim, oil right now really does hold the key for any further rallies. if that happens, short-term, we are looking pretty good. >> guys, back to you. >> thank you you very much, bob pisani. >> check in with rick santelli at the c&e group. >> look at the two-day versus the dollar. let's take the mere image and look at the $2 index. now, let's open that up to a month to date dollar index and the month to date dax.

fx is where the transmission is going to be in. ways for any central bank including ours. we want to pay close attention over the next several sessions. as for the interest rate conflicts, really did digest it well. it was well telegraphed. it is the first one. a two-day of two-year. you can see it is holding on to its losses in price, gains and yield. contrast it with the long end. a little different. a little bit of a flattening buys a. all yields are down 2 basis points. fi fives, tens, 30s. this is the pass. 178 was the high yield clothse

the year. let's start on june 10th. yesterday, we got right up to the shore, dipped our toes in nd adidn't cross the threshold. if the fed tightening is going to wake up the curve at some point because of the 4 x transmission, here is where you are going to see the first for yield curve. 178, the fives. david, back to you. >> rick santelli, coming up, mark mahaney has his 2016 forecast for tech stocks. find out who he thinks will be the biggest winners. we will be right back.

there will be costs. but like there was cost with food with integrity, we still managed to have industry leading margins. as you know, we are very conservative when it comes to taking price increase. we don't do it often or much.

>> that was chipotle krchtceo, els on "mad money" last night. the stock has dropped 10%. >> it is down far less than i would have expected they are buying back stock aggressively. they have tremendous conviction that the customer will come back. they did admit that the 40 some odd stores that they closed inned northwest that the business wasn't good. they admit it is soft. they are also going to bear some margin pain because of all the safety they are going to put in. what they are betting on is long-term allegiance. long-term, people don't want to eat processed food. i think it is a good bet. i don't know if i want to buy the stock. the quarter is going to be hideous. they said they are going to make money. there is a long-term love. people like vegetarians like my daughter. where else am i going to go?

>> so the trend is their friend. it looks like they were in at that 500 level. they are smart. >> if they are the safest and also the organic king, it will come back. these people are not restauranteurs, they are unbelievable retailers. this he are few and far between. >> up next, we are going to have stock trading. squawk in the street is back right after this. announcer: sunday's your last chance to save big

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time now for jim and stop trading. what do we got? >> you asked me at the top what will happen post this? remember, we don't get a lot of benefit. i'm still not hearing, it's so great oil is cheap, other than the airlines. we get the down side. david, there are going to be many bankruptcies if it stays here. many. honeywell yesterday they have big chemical business. they are saying 45 to 50 next year. that's the sweet spot. almost all these companies will

exist there. the saudis are in charge. no one ever underestimated how much they pump. there was a press conference. it was unbelievable. he is going to pump like mad. >> his economy is reliant on the price of that commodity. did martin shkreli, he was definitely watching the putin press conference. they got that thing going. all that said, this he have that thing going. >> they will base it on the price of the commodity itself in terms of the collateral and shorten up or tighten up those lines. we could see some bankruptcies. on the flip side, why haven't we seen the benefit in retail where, for example, broadly speaking, a year ago, many would have said that lower gasoline prices would have been good for the consumer. we are going to see more. >> let's see darden tomorrow.

when you get up to the desk, with when people in the credit card companies say they are saving it. they don't believe gasoline is going. country has changed. we are not as profitable as we were. if you look at jcpenney, david, you look at some of these retailers, when fedex says the business is great, that's free shipping that they bear and amazon is just killing everybody. >> everyone. >> bellow $7. it is probably the most deflationary force. the fed should talk about it. the fed did mention, by the way, third avenue. shi was asked a question. the chair woman. there are still other funds that i'm looking into. that i am going to be writing about. >> talking more about high yield later in the show. what are you going to have on your show this evening? >> the reason i want to mention it, we have ann taylor and

what's going to happen, we have to find out where that money is going, okay? why is it going or not going? this small base strip mall and then con ed. >> con edison. >> a smaller company than you think. they don't have plans. they pipe in natural gas. my daughter was telling me that one of the places for some property we have, this he want to put a pipeline underneath. suddenly, i'm pro pipeline but not in my backyard. >> we'll see you tomorrow on "mad money." on fedex, more positive on the earnings. the stock is rekt aing reacting positively. we'll have more.

who do you work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. welcome back to "squawk on the street." i'm david faber. we are live at the new york stock exchange. carl has the day off. let's look at the markets and

loyal, of course. after a big day, a mixed picture. oil is down. it has been bouncing around. wow, don't see it often below 35, where we are right now. >> simon, we have some breaking news with josh lip ton. >> simon, just now, apple announcing some big changes there. specifically, apple naming jeff williams as the chief operating officer. jeff williams has been at am for a long time. he is the man in charge of operations. when you think about apple's big complex global manufacturing chain, that is jeff williams job. tim cook used to have that job. some might read into they might be grooming jeff williams as the next ceo. simply pointing out he has been at this job already for a long time. also, johnny schrugi, apple

executive team. senior vice-president for hardware technologies. when you think of apple's battery, displays, chip set. that's johnny's job. peel back an apple product and you are can looking at johnny and his work and his team. phil schiller. he is going to still be running marketing for this company. he is going to be taking over control of the app store. not too surprising. he had been responsible for a lot of that activity and int action for the company. a new responsibility for phil schiller here. ed eddy "q" will still be the man in charge of content, apple tv, apple music, itunes. his role has greatly expanded in the past 12 months. some big changes here for investors to take in this morning, guys. back to you. >> a lot of profiles to write for the press. thank you very much, josh. let's send it over to rick santelli for breaking news.

>> up 0.4 of 1%. better than expectations. ses squen sequentially, lower than last year's .6. to find a higher one, you have to go to the 1% read in july of 2014. this is the one bit of decent data we have had in the last several days. interest rates are still coming a couple basis points lower than yesterday after the rate hike. everybody keeping their eye on dollar strength, zero weakness an the equity markets in europe liking that. simon, back to you, sarah as well. >> rick santelli, thanks very much. we are going to go to our top story. the fed finally moving and hiking interest rates. our own steve liesman was in the news conference with janet yellen. also spoke with greenspan. very timely to talk to him. i guess you had to be happy with the market reaction. >> i think so. before that, i want to get to

some breaking news. i just got off the phone with luke cramer. they do trade in the fed funds rate. it was trading at 9:00 around 35 basis points. it is close to the mid-range in the fed's target of 37.5 now that it is 25 to 50. there was a major question about whether the fed could hit its rate and what it would have to do to hit it. with he will learn early this afternoon about the financial operations to help hit that target. today, as sarah mentioned, i did talk to alan greenspan. he said he was not surprised that the markets rallied after the fed hike. >> it became apparent that the fed was just going to raise the rates and then not do a whole series of rates. basically, the markets just said the uncertainty is gone.

therefore, income earning assets go straight up. in is a classic case of this. >> how high will rates go and how fast will they get there? here are some of the early forecasts for getting from people on the street. ian shepherdson at pantheon says the next hike will be in march of 2016. over at oxford, the next hike it june, 2016. barclays and pnc saying they look for three rate hikes in 2016 and 2017. jpmorgan/rbc, four hikes in 2016. the cnbc fed serving before the meeting showed that the market expected just two rate hikes in 2016 for a year-end rate of 90 basis points on average. the new you fed doc plot that came up, four rate hikes for a big difference there. one hike every other meeting. unclear how that will be resolved.

does the fed come to the market? does the market come to the fed? one thing to consider about 2016. it is a more hawkish fed in 2015, which could mean slightly more rate hikes rather than less. one of the things a former fed chair, alan greenspan did suggest some concern about the trade in high yield bonds right now. >> surely, not five rate hikes, though, with a more hawkish fed. >> no, not five. i think four is probably the up end. the argument is 2 and 4, simon. the question is where you come out. >> i get it. >> our meeting is 3 from our fed survey. that is pretty decent. >> that is clearly the debate for next year. steve, for the moment, thank you very much. for more on the fed, the economy and where the markets are trading, michael santoli joins us and bob matere. let's talk about the market reaction. there was a lot of concern that they would be holiday thin. art cashin says you might not actually know the reaction until

tuesday or wednesday. it is a major expiration on friday. so far, so good. >> they were obviously well prepared for the suspected thing. they really did get the market expectations in this direction. however, if there was a little bit of residual doubt, it was obviously kind of banished by the comments by yellen. that's why you have got the immediate relief rally. the pattern is, when you get fed day rallies, you often do give it back over the subsequent weeks and not permanently, of course. you have that bleed away a little bit. yesterday was definitely a welcome response, if you were janet yellen but didn't really settle the issue. we are still kind of in this trading range. still a slave to credit and oil. it is also a defensive tone to that rally. >> nonetheless, we are in the range given the fact that we had the taper tantrum earlier in the year. we had all that concern in

august over what was happening in china. do you think this lack of action so far in the markets will embolden the feds for more rate hikes? >> i think it is too soon to speculate on that. i don't expect the markets to be turbulent. i think they will be relieved to have that chinese water torture end for a while. i think the markets are going to do fine. i was kind of concerned about how sloppy it would be and the mechanics of setting the fed funds rate. this is something steve has been all over. he is about the only one i have heard talk about it, that is the fact that all these excess reserves will make changes in reserves not very sensitive to interest rates. they have to have new tools. the new tools are using the interest on excess reserves or interest on reserves on the one hand and overnight reverse repos on the other hand. >> i'm for central bankers and

people with fixed incomes, clearly, that's a huge issue. for the rest of the market, the main concern now is that the fed is still predicting. it didn't really move the dots four rate hikes next year. the market thinks there will be two. how is that resolved? do you think we truncate what the fed will do or some nasty surprises for the market? a more hawkish fed as we work through next year. >> my guess based on my experience there is that they have to idea -- they don't have a plan. there are eight fomc meetings in the year. so four would be one every other time. i would think maybe three is more likely than four. it is just a guess. >> mike, there is this view out there that what we are seeing even now in the last 24 hours, the last few weeks of the year, is sort of skewed by the end of the year, santa claus and relief that the fed finally moved. you have a pretty bad combo of

rising interest rates an falling profits. that's not a good recipe. bank of america says, we are a seller of risks, because of that. >> the test is the falling profits thing. absolutely. that's what has made this moment very unorthodox. normally, stocks and profits have been rising. that's why you have a push/pull. that's why you have this tension between what's good for main street versus wall street. that's been in reverse against wall street for the last year or so. >> bob, can you pars janet yellen's language in the q&a? was it hawkish or dovish? i'm looking at the price of gold, getting hammered, down $26 as the dollar shoots higher. that's a how can ish reaction. we saw that euphoria, that celebration from the equity market. >> when i listened toen gentlemjanet yellen, she was trying her best to be dovish, reassuring.

you get a shot and the nurse tells you, this is not going to hurt much. she is saying, this is not a dangerous thing. this is not major tightening. policy will remain easy after this is over with. don't worry. >> it was language that soothed at least for now. >> up next, a big holiday shipping season feeling the quarterly results of fedex. it is up sharply. will the up side continue. could it mark a turning point for the transports. "squawk on the street." we'll be right back. victoria stilwell, you appear on tv working with canines. are you a dog lover, watson? i do not own a dog. but i work with veterinarians. how do you do that? i help them analyse over one hundred thousand pages of medical studies.

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martin shkreli has been arrested on charges of security fraud. meg terrell is live in brooklyn where the charges originated. >> we are here in brooklyn waiting for a 12 p.m. press conference where the u.s. attorney is expected to unseal an entimt charging shkreli and his lawyer that served as outside counsel. he is known as the one that raised the drug 500%. they did remove him as ceo at the end of last year.

it is thought that the charges are related to him using retrophin to repay the capital. we did reach out to retrophin. they say they have cooperated about the government investigation but could not comment further. this press conference is expected to start at noon. oftentimes, when a defendant is arrested, they will appear in front of a judge the same day. it would happen just behind this courthouse at noon. back over to you, sarah. >> in the meantime, we came out to post six for fedex trade. that's a story here. some holiday cheer from the giant after earnings managed to beat the street and revenues came in better than expected. want to welcome brandon oblinski. who is upbeat on large cap transports. you think this is a turning point for the transports for

this better number from fedex. >> good morning. thanks for having me on. happy holidays to everyone. i think there is clearly a diverse generals in the economy right now. we are seeing that at fedex and our other coverage. industrial production is now negative. rail volume is down 5% to 6%. fedex on the ground side is seeing e-commerce growth drive volumes up 9%. this is something that broader markets are struggling with right now. we see the fed raising rates. employment numbers look good. the investment side has decoupled with the strong dollar. i'm not sure this is indicative of a big turn for the sector. >> citing weakness in industrial production. it is hard to glean what it means for the economy. we looked at fedex and ups as the major transports of the economy. they are doing better because they are cross cutting, they are

doing productivity. fedex is in a multi-year restructuring program for one of its businesses. how much can we attribute the quarter to that versus the economy. >> i think fed examiex say it w profit improvement plan. it looks like fedex is taking quite a bit of cost out of their legacy express network where they fly for next day package demand. they are seeing much more strength in their ground delivery business driven by e-commerce. the management team understands the environment is very soft from a global industrial perspective. >> just allow brakes on that if you would. what is the broader context? clearly, the industrial sector is under some pressure. we saw that with ups. they were forecasting it would contract for the rest of the quarter.

e-commerce is doing extremely well. the commentary is that amazon is killing it as never before. what are the proportions of the business? is this a way to play e-commerce despite the way that you have the drag from the industrial sector. >> e-commerce is about 40%, 50% of both fedex and ups. specially at peak season. >> just other day, my wife said we have had three ups trucks show up at our house in one day. it comes with a cost. the brick and mortar retailers are struggling this holiday season. amazon is doing better. i don't think the volume of what we are doing is changing but the way we are distributing it and coming through package networks, it is growing. >> does fedex have a competitive

advantage? >> incrementally, i am encouraged by fedex. nonetheless, that's a pretty good income. part of it is they do have a more sufficient ground work than ups. to some extent, i think we are playing that out in real time. >> we will keep an eye on this one today. thanks for joining us, brandon oglenski. >> in your bank account, why arguably, you will pay more for loans but they may not give you more in your savings. we will give you more when "squawk on the street" comes back. when a moment turns romantic why pause to take a pill?

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let's bring in art cashin director of floor operations from ups. >> they hike. many didn't think they would. >> they painted themselves into a corner and they had to do it.

i agree. the reason they did it was not because of the economy but because they talked themselves into doing it. i think it is interesting. you got a muted reaction. you are seeing many of the reactions you would have expected. the dollar is strong. ghost is getting pasted. this is a little strange. >> i agree. they painted themselves into the corner with the market expectations. the data mostly moved their way. besides industrial and manufacturing, they needed another strong jobs report and they got that. the more worrisome would be if they set market expectations and the data doesn't confirm another rate hike. with i do they choose, the markets or the data? >> i didn't see the data quite as strong as you apparently feel that it is. i am also puzzled about the mechanics. they decided to raise the amount they are paying on the excess, free reserves that people are keeping at the fed to 50 basis points. so they claim their target is a

quarter to a half. they are already paying banks absolutely risk-free, a half a point to keep it where it is. what will that -- how will that encourage banks to lend? banks won't even lend to each other. fed funds are when you need reserves and i have excess and i lend them to you and charge you a certain amount. >> particularly as the banks are not going to pay you more on your savings. they will take your savings, thank you very much and they will lodge it with the feds. >> whether we are safe and have got through this and crossed this bridge safely. you are very clear the market reaction may very well be delayed. big expiration on friday. >> massive. >> next week, we get holiday thin volumes. >> it will be thin volumes but you will begin to look and see what's happening with emerging market currencies. you also see the chinese

currency has moved to a four-year low. you are going to see more of that going on. >> as i said, you saw a delayed reaction this morning in the markets. >> one of the questions is, do you see it over the next few weeks or can we still eke out a santa claus rally or are we stealing it from next year? >> you can still have a santa claus rally. what i'm concerned about may be more erosion nary than suddenly disruptive. we will see what comes. >> multiples are getting higher and higher as the dollar moves up in particular for some of these multinationals. >> absolutely. that's going to be a problem. yesterday, it looks so well. looks like the dollar move was very mooted and whatever. that's all changed. >> interesting days to say the least. it continues. >> you are wearing such a cheerful tie. you don't sound that cheerful. >> i try to be in spirit with

the holidays. >> at least with your wardrobe? >> yes. speaking of one section of the economy and of markets, how does the fed hiking rates affect your bank account? >> changes already underway. >> you were just talking about a few of them. the banks moved to implement some changes right off the bat. for your bank account, they will be incremental. banks moved to increase the so-called prime rate by 25 basis points following the feds fund rates. it is effective immediately. it will mean slight increases in interest payments for people who carry credit card balances or have adjustable rate mortgages or home equity lines which are all priced off of this prime rate. bank of america, chase, citigroup, wells fargo, pnc and most of the regionals. among the banks making that announcement, as soon as the fed gave the green light. you will see it show up in one

to two bill cycles. if you have had a fixed rate loan, expecter bank to roll out the red carpet and a sense of urgency. bank of america sent this e-mail, take advantage of today's low rates. they may be gone tomorrow. tomorrow being today and using that specker of higher rates to lure in potentially new customers. what they are not trying to lure, as you guys just talked about, is more deposits. no banks announced a rate to the standard deposit rate. historically, it has taken 2 to 4 hikes to be implemented during the rate cycle. richard rand writes that due to excess liquidity and a lack of competition, he says, this cycle could suppress deposit repricing through all of 2016. don't expect savers to earn anything for quite some time. we should get more details on exactly how these plans will take place during earnings calls. the fundamentals of the banks

are still spotty. analysts have taken down q 1 earnings. expect it to grow 2.6% down by more than half. >> interesting to watch the banks. they are the best performers. straight ahead, some executive shake-ups at apple just announced this hour. the company naming a new coo. what it means for the stock trading lower right now by half a percent. after the break.

welcome back. i'm jackie deangeles reporting. a draw of nat gas is down 34 billion cubic feet. this was not expected. we were looking to see a build. nat gas was rallying ahead of this. we are coming off of 14-year lows. it has a little room to go up. i imagine it is probably moving in that direction right now. but, look at the weather forecast. it is supposed to be 60 degrees in new york next week when it is christmastime. december has been a record month. and, remember that we do have record amounts of nat gas in storage. we could potentially see more pricing pressure. proo probably for today, a little bit of buying the dip here. thank you so much, jackie. here is your news update. walt disney world will add metal detectors as part of a security policy. they are discontinuing the sale

of toy guns on disneyland resort and properties and no longer will permit the items to be brought into the theme park. guests over 14 will no longer be allowed to wear disney costumes into the park. >> u.s. and cuba have reached an agreement to restore commercial airlines. the pentagon acknowledging ashton carter used a personal e-mail for government use. his press secretary released a statement saying he realizes he has made a mistake. just mayo says it will get to keep its name. its maker is hampton creek. it says it has worked out an agreement with the food and drug administration which let's the eggless spread keep its name with a few changes made to its label. >> was that a dog licking that man? >> all right. that's the cnbc news update. sarah, back to you. >> i couldn't tell, sue. thank you very much.

>> i think it was. >> sue herera, back at hq. >> we are watching shares of apple announcing some major executive changes this morning naming jeff williams to chief operating officer. he oversaw the development of the apple watch. joining us now by phone to tell us what it could mean for the company. piper analyst, gene munster. >> obviously, this is a big deal. apple hasn't had a coo since tim cook was coo. does that mean that mr. williams is air apparent? >> you are probably about a decade ahead of yourself there. that makes a lot of sense. i think there is a big role to fulfill. tim cook used to have this loel and he knocked it out of the park. there is probably some connection between jeff and tim. if makes sense that they are kind of obviously rolling out bigger role for jeff williams. >> can you tell us a little bit about who is jeff williams and

what he does? >> he has been with apple since 2007 he is the senior v.p. he had other different roles. so think of him as a strong utility infielder now that has a focus as a coo. >> how should we view this change? there is the question of succession. beyond that, is this, gene, tim cook rewarding people, giving the guy that probably wants coo effectively anyway, according to the commentary, the title and presumably the salary that goes with it or is it a company that its making other executive changes in advance of what could be a difficult time in terms of external pressure if iphone sales actually dip. clearly, the stock has been

under some pressure. do you think they are anticipating that the first quarter could be rough in the public sphere? >> i don't think so. >> as you mentioned, this is more giving credit to where credit is due. i don't think it is that. the other changes are pretty modest on the management side. i don't think this is anything related to the recent cut in terms of iphone expectations. apple goes about their business in terms of years and decades. i think these changes at the management level are more to address that than anything ahead of a major product cycle. >> gene, the stock has really been underperforming. it is down 6% this month. it is pretty much flat for all of 2015 moving farther away from your price target here. why do you think the stock is acting so weak? it is this constant fear, this overhang that apple's iphone

growth is going to slow. >> people are worried they are going to miss the numbers ahead of iphone 7 and the sixth that could potentially come out. it is shocking that investors fall into this cycle and this trap. ultimately, when we get into the point where numbers have actually come down or been cut. i think investors will quickly look at the future and see that it is bright. their core miss is in tack. they have some other major opportunities longer term. so i think that i'm surprised to see this reaction. we see this as a signature buying opportunity ahead of what's going to be better times in the back half of next year. >> gene, can you give us some idea on the talent front, what it is like on the west coast at the moment? if jeff williams is tim cook's tim cook. the backbone of the company. it is conceivable that he might have been head hunted by somebody else. a desire, perhaps, to lock him in, maybe as a succession

argument or not. we hear a lot about programers on the west coast. what about people that actually make things? >> they are in heavy demand. it is an intense market out there. there is obviously this unicorn theme that goes on. the best talent is kind of jumping from one business to the next. this isn't just developers and high-level people too. they are more sought after. at the highest level at apple, they are not working there for the money. they are working there because they want to influence and change the world. i think even though these type of people are approached monthly with attractive offers, i don't think they are likely to get swayed away. the only person that's really left on their own terms has been ron johnson. >> finally, gene, on the stock, we know your target.

are you 179, still there? >> yep, we are still there at 179. we believe that this will play out. what's going to turn the tide here if you see this as a signature buying opportunity. what do you have to prove? >> they show that the numbers are not as bad as these recent cuts. people will realize that they have grown up. when the product lineup gets stronger next year, it is going to take that realization that there is not some epic drop in the numbers. i think a lot of investors are going to wait around for a quarter to make sure that is not going to p hhappen. with a little bit of a waiting game before it calls in. >> gene munster, senior research analyst, bullish on apple. >> ahead on the show, we are going to pick up that tech theme again. mark mahaney is out with his

2016 outlook for tech stocks. why he says it is time perhaps to forget about the fana stocks, the facebook, amazon, netflix, and stocks. glasses?

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welcome back. markets not giving back a good chunk of yesterday's gains. energy dragging down the most here over 1% of the down side as oil continues to fall. trading near $35 a barrel for west texas intermediate crew. energy is the worst performing sector year to date, off by around 20%, more than 20% at this point. weighing on the sector, names like newfield exploration, williams, devon industry and

oil. sarah, no surprise here. energy will be a big focus given today's action. >> let's send it to the cme group. rick santelli has the santelli exchange as always. >> good morning, sarah. good morning, robert heller. thanks for taking the time. >> you were in the transition years. voccer made his exit, greenspan made his entrance before the '87 crash. those were the seeds planted for a much more pro-active fed trying to ring out business cycles and recession. do you think those seeds of the experiment that's turned into a much more macro-sized institution, do you think thats wa the right course to have taken starting way back then, bob? >> oh, absolutely. priority number one for volcker and for greenspan was to fight

inflation. therefore, it really is amazing that these days the federal reserve wants to increase inflation. they should be happy they got it below 2% and leave it there. >> you bring up an interesting points. the comments i have heard thus far on various shows with various guests. maybe the fed off to bring up amazon. people are rioting in the streets, because prices are too low on what they are buying for christmas or under $2 gas, a horrible trancy torre issue we hope will disappear. forgetting the level of prices, do you think prices have been stable? >> no. prices have been increasing. the way we measure prices is not exactly the right way, maybe. a lot of people in the street feel that prices are increasing and groceries are going up. certainly, in san francisco, real estate, rent, everything is

going up. it gets pretty expensive to live. people feel that. the officials are very low. they don't feel it. >> if you were able to tweet the charter for the federal reserve. is that something you would try to tweak? 2% is a very arbitrary level. any thoughts? >> the charter that congress has mandated is price stability. what do they not understand about the word stability? >> stability doesn't mean 2% increases. that means the price level doubles every 35 years or so. so that is a fairly high rate of price increase. the federal reserve's mission, if mandated by congress, is price stability and in my mind, that is as close as zero as you can get. >> let's put that aside.

i completely happen to agree. so now what we are left with is the notion that janet yellen and company are worried that they may overshoot. i'm sorry, i don't see the economy going gang busters. so the overshoot has to refer to the unemployment rate. the unemployment rate really doesn't represent, in my opinion, the true condition of labor and the last minute, tell me about that notion. >> well, labor, unemployment right now, 5%, the fed thinks 4.8% is full employment. so they are getting awfully close to their full employment target as well. they have their foot on the gas pedal for seven years now, flat out. they have taken their foot off the gas pedal a little tad. they are still being very accommodative as janet yellen pointed out. therefore, the chance of an eventu eventual collision is increasing in my view. >> bob heller, it has been a

pleasure. thank you for your opinions, sir. now, we are going to go back to simon hobbs. >> let's take a break. up next on the show, shares of hilton getting a boost on reports that it is spinning off. it has decided finally to spinoff its 150 hotel properties into a reit. how do you play the stock now? more when "squawk on the street" returns. ♪ every auto insurance policy has a number. but not every insurance company understands

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>> it's a real estate investment trust or reet valued at about $10 billion. joining us from jp morgan is joe greff, the number one lodging analyst. joe, welcome back to the program.

>> nice to see you, simon. >> thief been talking to guys like you for a long time. we were discussing in june whether to do this spinoff. is it your perception that they're moving now because there's a window in the legislation going before congress this afternoon that away basically grandfather in the tax break? >> i think the process that legislation took this past week reduces some uncertainty and provides a path of clarity for those companies who presumably have submitted paperwork to the irs to do a reit in a tax-free spinoff way. our view on this for hilton is back then in june as you alluded to that at different points this year and now we think the value not just in its own hotel real estate, but also and probably it's more highly valued management and franchise hotel business. >> yeah. i mean, i guess the overriding argument -- some people thought they missed the boat on this

because the spread between where reits trade and where their own stock trades is not what it used to be. there's not an obvious immediate pop here. what are the -- you were suggesting a 20% up side potentially? >> right. that argument in there not being a valuation arp spread was probably valued a little over a month ago, but what you have seen with hilton of late is it sold off in large part due to the reit spin swrof uncertainty, and i think the stock has overshot it. if you look at where hilton closed last night and let's say the big large cap lodging reit host, there is a value arp spread, but i think where the bigger valuation benefit comes from is the valuation it gets on the management and franchise side. it generates high returns, and if you look at what's implied for the stock price for that business relative to, say, where other fee-based companies are, there's no reason why that valuation shouldn't be at

parody. in total it's between $4 and $5 in value related to this transaction that we think is going to be structured in the way that we've published in previous notes. >> they clearly, looking at all the options and they've been looking at all the options for a long time. well, if you spin it off as an independent reit, what have you got? a lot of the big, big box hotels, basically, all of whom are under contract to hilton. that may not be very attractive visa vi the other reits that are more diverse. there was a suggestion that they, therefore, kind of reverse host hotels. where are you on that? >> i think it comes down to chain scale and geographic diversity. not necessarily brand diversity. we saw actually with host it started out as marriott branded and then over time became diverse. i would not be surprised and i'm not speaking for hilton's ceo or their management team, but i would not be surprised to see over time the hilton-owned reit to become more brand-diversified

as well. >> what about the industry in general? we're looking at a chart here of hilton, down 12% for the year. i mean, it got really ugly coming out of the summer. people were worried that next year is going to be rough. they're not going to be able to increase their revenue for available room. maybe the rack rates are too high come into the new year for corporations. where do you stand on where this industry is in its cycle on whether stocks could fall from here? >> so the question is where we are in the cycle. it's tough to answer that. if you look at where we are right now, this will be about the 65th month of consecutive revenue for available room growth. if you look at the last up cycles the average length has been about 89 months. we're clearly in this second half, second third or last third, rather, of the cycle. what's making investors nervous about the cycle isn't just duration and looking at the present versus the past, but the rate of growth is slowing. when that rate of growth slows, it tends to be not good for the stocks. more so in the asset and less so

for the lodging c-corp. our view and has been for a while we have been far more selective with stocks and what can work at this point in the cycle, and we think c-corp.s with the less asset intended and companies like hilton with action can drive these stocks higher and make it different than a generic cycle play with a cycle associated with slowing top line growth. >> do you have a buy on hilton? >> we do. we have a buy on hilton, and what we also like in addition to hilton is marriott, and we do think the transaction that was last month with starwood will drive value. we do think that will start to get baked into the stock price. probably more in the second quarter of next year. the benefit to the transaction from marriott will get baked into the stock price in the second half of the year, once the deal is close to closing and you can then really put pen to pirp paerp in terms of what the benefits and the sin erj jis will be. those are the two names in lodging that we like, and we would stay away from the more asset intensive lodging reits

right now. >> it's great to see you, joe. joe greff joining us. thank you. >> thank you. want to show you what's happening with the markets. we've taken a leg lower here. the dow is now down 134 points. all the s&p sectors are in the red, leading us lower, though, are energy names and gold names are getting absolutely hammered at the bottom of the s&p right now. as we look at the price of gold getting pummelled. maybe that federal research interest rate hike isn't sitting as well as initially thought. the s&p 500 right now down a full percent. the nasdaq fairing the least worse of the bunch. down .6%. obviously we'll watch the names, but financial and energy getting hit the hardest. let's send it over to john fort to pick up the theme on squawk alley. john. >> hey, sarah. we're going to talk a lot of tech. some shuffle, you know, of responsibilities among apple executives. we'll talk about what you can read into apple's future. also, a lot of good news. a little bad news from pandora in ruling on how they're going

to treat and pay for content. also, rbc is going to give us his outlook for internet stocks in 2016. the hot ones are some names you might not expect. all that and more coming up on "squawk alley."

11:00 here on wall street, and squawk alley is live. ♪ >> ajts woo tang clan to kick off the morning. carl is off today, but how lovely, we have simon hobbs for the hour. >> lovely. lovely to be here. >> also joining us is business insider founder and editor in chief henry. henry great to have you. >> great to be here. >> first up, big