director nick rasmussen and everybody at nctc, all of you, for welcoming us here today. now, nick along with cia director brennan and fbi director comey provided a threat briefing, and director comey and attorney general lynch updated us on the investigation into the san bernardino attacks. i reiterated that the investigation will continue to have this full support of the federal government and that we should leave no stone unturned in determining why and how these terrorists carried out that tragedy. secretary of homeland security johnson updated us on the measures we're taking here at home to increase awareness, stay vigilant, and enhance the safety of the traveling public, especially with so many americans traveling during the holidays. now, after the terrorist attacks in paris and san bernardino, i know that a lot of americans were anxious, and that's understandable. it's natural. what matters most to all of us

are our friends and our families and our communities and their safety. that's true of folks inside of government as well as outside of government, but here is what i want every american to know. since 9/11 we've taken extraordinary steps to strengthen our homeland security. our borders, our ports, our airports, our aviation security, including enhanced watch lists and screening, and we've gotten much better thanks in part to the people in this room of preventing large, complex attacks like 9/11. moreover, and i think everybody here will agree, we have the very best intelligence, counterterrorism, homeland security, and law enforcement professionals in the world. our folks are the best. across our government, these dedicated professionals

including here at ntct are relentless, 24 hours a day, 365 days a year. at the operations center here, people from across our government work literally shoulder to shoulder poring over the latest information, analyzing it, integrating it, connecting the dots. they're sharing information, pushing it out across the federal government and just as importantly to our state and local partners. in other words, what you see here today is one strong, united team. so our professionals have a remarkable record of success. of course, when terrorists pull off a despicable act like what happened in san bernardino, it tears at our hearts, but it also stiffens our resolve to learn whatever lessons we can and to make any improvements that are needed. in the meantime, what the world

doesn't always see are the successes. those terrorist plots that have been prevented, and that's how it should be. this work often times demands secrecy, but as americans we should not forget how good these patriots are. over the years they have taken countless terrorists off the battlefield. they have disrupted plots. they've thwarted attacks. they have saved american lives, and so for everybody who is involved in our counterterrorism efforts, i want to say thank you and the american people thank you. now, i want to repeat what my team just told me. at this moment our intelligence and counterterrorism professionals do not have any specific and credible information about an attack on the homeland. that said, we have to be vigilant. as i indicated in my address to the nation last week, we are in

a new phase of terrorism, including lone actors and small groups of terrorists like those in san bernardino. because they are smaller, often self-initiating, self-motivating, they're harder to detect, and that makes it harder to prevent, but just as the threat evolves, so do we. we're constantly adapting, constantly improving, upping our game, getting better, and today the mission to protect our homeland goes on on three main fronts. first, we're going after terrorists over there where they plot and plan and spew their propaganda. as i described at the pentagon, we're hitting isil harder than ever in syria and iraq. we are taking out their leaders. our partners on the ground are fighting to push isil back and isil has been losing territory. our special operations forces are hard at work.

we took out the isil leader in libya. we've taken out terrorists in yemen and somalia. so we're sending a message. if you target americans, you will have no safe haven. we will find you and we will defend our nation. meanwhile, as always, we're working to protect americans overseas, including our military bases and service members, and secretary john kerry updated us on security at our embassies and our diplomatic posts. second, we continue to do everything in our power to prevent terrorists from getting into the united states. we're doing more with countries around the world, including our european partners, to prevent the flow of foreign terrorist fighters both to places like syria and iraq and back into our countries. we're implementing additional layers of security for visitors who come here under the visa waiver program, and we're working with congress to make further improvements. any refugee coming to the united

states, some of them victims of terrorism themselves, will continue to get the most intensive scrutiny of any arrival. they go through up to two years of vetting, including biometric screening, and the review that i ordered into the fiance visa program under which the female terrorist in san bernardino came here is ongoing. third, we're stepping up our efforts to prevent attacks here at home. as i said, the nctc is constantly sharing information with our state and local partners. across the country more than joint 100 joint terrorism task forces are the action arm of this fight, federal, state, and local experts all working together to disrupt threats. at the state level, fusion cells are receiving tips and pushing information out to local law enforcement. just yesterday the department of homeland security updated its

alert system to make sure americans are getting the most timely and useful information, and with groups like isil trying to radicalize people to violence, especially online, part of our meeting today focused on how we can continue to strengthen our partnership between law enforcement, high tech leaders, communities, faith leaders, and citizens. we've got to keep on building up trust and cooperation that helps communities inoculate themselves from the kind of propaganda that isil is spewing out, preventing their loved ones, especially young people, from succumbing to terrorist ideologies in the first place. and, finally, one of our greatest weapons against terrorism is our own strength and resilience as a people. that means staying vigilant. if you see something suspicious, say something to law enforcement. it also means staying united as one american family remembering

that our greatest allies in this fight are each other. americans of all faiths and all backgrounds, and when americans stand together, nothing can beat us. most of all, we cannot give in to fear or change how we live our lives because that's what terrorists want. that's the only leverage that they have. they can't defeat us on a battlefield, but they can lead us to change in way that is would undermine what this country is all about. and that's what we have to guard against. we have to remind ourselves that when we stay true to our values, nothing can beat us. so anyone trying to harm americans need to know, they need to know that we're strong and that we're resilient, that we will not be terrorized. we've prevailed over much greater threats than this.

we will prevail again. so i want to once again thank all of you at nctc and every one of your home agencies across our entire government for your extraordinary service. i want every american to know, as you go about the holidays, as you travel and gather with family and the kids open their presents and as you ring in the new year, that you've got dedicated patriots working around the clock all across the country to protect us all. often times they're doing so by sacrificing their own holidays and their own time with families, but they care about this deeply and they're the best in the world, and for that we're very grateful. thank you, everybody. happy holidays. [ applause ] >> and there the president with his national security team, including the homeland security chief jeh johnson, also

secretary of state john kerry, the vice president, and others. mr. comey of the fbi out in mclean at the counterterrorism headquarters there talking about what the administration is doing to step up the fight against terror, isil most particularly, but also making reference, john harwood, to steps to enhance the vetting of people, for example, who come in to the united states either as refugees or most particularly, john, under the program for fiances. why don't you pick it up from there and sort of sum up where this statement leaves us. >> well, it leaves us just as we expected. the president making a nod to those heightened fears both in the visa waiver program and in the admission of refugees. he's gotten a lot of political heat on that from republicans, also from some democrats, but his message was one as we expected of let's stay vigilant. let's not overreact though and let's remain one american family

true to our values. >> he has taken some criticism as you point out, john, about perhaps slow responses or ill-chosen phrases with respect to isil most particularly. this feels like the president in recent days beginning a week ago sunday is making a very concerted effort to reassure the country at a time when fears are pretty high. >> you can't discount the value of a president being seen by the american people addressing or being on top of or dealing with what is topmost in their mind and we've seen it since paris and san bernardino, national security and terrorism have jumped to the top of public concerns displacing the economy which we all thought all year was the principal preoccupation of the american people, and so he is being seen with his

national security team. easter earlier in the week and now today highlighting the fact they're on the job 24/7. he saluted them, the members of the team, homeland security in particular, for giving up many ever their own holidays to make americans have safe possibilities for travel over the holiday themselves, and so as we get to this very, very busy travel time, he tried to provide some reassurance and just said don't give in, don't give the terrorist what is they want, which is to paralyze our way of life. >> you know, john, president obama is a cool customer. he is -- you know, in the media term, he's not hot. he is not fiery. he speaks firmly but very understatedly and calmly in contrast to some of the people who are campaigning to take his job. of course, he's not -- >> no question about it. >> but should he have done this, taken this tact quicker, sooner, particularly in the wake of paris and then san bernardino? >> well, certainly that's an

argument that some of his critics have made, not only addressing those issues sooner but also with more of the emotion that you talked about. that's not who this president is. this is a president who is analytical and i think he's not going to try to pretend to be something different than he is, and certainly the republican field is pushing off against that cool customer persona and showing much more emotion, much more sort of visceral response to the fears of the american people and to the extent that the president gets graded in public opinion for his response to terrorism in part on that, he's not doing well, and we've seen his numbers on handling terrorism way under water at this moment, and so when a president has a particular style, you take the good with the bad and on this one he's taking some hits. >> all right. john harwood, thank you very much. appreciate it. mandy? >> let's take a look at what's happening in the market in the meantime while the president has been talking. we've been continuing to watch

stocks come off their lows, but they're still selling off compared to where they were at the gik beginning of the day which was a gain of 46 points for the dow. the dow is now down by 135. the s&p is off by 18. the nasdaq down by 35. and oil continues to slide with crude slipping below $35 a barrel sitting at $34.83. i do believe that on monday we hit the lowest in this cycle which was $34.53. at $34.83 we're just a stone's throw away from that. let's get to dominic chu with more on what is moving the market. it feels like a lot of roads are leading to oil right now, dom. >> they are. the oil trade has been a focus for quite some time. as we talk a little bit about the overall picture for oil and everything else -- let's take a look at what's happening with the dow -- >> dom, i'm going to break in for a second. we've got to take a quick break right here on "power lunch," but we'll be back in a couple minutes' time.

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they're the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then i'll drive it every day of the week. together, we're building a better california. oil is down and so are stocks. as you see right there, the dow industrials off about three-quarters of a percentage point. the s&p 500 down about 1%, and the nasdaq composite off about two-thirds of 1% one day after powerful gains driven by the fed. and one key component that we didn't hit on much yesterday was the overnight reverse repo facility agreement. you wonder why we didn't hit on that.

i don't know. it's complicated stuff, but former dallas fed president richard fisher understand it and he joins us to discuss the strategies the fed has taken to control rates through these operations. let's step back. i'm going to make you professor fisher now. >> great. thank you. i'm a freshman economics student. you have to go slow for me. what are we talking about here, and i gather this reverse repo facility is one of the critical tools the fed will use to adjust interest rates. explain it. >> it is a critical tool, there's a lot of liquidity out there. it's not all in the hands of the depository institutions, so even when i was at the fomc we gradually developed this tool. you know the meetings are designed to instruct the new york desk as to what to do in the interim period. we wanted to have alternative tools. on the one side of the balance sheet, of course, we have excess reserves, and that rate has gone to 50 basis points now. these are the excess reserves of depository institutions. and then on the other side we

have for an operation this reverse repo facility, and what this is designed to do is to basically provide another end of the corridor -- you have two sides, the interest on excess reserves, you have this facility. your viewers should understand this was gradually developed over time, given larger size, exercises took place in the marketplace. what they did yesterday having had a caller of a total of 300 billion they could use for this facility, lifted it to 2 trillion, and really this would be the real test, but in the battlefield on the ground. so i think the desk is ready. time will tell, and what you want to do is use those two different variables, the interest on excess reserves as the ceiling, the interest on overnight -- or excuse me, the overnight repo facility as the floor, and try to get fed funds somewhere in between, and that's sort of where funds had traded

this morning around 35 basis points. >> and how will we know, mr. fisher, whether it's working? >> well, we'll see. you'll know -- seriously, there's about an hour window. they will announce the results at the end of the day, and -- but you've come to a very important point here. it's not just the turn was executed. it's a baby step. the real issue here is with all the new tools that we have, they have, i can't say we anymore, can they use them in an efficient way to accomplish an anchoring of short-term interest rates at the rate they desire? and we will learn this. it's a very good desk. it's well operated. it has a great leader in simon potter. we'll see, and that's -- we'll see is my phrase for a lot of things these days. forward guidance i can summarize

in two words, we'll see. will the desk work? we'll see. >> the economic technical term. >> that's right. >> on a slightly different topic i'd like to pick your brains on something. not that the fed is supposed to be little. in fact, it's supposed to be completely independent from politics. >> absolutely. >> but at the same time going into what is going to be an intense -- >> good point. >> -- presidential election year, to what degree does the fed have to keep that in mind when it thinks about policy and whether it should hike, you know, two more times, three more times, for omore times? >> i think the fed will always want to be, as any good central bank should be, and as this central bank has been throughout history, trying to stay away from the politics. now, the heat of the season of politics will occur, of course, in the fall. one argument would be if they're going to do additional moves, they should do it well before then, say before the august period or so or certainly before the october meeting. it would probably be a little bit earlier. another argument could be that

as they express themselves, if they feel they're going to continue to move forward, they lay that out before the public so that everybody knows so it doesn't look like something that favors one candidate or one side or another, but i've been telling my friends and my clients that the -- it foreshortens the period most likely because you really don't want to be viewed as giving a little push to somebody or holding somebody back. >> right. >> can i ask you -- >> and it's a great question, by the way, because no one -- i haven't heard people discussing this at all since the decision. >> can i ask you, mr. fisher, to just stick around for a second because steve liesman has some breaking news that bears upon the topic of those reverse repos that we were just talking about. steve? >> you could have asked richard just exactly what it was. what we have, tyler, is the first reverse repo operation since the fed raised rates the next day. it just happened at 12:45. they did the auction. and i think the takeaway here is things have gone reasonably orderly. there's been some question, with

$4 trillion sloshing around the system, can the fed set the funds rate? the reverse repo is designed to set the floor of that funds rate at 25 basis points, and what i want to do is read, richard, the results, and he will be able to comment on them. 49 counter parties participating. the total amount is $105 billion. it was towards the upper end of the range that we've had recently. we did $102 billion recently. it's one of the bigger ones but it can be expected and the award was at 25 basis points. richard, what i heard this morning is that the fed funds trade went orderly. it traded at 35 basis points. now we have this reverse repo. towards the upper end of the range of what we've done. how does it seem like the plumbing is working to you and what can you say about the fed's ability to hit that rate at this point? >> steve, i'm actually quite pleased at these results. i had monitored them, and i think that it worked as hoped for, as planned. as you know, the total cap has been expanded to about $2 trillion. your number of $4 trillion, by

the way, of liquidity in the system, i think the number is actually almost twice that, but we'll see, and the important thing is that they have identified the counter parties, they have a menu of counter parties. they are executing well. this first day was a very important thing. i'm quite proud of the new york desk and simon potter for ex su excuting so well. there will probably be more counter parties and we'll have to exercise this muscle to the best of our ability, to the best of their ability. >> richard, let me chime in and say in our cnbc fed survey, we asked our participants where they think the fed funds would trade, and we did get an average of 37 basis points. so just so people understand, the fed is now in a range and it's because of these reserves that are out there, thee excess reserves. they're trying to hit 25 to 50. the new york fed says we're just trying to be in the range but you have to think they would think of success as being at the midpoint and that is the expectation of the market now,

richard. >> so this is the summary of professor liesman and professor fisher. we'll see how the rest of it goes. >> i am honored to be in the same class. >> i couldn't end it on a better note. professor fisher, thank you for making this freshman understand it. >> i thought i was getting protwo professors for the price of one. >> the market is selling off right now. we're down by 118 points. we were down by 190 at the lows of the day. let's get the traders take. no joining us we have kenny polcari and matt cheslock. kenny, on friday you said, look, if you haven't already made your money this year, you know, just forget about it because you're not going to do it between now and the end of the year. the scoreboard is the s&p is flat, the dow is lower, the nasdaq a little bit higher. it's been a bit of a lousy year. >> it has been. i would say between now and the

end of the year, there's nothing that's really going to make anyone's performance really outshine. nobody is making their year in the next six or seven dayings. one way or the other, when you look at what the action today over what happened yesterday, i don't see why anybody should be surprised. you know, the action yesterday felt much more lycike relief sh actually did it, pulled the trigger, raised the rights. but what has changed? not a whole lot. europe continues to struggle. china continues to be weak. oil continues to collapse. all these issues are still out there. they didn't just go poof because she raised rates. it wasn't like everybody stood up and said everything is grate now. in fact, the market had that relief rally and now it's -- >> nothing has really cleared up. i tweeted out after the hike, now she's hiked we can start obsess being when the next one is going to be. so, matt, kenny raised the issue of oil. oil is still low and right now moving even lower. to what degree are we in lock step, how do we get out from the shade of oil?

>> i think right now it's definitely leading, and if we break down below $34 it's going to cause serious repercussions. there were huge bets on the oil market breaking below $40. it did, it did aggressively and now we're threatening to go to $32 which would be long-term support. it's definitely leading us. there's more repercussions than just oil in this country. it's other -- the financial, you know, countries out there that produce a lot of oil, they're going to be deeply affected by lower oil prices and it's more than just opec. >> any way to still make money in this market, kenny? >> no, i think there is. it depends again on who you are. if you're a trader, a day trader, you're doing to take advantage of all the intraday volatility that happens day to day, but there are, i think, as a long-term investor, there are opportunities presenting themselves in sectors away from energy, right? you want to look at technology. you want to look at industrials. you want to look at financials certainly in a rising rate environment but you have to be patient. i think next year it's going to be more about patience than instant gratification.

>> a year of patience. people aren't very good at patience these days. we've all got short attention spans and want instant gratification. thank you for joining us. tyler, over to you. >> thank you. now that the fed has raised interest rates, one of the top fixed income managers in the country says now is the time to buy bonds. robert tip oversees $565 billion in assets at prudential, including the total return bond fund. robert, welcome. good to have you with us. >> thanks. >> glad to have you here. a lot of people don't see the market as opportunistic -- in as opportunistic light as you do. why and what should you buy? >> this is a classic contrarian opportunity i think in the bond market. the fear in the bond market surrounding the fed rate hikes is similar to what we saw back in the taper tantrum. when you get these events, basically the market prices to kind of a worst case scene scare

scenario. we've seen spreads on the longer term slightly lesser liquid sectors whether it be investment grade corporates, structured products widen out. and so these are really the points in the cycle in terms of valuations when you probably are supposed to be a better buyer and holder of fixed income and not a seller. >> what particular areas seem most appealing to you? is it investment grade corporates? is it financials? is it some of the emerging markets? >> yeah. our approach is really to find the best in all of those sectors, and so in our multisector funds, in our global funds, really we are finding the best opportunities whether it's in investment grade corporates where we might focus on the financials, in structured products where we might look at high quality clos or cmbs, in emerging markets where we may look at the middle upper end of hard currency.

>> tell me whether i'm right or wrong here, is your view that now is an opportunistic time to buy bonds grounded in the idea that you think interest rates will not move up much higher or that they are not going to move as high as a lot of other people felt? is that really the basis here? >> the long-term yields, yes. the intermediate and long-term yields, yes. >> that they're not going to move up -- >> that's right, that's right. they already have moved pup. >> they already have. >> if somebody was looking to get out of bonds, want to get out of high yield, they missed their spot a few years ago when it was at 5.5%. now the index is at 9-plus. if they want to get out of treasuries, it would have been the mid-1s, now you're up above 2. the rate hike cycle is more than friesed in priced in the markets. the investors are looking backwards and inwards. when they look backwards they see yields were much higher. when they ignore the rest of the world, they don't see japanese government bonds are at 0.3%.

our yields are high versus the rest of the world and that's a key governor. the fed has historical ly moved too quickly. >> that's what she said she didn't want to do. we have to leave it there. thanks for coming by robert tipp of prudential. >> talking of tips, over to dips. gold taking a big dip today and getting closer to the $1,000 an ounce level. the dollar is also strong today. that's not helping things. and the drop in gold to $1,049 is hurting shares of the big gold miners. gdx and individual stocks down by significant amounts, 7%, 8% or more. let's get to jackie deangelis for what is going on with gold. this is all the fed, right? >> good afternoon to you, mandy.

that's exactly right. there were two schools of thought on this when it came to the dollar, that the strength was already priced in before the rate hike yesterday, but clearly that school didn't have it exactly right because this dollar strength really is pressuring gold prices and that was always the fear when it came to this trade. just trading under $1,050 right now. we haven't seen a settle under $1,000 since september 29th, 2009, so that definitely is something to watch for here. meantime, i want to give you a preview on the oil close because we're trading under $35 a barrel. we're going to close in just under an hour. dollar strength definitely an issue here, and certainly the fundamentals in oil have not changed. as bob pisani has been saying today, oil very critical to this stock market right now. >> thank you very much. the dow is down by triple digits but off the lows and, of course, we'll keep an eye on what's going on with "power" back in two.

fundamentals in oil have not changed. (politely) wait, wait, wait! you can't put it in like that,

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i snapped these photos a short time ago right outside the park entrance. people coming in will see new rules posted. more importantly, they will notice new pop-up metal detectors, the gray poles back there beyond the usual bag check area. there will be more security dogs. the same thing is happening today starting today disney world in orlando. there is no specific threat leading up to these changes but the company is beefing up security given what's been happeni happening. the new rules random metal detector checks. the park will no longer sell nor allow inside toy guns including "star wars" blasters or squirt guns. anyone 14 years or older cannot wear a costume. this is for visual security reasons. a lot of grown-ups like to dress up coming to disneyland. i'm assuming mouse ears are still okay because a lot of people have them on. disney says, we continually review our comprehensive approach to security and are

implementing additional security measures as appropriate. other theme parks like universal studios have also started testing metal detectors. we're told, we want our guests to feel safe. we've long used metal detection for special events such as halloween horror night. this test is a natural progression for us as we study best practices for security in today's world. outside disneyland, i did see a security dog, i saw a uniformed anaheim police officer. people tell me they are noticing it, taking it in stride, hoping it doesn't take too long to get inside because of the new metal detectors but one woman said, i used to hop dwonder if the bag s were enough. now there's more security. >> thank you, jane wells. "star wars," sticking with disney, "the force awakens" hours away from hitting theaters. will it help to move disney stock to the upside or the dark side. let's bring in ivan and bill

smeade. simple question, ivan, is "star wars" going to move the needle for disney's stock and would you buy it? >> absolutely. we own it, we buy it for clients. "star wars" is not a movie, it's a franchise. it's the most powerful, most valuable franchise ever and nobody but disney could maximize the value of this franchise the way they can. >> how about you bill? you own, you like? what do you say? >> it's pretty fairly valued right now, and it kind of comes under charlie munger's theory that you own a great company and you just sit on it for a long time, and we are very confident that over the next five to ten years that we'll do well on disney. we don't have the first clue what might happen in the short run. they're the most successful babysitting organization in the history of the world, and now they're going to babysit gen

xers and the children of gen xers. that's a new brand and a force. it's constantly addition of created brands or purchase of brands and fantastically milking them for profit. >> "the new york times" review this morning was good but measured i would say. how big a number in box office does this movie have to do to move the disney needle in the stock market? >> i think expectations are around 230 to 250. i think it's going to break 300. so usually action/adventure movies are not really, you know, viewed based on reviews, but overall the reviews coming out on disney have been very positive. >> will that move the stock? >> i think absolutely you have not only the power of the box office, but you have the pawer of the merchandise and the merchandise in the history of

lucas films has tended to equal the revenue of the box office. >> that sounds all right. thank you very much, ivan and bill. gentlemen, thank you very much. mandy? >> one of the best movie trailers out there. i'm feeling excited. stocks selling off a day after the fed hikes rates. the dow and the s&p are now down for 2015 but what about next year? could it be just more of the same? say it ain't so. we'll talk about that after the break. you totaled your brand new car. nobody's hurt, but there will still be pain.

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hello, everyone. i'm sue herera, here is your cnbc news update this hour. nancy pelosi says she's not confident democrats have provide enough votes to help pass bills to fund the u.s. government in 2016. she says many democrats have concernins about the spending bl although she will vote in favor of it. the state department says the u.s. and cuba has agreed u.s. airlines can schedule 20 round-trip flights per day to ha hava th havana but it says the two countries have yet to set a date

for the formal signing of the agreement. russian president vladimir putin gave his yearly address. he had no charitable words for the turkish government. and the hollywood reporter says advanced ticket sales for the "star wars" film due to open in the u.s. tomorrow surpassed the $100 million mark. some analysts believe opening weekend sales could top $240 million. "jurassic world" holds the record at $209 million. let's get to the bond report with rick santelli. >> hi, sue. many are saying on our show that the rate cycle is priced in. on this floor the big debate is how many rate increases are in the cycle which means it should be pretty difficult to price in at this point in time. look at a two-day of 5s. i think the maturity to pay attention to. and, yes, it settled at 166, 178 for the high. if you look at a two-day of the

30 you can see it's backing away faster. we want to watch that flattening event, especially in light of those two points i gave. two-day of dollar index, this is the marching orders for the market. the strength in the dollar and, listen, look at the yuan. the dollar versus the yuan since october 26th, it is now working on its tenth day in a row of weaker relationship to the dollar since a month earlier in october. you see the look of that chart. so that may be the second most important issue and if you're watching "power lunch," we will be back in two. here at the td ameritrade trader group, they work all the time.

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welcome back to "power lunch." let's get a check on the gold miners as gold drops by 2.5%, $1,050 an ounce the futures price right now. if you look at the major names like gold corp, barrett gold,

newmont mining, all down 7% or more. even the etf that tracks it, this is the market investigators gold miners gdx is down 5% or 6%. >> taking it on the chin. the dow is currently off its lows but still down by triple digits and both our guests today say don't expect to see double digit returns next year either. ron wiener is ceo of rdm financial group. dave done beadian with atlantic trust. ron, are we looking at more of the same? >> well more of the same you have to be a little careful about what more of the same is. the top largest companies in the s&p 500 so far has returned double digit returns. the other 490 have averaged a loss of over 5%. so it was a big bet year. you had to own some of those netflixs and amazons and apples and microsofts or -- actually not apple, microsoft, facebook, otherwise being prudently diversified did okay and that's

what we think is going to happen next year. didn't do great but it's better than taking it in the shorts like a lot of hedge funds or people who made big bets. it was a dangerous market. the s&p passed above and below zero over 20 times this year. so it looks like it's kind of ho hum, but it was a dangerous place. we think it's going to be a relatively dangerous place and stay diversified next year. you don't know what's going to happen. >> dave, overseas stocks or u.s. stocks and if so, if u.s., what sector do you like best for 2016? >> well, we actually like both large cap high quality stocks in the u.s. and primarily europe and japan as long as we're able to hedge the currency. we're underweight in the emerging markets. in terms of sectors in the u.s., we still think there are attractive areas in the health care space. we also think that financials here will benefit somewhat from higher interest rates as long as those interest rate increases are gradual and on the

underweight side we continue to think that most consumer staples names, you're paying up a lot for relatively mediocre revenue growth. >> very quickly in terms of stocks you like, ron, i see you like some of the big cap techs, but kinder morgan down over 60% this year, cut its dividend, temporarily halted the slide in the stock but is the worst really over? >> we actually think that the energy space is probably going to be the surprise upside, maybe 12, could take 24 months, but kinder morgan the headline read reduces dividend 75%. the strategy is they have $4 billion of free cash flow. it was smarter for them to use their own money to build out their enormous infrastructure. it's a growing company, so it was a smart move, but that's not how the press took it. you know, what they said is, oh, my god, they're cutting their dividend. truth is this company is growing fast. a lot of the mlps are growing fast but you have to pick through them. i think those are going to be the surprise upside next year. >> gentlemen, always good to talk to you.

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welcome back to "power lunch." home builder stocks another casualty of the overall market sell-off today. shares of lennar, also pulte, d.r. horton, all trading down between 1% and 2%. home builders a big group to keep track of here. more on "power lunch" after the break so stay right here. we'll be back in just a couple minutes' time. ♪ every insurance policy has a number. but not every insurance company understands the life behind it. for those who've served and the families who've supported them, we offer our best service in return. ♪

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welcome back to "power lunch," everybody. i'm tyler mathisen. we're in a rate hike environment and at some point that could filter to savers. but there's now a new service to help you capitalize. it's called max my interest. founder and ceo gary zimmerman joins me right now. serve worried about making more money or their savings and banks traditionally have been very slow to move those deposit rates up, but what you have is a program, max my interest, that does what? uses an algorithm to do what? >> so max my interest is a technology-driven tool that helps individual investors and their financial advisers more effectively manage the cash portion of their portfolios. so today using technology without switching banks our clients are earning about 1% yield on their fully liquid cash

in the bank and obtaining more fdic coverage up to $5 million per couple. >> does it sweep around a number of online banks and searches for the highest yield and moves my cash into where i can get the best money? >> our software oversees a portfolio of your own bank accounts. you tell our software how much money you want to keep in the existing checking account and the excess funds move to a portfolio of your own banking accounts. >> federally insured? >> all fdic insured. >> how often do you move the monies to seek that highest yield? >> we monitor interest rates on a daily basis and once per month or computers take a snapshot of our balances and compare how your cash is allocated an where it sees a difference it instructs your banks to send them between your accounts. >> do your fees cancel that out? >> our fee is two basis points per quarter. it works out to eight basis

points a year relative to 100 basis points of yield which is what our clients are earning today. >> so on net, i am likely to make -- let's say i get one-tenth of 1% on my savings right now. i might get 1% on my savings if i took advantage of your program. you take 8/100s of 1% a year on that. so i will make 9/10 of a percent on my money and i might make depending the amount i have $10,000 more a year or $500 more. >> it's really found money and it's safer often than where you are traditionally holding money because of the way it parcels out your funds into $250,000 increments. >> every time the fed hikes, do online banks generally raise the deposit rate, give you more than the traditional brick and mortar banks? >> sure. the incremental interest being earned here is really because of the efficiencies of interacting

online. it's the same reason why a toy might cost less at amazon versus toys "r" us. it's the same dynamic. >> do they tend to ratchet rates up quicker? >> yes. since we started this two years ago the incremental yield has only widened and we think it will. >> gary zimmerman, max my interest. thank you very much. >> hunting for yield for puce. >> we just maxed the first hour of "power lunch." >> absolutely. >> another wild day for stocks. let's bring in brian and melissa. >> thank you very much. now 2:00 on wall street, 1:00 p.m. in williston, north dakota. the dow is down again as oil falls again and it really is all about oil, my friends. i'm brian sullivan. melissa lee is at the nasdaq just for you. we begin with stocks and oil. yes, low oil means more money in your pocket from gas savings. we get that. but low oil is also what has largely been dragging down the

value of your investments. do you need proof? we've been talking about this for a year. if you do, here you go. exhibit a, that is a chart of oil and the dow. the bottom line, if you care about where your investments and your retirement funds are going at least in this variety, you must follow the price of oil. if you're listening on the radio, trust me it's a shot of the dow and crude oil and they are tracking just together. so here is the question. where is the price of oil going from here? now, most analysts did not see the oil collapse coming. most. but not all. your next guest did see it coming, and he warned his clients earlier this year. rob mcnally, the founder and president of the rapidian group. this is his first time on "power lunch." welcome, bob. >> honored to be here, brian. >> that's a strong word. i'll be nice now. what did you see that made you so convinced months ago that the price of oil was going down, not

staying flat or even going up? >> well, brian, it was when the surplus developed in the global oil market in september of last year. we knew before hand that saudi arabia had given up playing the swing supplier role, but that was irrelevant because the market was tight and firm. until the end of the summer in 2014. when that surplus developed, we knew oil prices were going down and going down hard because saudi arabia was not kidding around about not playing that swing producer role. the second thing we've learned this year is that shale oil is not going to replace saudi arabia as a swing producer. so you tie those two things together, and what you have is an oil market for the first time since the early 1930s that is not being governed by a supply manager, and what we're going to learn is that type of oil market is subject to boom and bust oil price cycles of which we're not familiar. >> you also have an oil market, bob, as you well know, that is oversupplied by probably 2 million to 3 million barrels

every single day worldwide. is there any sign of that balance coming back in? >> not at all. the protections that we have in other official agencies show next year it should start to abate. it's like the old led zeppelin song, if it keeps on ranging, the levee is going to break. it's going to keep on raining next year but the rain should slow down. we're oversupplied around 2 million barrels a day this year. next year it will probably slow down to a half a million barrels a day, a little more. that's it gdp growth is healthy. if gdp growth disappoints, we will be even more oversupplied. so the rain is going to slow, the oversupply is going to slow, but it's not going to stop. even through next year even if you look at d.o.e. and iea balances, not just ours. >> you quoted led z ed led zepp. i'll quote led zeppelin one. your time is going to come.

when is the time going to come for oil. >> i'll say 2018, 2019, 2020. it will take a while to work off the high inventorienventories. if we get good demand in 2018, 2019, we'll need oil we're killing right now. projects in ultra deep water, arctic, russian, canadian projects that will not come back quickly. all we'll be running the world on then is whatever saudi arabia has in spare and then whatever shale oil can do on the bounceback. in our view of the world, the world growing at close to 4% needs about 2 million barrels a day of demand. you're only going to get about half of that and so we'll be back into the boom phase i would say by 2018. >> 2018? >> i'm afraid so. >> is it possible then that the price of oil could remain below 50 bucks a barrel throughout next year? because almost everybody is saying, well, don't worry, next year we'll be back to 60, 70 bucks. >> they've been saying that a lot. optimism dies hard. we have brent averaging $38 next year and on a weekly or daily

basis, that means certainly prices in the 20s if not lower, and, again, if gdp growth disappoints, even $38 is too high for next year. it will go lower. we're going to learn why the only thing worse than opec managing the oil market is opec not managing the oil market. >> fair to say the oil market has been dazed and confused as well. bob mcnally, sorry about that. it was a real pleasure about that. >> thanks so much, brian. thank you. >> not what the oil market wanted to hear. breaking news following the arrest of turing ceo. let's get to meg ter rrell with more. >> we do expect that martin shkreli is inside being arraigned right now or any minute now. our producer is inside and she will be bringing us any headlines which we will bring to you. we expect to understand he's going to hear the charges against him. we expect to learn what he pleads and any terms of his bail. as for what we know right now,

the department of justice this morning laying out the criminal charges against shkreli. it's a seven-count indictment. he is charged with defrauding hedge fund investors in his investment fund msnb capital and msnb health care. charged with misappropriating $11 million from his biotech company retrophin. the department of justice saying he was using retrophin as his personal piggy bank saying he faces a maximum sentence of 20 years imprisonment and the investigation is ongoing. now, these charges were announced by u.s. attorney robert capers here in brooklyn in a 12:00 p.m. press briefing using some pretty colorful language. >> these charges in today's indictment highlight the brazenness and the breadth of the screams and the outrage us web of lies and deceit. >> the fbi assistant director in charge diego rodriguez also

speaking at the press conference saying the charges today are but one example of what's left to come as the fbi continues this investigation. so we'll continue to bring you any updates from here in brooklyn, brian. back over to you. >> thank you so much, meg. solar stocks continuing to add to yesterday's gains after congress reached a spending deal that could extend a key tax credit for renewable energy companies that passed. solar city up more than 6%. up more than 50% this week alone. collin rush covers solar stocks at oppenheimer. it's been a great week for solar in general and in particular solar city. so i want to start off with the investment tax credit possible extension. that would provide clirity through 2021 with what happens to the itc. i'm wondering how much this changes solar city's story given the last earnings call. they really got punished for saying that they're going to switch from growth mode to cost savings mode in light of the step down of itc. >> yeah. so what we have going forward now is two benefits. one is clarity in the markets.

it allows them to invest more aggressively into growth but also you have a better pricing environment for them as we go forward. you know, functionally we think this improves the margin on their investments by 60% to 80% so the cash flow all each dollar they spend is dramatically better and we're expecting them to spend that money over the next five years. >> they had a recent analyst say just this week, do they comment on this and are you adjusting estimates given the clarity that you now have or you may now have through 2021? >> it's important to remember that this is washington so the bill hasn't passed yet. we're expecting a vote tomorrow and anticipating that. certainly we've run any number of scenarios and don't want to front run our estimates but like i said we do think this is a meaningful improvement to the business environment and the investment environment plus the return on invested capital. i'll also add what we're seeing from the debt markets, and we really do think solar is a structured finance play, over time is that we're seeing, you know, significant firmness in both the convert and high yield markets in the solar names right now in a tough tape.

and we do think that debt is really driving the ultimate return on capital and cost to capital for solar which we ultimately feel is the biggest lever in the supply chain. >> i assuming this thing passes, collin, which stocks, which sorts of solar stocks benefit the most? is it the solar cities of the world? is it the yieldcos, for instance? >> it is all of the above. the environment for solar we think is very compelling here as is. we think economics for solar even without the tax credit are at parity or better in terms of delivered electricity prices, and so we think everyone that has a stable platform with a strong sales team and access to financing will benefit over the next five years. >> there's also a decision. kr state regulators rejecting a push from utilities to raise the rates charged to new solar customers. this does benefit those with residential activity in california such as a solar city, maybe a sun run?

>> you will see anyone that's paying delivered electricity prices whether it's a commercial customer or a residential customer benefit. so the two names there in our coverage universe that have the most exposure are sun edison and solar city. >> collin, going to leave it there. thank you. collin rush, managing director at oppenheimer. jim chanos can't be too happy with his short position on solar city. right now the stock is up 56% this week. c chanos will join kelly evans on "the closing bell." brian? >> in the meantime, much more still ahead right here on "power lunch." including where investment giant pimco sees the biggest and best opportunities for your money in the new year. and we are all over this thursday slide. yes, we are off the lows, but the dow is still down 0.7%. the s&p, nasdaq, gold, and oil are all down. we'll bring you more of it when "power lunch" returns right

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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 ♪ welcome back to "power lunch." i'm melissa lee. apple naming jeff williams as its new chief operating officer. williams most recently served as apple's vice president of operations. apple has been without a coo since tim cook took over as ceo. shares of general mills are taking a hit after the company reported weaker than expected earnings. the food producer saw revenues drop in all retail categories. that stock down 2.6%. take a look at some stocks hitting all-time highs in today's session.

becton dickinson, raytheon, mcdonald's, and adobe although adobe has pulled back slightly from the new highs. shares of amc up more than 10% this week after the theater operator named a new president and ceo. kelly evans lashd landed a big interview with that ceo so we welcome here in "power lunch." kelly evans. >> thank you very much. i'm here at the waldorf for the yale ceo conference. first though i'm kicking things off with you guys and adam aaron from amc entertainment who is joining me in the wake of one of the biggest movie stories of the year. tell us a little bit about "star wars." how many different screens are you guys shows it on, how big a movie do you think this is going to be? >> kelly, it's nice to be with you. for two more weeks i'm in the hotel business as ceo of starwood hotels and resorts. on january 4th i go into the seat of ceo of amc entertainment. what a time to join amc. i'm going to the screening in manhattan of "star wars" tonight.

it's going to be a huge weekend for "star wars" this year. our advance ticket sales at amc for "star wars" are the biggest by far of any film that we have ever known. >> so you guys have 5200 screens how many are showing "star wars"? >> about 1500 or so. but we're going to have 40 theaters that are showing it 24 hours a day. >> wow. >> it's on a thousand more screens than the most recent big opening that we've had. now, here is the good news. as much as advanced ticket sales with been blowing through the roof, we still have 3 million seats for sale for "star wars" on opening weekend, so there's a lot of opportunity for moviegoers to see "star wars." >> there's also a lot at stake for this release, putting the box office for 2015 in the black after a string of recent dispoints and people are saying at 2016 it's going to be hard to increase ticket sales beyond what we're seeing this year. how are you going to do that at amc? >> "star wars" is going to be very important to our fourth quarter, of course, because it

looks like the draw for "star wars" is going to be just enormous. we're a little more confident about the 2016 box office than others. we have a few other things going for us. we just closed in an acquisition yesterday that increases our screen count by about 6%. >> and includes some of the fancier types of theaters. >> it does. that's the hallmark of amc, plush recliner chairs, full alcoholic bars in the lobbies, but i also think we'll be doing some things on the marketing side that will significantly increase market share. should be a good year. >> going back to "star wars," how much of a money maker is it for you guys. are you undercutting to draw people in? is it premium pricing? and how much of that is fandango getting? >> we're charging market level prices. we do have premium experiences. we have the most imax screens of any movie theater exhibitor in the united states. "star wars" is going to be very popular in i max, very popular

on premium 3-d. so, you know, the sky is sort of the limit but we're all going to be waiting with great interest to see what moviegoers think. the early reviews are really strong. >> real quick, when it comes to next year, you know, we're talking about netflix, talking about companies that are now showing movies themselves. are you worried? >> not at all. you know, i'm joining amc knowing all this is going on. >> yeah. >> clearly technology over the next several years is going to allow moviegoers to see movies a lot of different ways. we think there's a lot of opportunity to make the movie going experience at our theater spectacular and also to participate in techno logic change so that our share of moving going revenues continues. >> you officially begin on january 4th. good luck. thank you for joining us. >> you bet. >> very much appreciate it. adam aaron, the incoming ceo of amc entertainment. >> thank you. shares of amc, competitor carmike is under pressure. stack is down more than 5% since

october. tonight on "fast money" i'll be talking to the ceo of carmike. we'll be asking him about "star wars" but also about potential increased security in light of disney increasing security at its theme parks. that's tonight at 5:00 eastern time on "fast money." brian? >> all right. thank you very much, melissa. got some breaking news regarding vw. volkswagen has officially named ken feinberg of the bp mccondo spill to design the resolution of the vw deseal scandal. they have officially named ken feinberg as the bp oil claims claims adjudicator to work with vw. i believe we have phil lebeau on the telephone. it appears to now be official. >> there were a number of attorneys who were pushing for this to happen. what's interesting about this is that i think people when they think about ken feinberg going

back to the 9/11 claims, they sit there and they think, well, he usually deals with loss of life. well, that's not entirely what he deals with in terms of special cases and special situations. look at what happened with the gulf bp oil spill as a good example of that. in this case he's going to be looking at those claims not only from dw owners but also from dealers likely who are going to say, hey, look, we were damaged materially in terms of what happened to us financially because of ownership of these vehicles and because of what was told to us by volkswagen when we bought these vehicles. remember, dealers buy from the company, so they are customers in a sense. so ken feinberg will be handling these claims. it will be interesting to see what he sets up in terms of a process for hearing those claims other the next weeks and months. >> you know, and i mentioned ken feinberg probably best known for bp but he was also the gm ignition switch administrator, correct? >> yep. >> he has some experience in the

automobile industry. >> right. >> do we have idea what's expected? what are vw owners looking for? do they want to get the full value -- if i bought a passat diesel for $45,000, maybe now it's worth $20,000, i want the 45. >> we haven't had a chance to talk to ken feinberg but let me give you a scenario here. let's say you are a dealer and you have been buying vw diesel vehicles for a number of years. well, now you have got customers who are coming back saying, hey, this is fraud, you're responsible, and you've got inventory in the back of your showroom that you can't sell because there's a stop sale order on those vehicles. i mean, you're talking about potentially millions, tens of millions of dollars of impact for a dealer. now, that's just one dealer and we don't know exactly what ken feinberg will be listening to. you also have customers who will say, hey, i bought this vehicle, and now i can't sell it. so now they owe me another $5,000 or whatever the amount might be. we're just talking hypothetically here. so there is a lot of issues here

for those people who are, a, stuck with these vehicles, and the deal whose can't sell some of the vehicles. >> phil, could this be seen as a move to limit future liabilities vw could face through lawsuits? >> yes. without a doubt. same thing happened with general motors. they put some certainty by saying this is how much money we plan to pay out. they said $400 million. ultimately it was $600 million. once it happened there was a change in terms of how investors looked at shares of general motors in terms of future liability and future loss potential. >> and you're -- it's interesting, too, if you're a vw owner, i mean, you're really in an official way your only real damage is the loss of the value of your car although i'm sure there will be many people who claim, well, i did emotional harnl because i was damaging the environment. i thought i was doing good. i was actually polluting a lot

more than i believe and that's sort of an emotional toll. so it's going to be interesting to see the balance of -- because you actually have a fixed value of a car. if you paid $50,000 for the car, it's worth $25,000, you've lost $25,000. it's going to be an interesting case to watch. >> brian, i have heard from used car deal whose have said, look, i'm not even a licensed vw or brand vw dealer. i'm a used car dealer and now i'm stuck with some of these. i can't sell them. what do i do? they've got an interesting claim as well. >> they certainly do. phil lebeau, thank you very much. the breaking news, ken feinberg appointed by vw to dole out those claims. still to come on "power lunch," a bold sell call on the steel stocks. we'll speak with that analyst ahead. let's look at some of the big winners, yes, there are a few winners in the s&p right now. micron, we'll talk about that move in a second, fed ex, valero, and frontier communications they're up the most as most stocks are down. we are back right after this.

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only one sector in the green today and that would be utilities up by just about a half a percent. let's bring in "fast money" trader tim seymour. tim, it's interesting because if you take a look at the topline numbers, it doesn't look that exciting but then you look at sectors like the financials which have been seen as a big beneficiary, and we are down below prefed levels from yesterday. basically given up a lot of gains there. waef flatter yield curve in today's session today. >> i think people are looking at the fed's hike and saying it wasn't as dovish as a hike. you look at the dot plots on the fed, so where the fed themselves think fed funds should be out in 2016 at the end versus fed funds. we're -- the market is probably not pricing in what the fed is, who is right, who is wrong. obviously dot plots have come in to meet fed funds. today people are saying the fed may not have been as dovish in that hike and then they look at the economy and they say, we're late cycle. janet yellen kind of tried to diffuse the fact economies don't

die of old age. you're out of place where people are looking at less liquidity, at least the rate of growth of central bank liquidity in markets is now that much less today. >> one day doesn't make a trend but does it make you think about the rally we saw yesterday and become more cautious as we enter the final trading days of the year? >> it doesn't change anything on a day over day basis. in fact, i still think there's a lot of cash on the sidelines. i think you could see if anything the risk is to a squeeze up. into the first quarter of next year, people will be looking at the buybacks, the earnings growth they see challenged and they see liquidity challenged. that's the dynamic people are looking at. in the short term, i don't think you trade that move. >> tim, thank you. we'll see you tonight on "fast money" at 5:00 eastern. brian, over to you. >> and thank you. up next, "street talk" where our under the radar stock call of the day only wants you to come in and play some games. the answer to that clue ahead. but first, how low will oil close today? we are down again just above $35 a barrel. we'll show you that and find out how hard hit some big oil

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hello, everyone. i'm sue herera. here is your cnbc news update. president obama says u.s.

intelligence and counterterrorism officials don't have any specific credible information suggesting a potential terror attack against the u.s. during the holidays. he made the comment during a visit to the national counterterrorism center in virginia and that was where he received his briefing. a rochester man has pleaded guilty to attempting to support a foreign terrorist group. he was brought into federal court this morning under heavy security. he is a u.s. citizen born in yemen. democratic presidential candidate bernie sanders picking up the endorsement of the communication workers of america. that group represents about 700,000 workers nationally. the endorsement was announced at its union headquarters in washington. and two auto sales forecasting companies say americans will buy more cars and trucks in december than any other month in more than a decade. lmc auto mmotive and to do powe predicting sales will hit 7.1 million. that's the highest number since

july of 2005. that's the news update this hour. brian, back to you. might be all that attractive financing bringing people in. >> nine-year loans will do that, sue herera. >> i think you're right. >> let's go to ten. do i hear ten? thank you very much. it might be ten-year loans actually. oil getting ready to close. let's go to jackie deangelis who moved a couple blocks uptown to the nyse for the nymex today. >> good afternoon to you. oil did just close, $34.95. under that key $35 level. this is fairly significant. what happened today? well, part of this was the fed rate hike, the impact it had on the dollar certainly bearish when it comes to crude oil prices and all commodities in fact. the fed doesn't really have a hold on what happens with oil except with that dollar correlation. as we have discussed many, many times, so far fed or no fed, the fundamentals haven't changed. so right now the sentiment is to the downside. some people are a little afraid to get on the short side of this trade right now because we have come so far so fast, but it is

likely we do head a little lower from here before we start to stabilize. and brian, i saw some video of some very stellar dance moves at the christmas party last night of you. >> if by stellar you mean like that air dude that goes outside of car dealerships that does this, then, yes. moving on. thank you. >> pretty much. >> i'm going to get you for that, deangelis. as oil falls again, many oil stocks are falling again, some in big ways. look at these movers. you have marathon oil down again 7.5%. conocophillips down 4%. hess come back a little off the lows, still down 3%. midcaps getting hit harder. these are just the most down on my screens. more than 100 oil-related names are down again today. whiting petroleum. these are one-day moves. this is not a week. whiting down 8.5%. gep resources over 6%. continental resources down another lie 8%. huge moves in the bond market

around those companies as well. as oil falls and the fed funds rate goes up, pretty fair to say we're in a different investing environment than a few weeks ago. what is pimco advising its clients to do differently? let's bring in pimco's scott -- the last time we talked oil was 10 bucks a barrel higher. we were still zero bound. those things have changed. how have you changed your investing strategy? >> hi, brian. yeah, many things are changing especially in the year ahead. we just published our 2016 pimco outlook up on the website this morning at pimco.com, and the theme that we're emphasizing and we think will continue to play out and reward investors throughout next year is to focus on the monetary policy divergence and the implications of that. we have central banks actually moving in the opposite direction which is a fairly unusual event and configuration for the developed world. we think the federal reserve will continue to move pretty much as they're suggesting they will. the market has not quite adopted that yet in terms of pricing but

we think the fed will deliver on three or four rate hikes and move policy rates back to 2% over the next couple years. meanwhile we have other central banks, in fact, most other intarnti central banks in the world headed in the opposite direction. there are many investment themes that follow on from that. the other interesting thing to note is we're calling for economic convergence. while central banks are heading in different directions, they're doing so for good reasons, and one of the by-products of that and, of course, the design of the policy is to get growth rates to converge closer to potential around the world. so we do think that growth will be higher for most of the world than it's been in this past trailing 12 months, and whale the u.s. growth might be around 2.25%, you're going to have a developed world growth in much of the rest of the developed world moving back closer to u.s. growth levels being above potential and we probably have seen the woremerging markest in

markets. >> i'm probably going to steal a word from comedian stephen colbert. so who looks growthiest to you. >> growthiest. well, in terms of growth above potential, it continues to be the case -- it's the developed world that's really leading the charge here which is a big hand-off from much of the last decade when it's been the emerging market world that's been driving growth around the world. but for instance, we forecast the u.s. 2.25%, that's above u.s. growth potential, but europe growing at 1.5%. japan growing at 1%. the uk at 2.25%. all of those levels are above levels of potential growth, meaning they're really delivering on relatively strong performance in the year ahead. >> who looks the least growthiest if you had to pick out, scott a place -- we always talk about what do i invest in? how about what not to invest in? what's the ugliest thing out there. where would you avoid with your

worst enemy's money? >> there's the right price for even bad growth stories and there's a right price for even bad companies and bad sectors. we think it's going to continue to be a very challenging year for many emerging market countries, so they are slow growers in general delivering well below potential in most cases. still struggling with an environment where they've had to, you know, in major ways change how their economies work. those who are commodity exporters certainly are still wrestling with changes and that's likely to continue to be the case as we move through next year. there's more turmoil to come in that cat gouegory and yet there another class if they're not dealing with that problem they're dealing with dollar strength and the challenges that creates. so there are some values there. just one has to be very careful in that sector as they do with every other sector even in the developed markets that can be impacted by this big change in commodity prices. that's still going to be a source of volatility next year but we do think that there will be some good opportunities for

investors. >> are you buying distressed oil company or gas or energy company bonds? >> well, we're beginning to sift through the sector. we've made some purchases. i would describe it as an environment where generically we're not advising that people go in at this point. it still seems many different sectors are not surprised for the turmoil we see ahead. it's our own forecast that oil prices do generally head up next year, but closer to $60 perhaps by the end of the year but that's not enough to validate many different business models that are out there. so there's going to have to be a wave of restructuring. we think there will be better valuations ahead. it's not a time to rush in. it's a time to start picking up overshoots and that's what we're doing. >> okay. i know the bond market, many times i have looked at are down 10% or more this week. i'm talking about oil company bonds, not stocks. scott mather, thank you. i do want -- before you go, way tonight give a special shut out to your colleague mark porterfield. i have been working with him personally over at pimco. he's been good to cnbc, good to

me personally. he's retiring today so a long illustrious career with pimco and with us so i want to say have a great retirement, man. >> he is. thank you. we'll appreciate it. i'm heading to his retirement lunch now. >> send some cocktails this way, across country. scott, thank you very much. it's time for "trading nation." let us talk steel stocks. shares of u.s. steel, ak steel, and cliffs natural all plunging partly because deutsche bank downgraded the stocks to a sell based on lower expectations of lower steel prices. joining us by phone is the analyst who made that call, jorge beristain. what is behind the downgrade, only pricing? >> i think following up on what your prior speaker said, there's an emerging market slowdown under way and basically the steel and ironore sector in the u.s. is on the receiving end of that. >> what is the primary cause of that? simply just no demand, wicked oversupply, or maybe something more fundamental or less

fundamental going on? >> well, we think it's a combination of both. frankly, the mining sector in hindsight has massively overshoot in terms of their expected delivery for iron ore into china. it's leading iron ore prices globally to plunge but china has turned into a big exporter of steel which was unexpected u-turn. and that flood of product is looking for a home globally driving down world prices for those commodities. >> you know, we tend to say, you know, steel and energy, jorge, as if they're one big sector, but the reality is there's different kinds of steel for different uses, different input costs, different costs when you sell it. if you look inside the steel world, is there one kind of steel or steel companies that while they may all be suffering are better positioned for any kind of a rebound? >> certainly. on a relative call basis at this point we're basically

disintegrating our calls on companies which are integrated into the upstream, where you have a high fixed costs, companies like u.s. steel, ak steel who run blast furnaces or the same for aluminum companies with a lot of upstream integration, we're trying to unhitch our horse to that wagon and move down stream to companies that are defensive in a sense, companies like new corp, steel dynamics and they're able to better manage their output. i think that's the key idea su do not want to be competing head on with china on price. if you have a flexible cost structure company, that's what we'd be looking to position ourts ourselves in. >> jorge, we appreciate you joining us. thank you very much. a buy on steel dynamics and new core. let's bring in rich ross of ever core isi. you're looking at the xlb. off couple of these names inside

this etf, rich ross. a little bit of a down trend recently, including today. what's the macro trend. >> i am with jorge, clearly steel is not to be touched at these levels but let's look at the materials more broadly where i think there's still time to save yourself. when you look at the benchmark etf, the xlt, in a clear down trend most of the year. year still down 10%. you see the rally along with the broader market but importantly that rally fails into key resistance at the 150-day late november, early december. that's your first clue that something is wrong. the down tread has resumed in earnest. we see a great set up to be a seller here. look how we've broken that long-term trend. big distribution. it tells me the big trend is down. what we like is the throwback rally into the 150-week moving average. that's giving you one last chance to save yourself, brian,

and make some sales here ahead of some serious pain in the material sector. don't buy steel. sell them if you got them and sell materials more broadly. >> all right. sell it, sell it if you got them. couldn't be more clear. rich ross, thank you very much. tough times for steel. for more "trading nation," head to our website, tradingnation.cnbc.com. coming up, more on markets, more on oil, maybe some stock calls. who knows. it's a grab bag. we're back right after this. >> and now the latest from tradingnation.cnbc.com and a word from our sponsor.

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tradingnation.cnbc.com. all right. every day wall street recommends all kinds of stocks. every day melissa and i dig out the calls we think are interesting or maybe you just need to hear about. it's called "street talk." stock one, pbf emergency, an interesting note.

pbf should have the biggest beneficiary from one of the new appropriations and spending bill in congress because part of it allows for independent refiners to take an extra cost deduction and tph says that could add 5% to thee ps next year. that has the stock up 30%. >> quick note, a lot of refiners doing really well because we had the widening between wti and brent. next up eli lilly credit suisse rejiggering -- i made up that word. >> i like it. >> u.s. and global focus list, adding eli lilly, removing bristol-myers. we should point out lilly is trading at a cheaper pe. only three "street talk"s today. dave & buster's, it's a restaurant chain known for video games, ski ball, tv. bmo capital markets starting

coverage with an outperform. 20% upside. they say the company should not only exceed expectations next year but also generate good longer term growth over the next several years. >> all right. that does it for "street talk" for today. coming up next, millions of shoppers will use their credit cards at the register or online shopping this weekend. but is your holiday shopping opening your data up to hackers? we will bring you the story and what you can do to protect yourself. "power lunch" back in two. you totaled your brand new car. nobody's hurt, but there will still be pain. it comes when your insurance company says they'll only pay

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we are just a little over a week until christmas, how do you keep your data safe, how do you keep your kids' data safe. andrew, great to have you with us. i want to first start off with kids, this is the most disturbing. in light of the v-tech breach a lot of parents are concerned, there was an article in the journal highlighting a hot kids toy, hello barbie, you say that that mobile app attached to this toy actually might have some security flaws. >> that's right. basically with a lot of these connected devices that are sharing personal information from children, parents and kids in general is that this information is beings is that ird to a cloud service internet structure back end.

these infrastructures are not that secure as is the kate with the v-tech scandal where we have seen lots of personal information has been leaked and shared and gotten by hackers. >> the point to be made about the v-tech breach is that it doesn't seem like anything was done with the data, per se. it seems like this might be an unprotected area, you know, in terms of cyber security land, children's data. so could this data eventually be sort of held for ran some? >> what's the worst skas scenario? >> depending on what the data contains, we know it contains birthdays, addresses, chat conversations, images. as the data is out and depending who has access to it they can build profiles and potentially ways of attacking them as they are now or as they grow older and track them through that. it's very important that as parents that are using these devices and let's their children use these devices is that they are being careful and proactive about the types of information they send to please servers, st not that surprising that another leak has happened because these

servers that are storing information are no less secure than the ones we find typically that are storing our financial data. we continuously see more and more trends of skred information being stolen. if that's some of our really secure information we are now seeing other personal information being stole nl as well. >> of course, adults shouldn't be too lacks when it comes to their own cyber security. what is the number one mistake in your view that adults make when they are using their credit card, for instance, for shopping? what's the one thing that people can do to protect themselves? >> one of the best things they can do to protect themselves is not to save that credit card information on the servers. while it is a nice convenience for us to be able to save hour recall that information, it is saved somewhere that's out of your control so that when that server does have a vulnerability in it that information gets leaked and tolden. it's really important that you do exercise best caution and practices in terms of how and where you share your information. >> all right. andrew, thanks so much for joining us, great tips there, andrew blaich.

take a look at shares of pandora, the single p, up 15% -- well, 13% right now, they were up 15%. it's a lot. this after a ruling by the u.s. copyright royalty board raised the amount of online radio service would have to pay, wait a minute, they raised their cost but the stock is soaring? we'll tell you why coming up. when a moment spontaneously turns romantic, why pause to take a pill?

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costs are going to go up. federal judges ruling that for the next five years the music streamers including pandora will now pay 17 cents for every 100 songs played, it was 14. so it is more expensive for pandora but the stock is up 13%. richard actual upgrading pandora. we talked a couple days about the massive amount of open actions activity on pandora, but we're looking at a company that is going to be paying more but the stock is up. please put those things together for us. >> okay. so two things are at play. we had expected the crb to come with a rate of 20 cents per 100 so 17 cents per 100 spins is significantly less. second and actually really more important is the annual escalation is going from 8% a year, the current status quo, to 2% a year, which will allow pandora to be able to grow top

line at a more moderate place while also generating ebitda and earnings. >> so it's higher, but it's not as high as some people had expected. i guess my question, then, is do you think they are going to be able to raise prices to be able to compensate for that extra input cost or do you think they can still maintain rul tifl similar margins. >> the margins will be at a steady state with the current level of usage around 40% by our model. okay. so where pandora has to generate additional revenue growth to really benefit from the stable content costs. so where are they going to generate that? they just bought tickets, so they'll sell tickets, they just brought the streaming assets of rdl so they will get into international streaming. all right. so the record labels really would love an additional entrance into the marketplace outside of spotify and apple and

we think pandora will get nation status for at least a year or two following this because the record labels really want to expand internationally and expand to pandora. >> quickly, itunes music, every day, every time i go to itunes they bug me to sign up for t i haven't yet. do you think that is a real threat to pandora? >> you know, we haven't liked the itunes platform, it's too complicated, you know, and just kind of you get sucked into a proprietary system. whereas pandora, you know, it doesn't really matter if you are an android user or rim user or windows user, you can use pandora. >> okay. >> no, that's their competitive advantage in the marketplace. >> all right, rich tullo upgrading pandora, the stock is up more than 13% right now, we do appreciate that. thank you very much. >> all right. so there you go, big day for pandora, something maybe you will talk about on "fast money"

tonight. >> we are keeping an eye on the markets as we head into the last hour of trade, we are close to the session lows on the s&p. >> it's range so my commute will be slow to please keep my entertained on "fast money." >> i'll try. "closing bell" starts right now. hi, everybody, an welcome to the "closing bell." i'm kelly evans live today from the yale ceo summit at the wall dorv hysteria. >> i'm bill griffeth keeping the home fires burning at the new york stock exchange. today it's oil versus the fed for the market. stocks have been pulling back as oil falls again testing monday's lows, this of course after a strong market equity rally on the back of yesterday's fed interest rate hike. we will see whether the stocks can make a come back in this next hour or so, kelly. >> and we've got some big guests set to join at the at the yale