worth a shot. i just mentioned one thing, i was calling for a taxi earlier and doc came running over. >> i get a black line across this. >> you're there, baby. >> guys, good stuff. have a good weekend. we'll see you next weekend. a holiday shortened week. stock market selling off. "power lunch" picks up that story now. indeed we do, scott. thank you very much. welcome to "power lunch." along with mandy drury i'm tyler mathisen. as you see a steepening set of losses. 281 points on the dow, down 1.66%. the nasdaq off 61, and the s&p in percentage terms sort of splitting the difference between those two first ones we mentioned off 1.3%. the sell-off steepening in recent moments. >> but i think it's very interesting to focus on oil for a second because what is happening here as wti crude while it is slightly to the

downside now was heading higher. crude managing to move higher at that stage. right now it is losing a little steam. gold is holding above the $1,000 mark. that has been the level to watch in recent days. up by $15 an ounce. and the 10-year note, the yield going down. 2.19% is where we're sitting right now for benchmark yields. late yesterday we were at 2.238%. so despite the fed hiking, yields moving lower. >> let's do our vanna and say ja sajak and show people the heat map. if you want a graphic representation of a down day, this is it. only three of the dow 30 are higher, including disney. down about 4%. this on the day "star wars" debuts and we'll have more on that later in the broadcast. >> we will, indeed. and this is actually the 14th day out of the last 16 sessions,

ty, we've seen a triple digit move. either up or down intraday for the dow. >> you've got caterpillar, which has been a troubled company over most of 2015, and chevron there. basically chevron is flat. it's not moving up much, but it's not moving negative. so you have sort of a couple of winners there, two right now. caterpillar and walmart and everything else is red. >> ten sectors on the s&p are moving lower. let's bring in some traders. ben willis from princeton securities. let's pick up on that point i was making earlier about the divergence between oil and stocks. yes, oil is slightly lower now, but in the middle of morning trade it was actually moving higher while we saw the stocks steepening their losses. this has not been happening recently. >> oil is definitely having an impact. however, it's not the commodity

itself meaning where the contract is trading. it's trading in its own market because of a soon-to-expire contract itself. that being said, what you are seeing in the broad sense of the stock market is definitely commodity effective. the commodities are affecting the financials today because of a loan loss reserves that continues to be taken, whether it's citigroup today or shanghai today. they're taking loan loss reserves into their book because of their energy positions. >> much of this is sort of a hangover from the fed do you think as well, steve? on the day of the fed hike, a lot of people were congratulating janet yellen who had successfully managed the hike without causing a major tightening tantrum. it seems to have had a bit of an after tantrum. >> we thought the market priced it in rather well. well, i guess we thought wrong just a little bit. i'm looking at utilities and

looking it he staples. those are the two areas that led all week. they're both still up for the week but both getting hammered today. it looks to me like traders with profits are taking profits today and you also have the other traders running themselves out of risk. so we have a little bit of an exacerbation here. 2008 is your level to the downside. that's where the line in the sand is. if that breaks, we're probably going into the 1900s. >> let's talk a little bit, ben, if we might about whether not in the long term, but in the immediate term stocks can go up if oil doesn't? >> absolutely. there has been a disconnect where the oil markets because they're global and coming in from overseas tend to have an initial impact on the s&p indices which is going to the today's exploration, most of the selling pressure you're seeing is because of pressure on the energy stocks trading against what is a sell imbalance. that was early in the more than and energy is no longer the

worst of the group of the financials an utilities have taken that over. there is a connection. however, it doesn't walk in lock step as the market ages throughout the day. >> agree 100% with ben willis on that, by the way. i'd like to also talk about the transports. those are the guys that move energy, they're getting whacked here today. >> talk about a terrible year for the dow transports, right? what about a santa claus rally? is that off the cards for this year? >> i have spoken publicly about approaching 2100 by the end of the year so i'm kind of held to that. i think it's still possible. i think we still might get this move upward but we're going to get sick to our stomachs first and starting with this guy. i'm going to play it by ear. every weekend i take the charts out and do the homework. i'm going to see if i need to rejigger anything and move from there. >> all righty, boys. thank you very much. ben willis and steven gill foy.

>> interestingly enough, material stocks, that sector overall, the best performing sector so far today even though it's in the red. it's down fractionally. only down by about one-third of 1% despite the bigger sell-off. if you look at some of the names holding up the material stocks, freeport-mcmoran, newmont, alcoa, those names are doing very well. they have something in common, they've all been very beaten up over the course of 2015 as well. perhaps just getting a bit of an oversold bounce on these conditions. still materials now off by more than 2%. overall the material stocks certainly a focus for a lot of investors, but at least some of them, the oversold ones, are at least catching a bit of a bid. >> thank you very much. oil sinking again headed for its third weekly loss. we'll get all the numbers now from jackie deangelis at the nymex. hi, jack. >> good afternoon to you. we just hit new session lows, $34.29 is the print we just saw

a few minutes ago and it's been a really interesting session. the intraday range really spreading out. $34.29 on the low side, $35.57 on the high side and right now we're trading at $34.41. so what's happening here? this volatility is going to continue as your guest said before, i think a lot of it has to do with the fact that the january contract is going to expire on monday. so not necessarily the best sense of what oil is really going to do in the coming days. a lot of people are still bearish, they're still talking about hitting the 20s as being a possible. one of the reasons we might have seen a little upside earlier in the session, some short covers and opec out with its world oil outlook saying prices will remain below the $100 level for an extended period of time but they will see demand pick up next year. it was slightly positive but not enough to hold us up. >> developing news, turing pharmaceuticals replacing martin shkreli as the ceo after he is arrested by the fbi.

this is not what you want to see your ceo doing. he was arrested yesterday on charges of security and wire fraud. meg terrell joins us from outside shkreli's apartment. >> the news coming in the last hour. turing pharmaceuticaling saying mart martin shkreli will be stepping down. they say, while we wish to thank martin for helping us build turing pharmaceuticaling we wish him the best in his future endeavors. turing put out a statement yesterday. this makes one question what will happen at the microcap biotech company that just last month named shkreli as its ceo after he took a big stake in the company. it's a very, very small company and trading has been very volatile. dropped quite a bit yesterday

before being halted so the trading looks a little funny there. but just to recap, shkreli was arrested yesterday and charged with seven counts including securities and wire fraud. that involved not turing pharmaceuticals, his current company or former company now, but his previous activities at his hedge fund and his former biotech company. the charges are he misappropriated $11 million to pay back disgruntled investors. they distanced themselves from shkreli. they're suing him for several of the same claims the government is bringing against him. shkreli faces up to 20 years maximum sentence. he's expected to appear in court again on january 20th and in a statement last night he said he expects to be cleared of all charges. we'll bring you any more updates from here, guys. >> thank you very much for keeping us updated. shares of carmax are down more than 8% on the back of an

earnings miss. disappointing sales of used cars in the third quarter. what's that saying about the sector? phil lebeau is in chicago. why can't they move used cars, phil? >> that's surprising given the market we have for used cars in the united states is close to an all-time high. it's not that they're having problems moving used cars. it's that certain models are in high demand. when you look at the third quarter earnings for carmax, they missed by 5 cents coming in at 63 cents a share. the street was expecting 68 cents. revenue was up 4.3%. when you look at the third quarter for carcarmax, here is issue. there is a tight supply of hot models which was exacerbating the problem. used versus new price gap. what do we mean by that? well, when you look at the people going to visit a carmax lot or go to any dealership lot, this is what they were looking at for a monthly payment in the third quarter. the difference between new and

used about $120, but look, there's not much of a difference between used and leased, and because that's such a tight gap analysts believe a number of people were saying, you know what? i might as well lease instead of buy used. >> there really isn't a large supply of zero, one, two, and three-year-old vehicles in the same category. when faced with similar payments we believe some consumers are opting to go with new vehicles relative to used and that's weighing on carmax sales results at the moment. >> and what vehicles are in demand right now? we've been talking about this for some time. look at the split in demand for trucks and suvs versus cars. in fact, that's at about 55% right now for trucks, suvs, crossovers. that's close to a record high, guys. the record high was in 2004 when it was 55.8%. we're just shy of that right now and because of strong sales in december, we could see the market overall eclipse that.

>> fascinating stuff. phil lebeau, thank you very much. congress has just approved a $1 trillion government spending bill. billions in tax breaks included there but what exactly is in it? eamon javers is in d.c. with the details. >> hi, tyler. i have to admit i have not read this entire thing but it was a $1.1 trillion spending bill, also a massive tax package alongside of that passing the house and senate today on its way now to president obama for his signature, but there's a lot of people here in washington today patting themselves on the back. both democrats and republicans say they are winning here in this bill. take a look at the top three highlights. democrats say they were able to obtain in the bill, number one, delaying the so-called cadillac tax on high value health care insurance in obamacare. that was the one that the unions in particular really, really wanted. also expanding wind and solar tax credits. reauthorizing land and water conservation fund. republicans for their part similarly touting a lot of wins

they sought in this package including repealing the 40-year-old oil export ban. that's made possible by these low gas prices we have seen across the country change the politics on that one. increasing military spending. also a big win for republicans and strengthening the visa waiver program, a key priority of republicans said speaker of the house paul ryan. interestingly we saw nancy pelosi, the house democratic leader on capitol hill right after this vote saying republicans were so eager to get that oil export ban passed in this package that they, quote, gave up the store on negotiating on a whole host of other fronts, so pelosi very happy here and we just saw mitch mcconnell, the senate majority leader for the republicans, talking to cameras a few minutes ago. he said that the senate is now back to regular order and functioning again, and he predicted a whole slew of bills that might pass next year, guys. so some bipartisanship breaking out in washington. >> very ignorant question on my part s this the end of

sequestration, that word that was is current in 2011? >> they broke through the budget caps in that budget negotiation that you heard about a couple weeks ago. they put a new cap on saying this will be the new spending li limit and this bill authorizes all the spending that goes under the cap. puts in the details, hangs the old ornaments on that christmas tree to use a seasonal metaphor. >> thank you very much. let's bring you up to date on the market sell-off that's sort of leveling right now but at a low level. 256 points down. about 1.5% on the dow. the s&p down a little less in percentage terms so 1.2% at 2017, and the nasdaq is at 4949, down 53 points or 1%. back to washington now, a lot happening there. president obama expected to hold a news conference at the white house before he and his family depart for their annual christmas vacation in hawaii.

let's bring in john harwood. john, we've heard the president in recent days. yesterday out at the counterterrorism center in mclean. i assume he will receive a lot of questions today on national security and counterterrorism. >> reporter: no question. the president is determined to do better than he has done over the previous weeks in communicating a national security message and explained to the american people why they should be vigilant but not panicked, that their homeland security team is watching potential threats, that they have a strategy to take out isis, although maybe not the one that some republican critics of the president are in favor of. so i would expect that to be part of his message today, both in the questions and in his own statements, but also to try to use the occasion of this press conference before he flies to hawaii to recap some of the things that he feels good about having accomplished this year. the global climate deal, the

iran nuclear deal, some of the things that eamon just talked about, that they got in the end of year tax and budget compromise with republicans, including money for green energy, including some of their priorities. even from the stimulus package in 2009, some tax credits and tax benefits for lower income people. those are all things that the administration is pleased with, and, of course, the fact that we have not had and will not have a government shutdown. >> john, we'll be back with you both i guess before and then after to get reaction to the president's news conference. john harwood on the north lawn of the white house. now, we will carry that news conference as soon as it begins. it is expected to start about 1:50 p.m. eastern time, but that is a soft target, so to speak. mandy? >> let's get to josh lip to be with -- lipton with a news alert. >> hi, mandy, on sunday "60 minutes" will be airing what

looks to be a wide ranging interview with apple ceo tim cook and "60 minutes" releasing a clip of that interview. you will hear charlie rose ask cook about the criticism that the company pays little or no tacks on its overseas revenues. take a listen to cook's answer. >> how do you feel when you go before congress and they say you're a tax avoider. >> what i told them and what i will tell you and the folks watching tonight is we pay more taxes in this country than anyone. >> well, they know that and you should because of how much money you make. >> i don't deny that. we happily pay it. >> more money overseas probably than any other american company. >> as i said before two-thirds of that business is over there. >> why don't you bring it home? >> i would love it bring it home. >> why don't you? >> it would cost me 40% to bring it home. this is a tax code, charlie, that was made for the industrial age not the digital age.

it's backwards. it's awful for america. it should have been fixed many years ago. it's past time to get it done. >> but here is what they concluded. apple is engaged in a sophisticated scheme to pay little or no corporate taxes on $74 billion in revenues held overseas. >> that is total political crap. there's no truth behind it. apple pays every tax dollar we owe. >> so cook clearly agitated with that question saying that the problem is not with the tech ju giant in cupertino but the lawmakers in washington. rose was going to ask cook about encrypted messaging. it's become a hot topic after the terrorist attacks in paris. cook's position has consistently been we can't create a back door because if we do, i can't create a back door just for the u.s. government without creating potential access for bad actors,

hackers, and other foreign governments. the interview airing on sunday looks to be a pretty good wide-ranging one, guys. >> looks like it's got a little heat no it too. apple stock is down by 1.7% today and year-to-date it's down by 3% but it certainly points to the fact apple is is not the only big multinational under fire over this kind of, you know, tax issue. a lot of other big techs in silicon valley that have also been accused of evading tacksxey keeping money overseas. >> it's a criticism. a lot of tech giants have businesses over seas, generating business over seas. their counsterpoint is we have lot of business and a lot of money, but to bring that back, i have to take a hit i'm not willing to for my company and for my shareholders. >> we'll be watching. thank you for that snippet, for that preview. we have another big sell-off

going on. the dow is currently to the downside by 262 points. it's had triple digit moves in 12 of the past 14 sessions and that includes today. it really does show the heightened volatility for the dow and the s&p. the last two days of sell-offs are the worst since august 31ers and september the 1st. plus, the force is finally here, folks. but is disney taking a hit? why they got a downgrade. what's going on? it's off by 4% and dragging the dow down with it. we are cnbc, first in business worldwide. we'll have an interview on disney stock in a second.

welcome back to "power lunch." check out what's happening with the cruiseliners. carnival, royal caribbean, they're all trading higher despite the broader market sell-off. that's thanks to cheaper fuel costs. carnival's gas bill, it was cut in half last year. that helped boost the profits of the company. carnival did book fewer passengers due to higher ticket prices though. the stock is coming off its best levels. still a market green performer in a sea of red. >> thank you very much. downgrade forcing disney lower despite the fact that "star wars" posted record numbers for its thursday release. it brought in $57 million yesterday. as we head into this pivotal opening weekend many think will

be the biggest opening weekend ever for any movie anywhere. martin pikkenn, will "star wars" move this stock? >> it will. i think the bigger story and if you go back to avatar six years ago and i think this is going to apply to "star wars," it's going to have long legs into the new year. obviously people are busy and so forth during the holidays, but i think this is going to be a big film probably right through march or so into april. it doesn't open in china until early january. so those factors are going to play into this. i think the movie has been created to bring in a new audience, frankly, not only the "star wars" diehards from years ago and i think it will give it that long legs into the new years. big opening weekend probably sets a new record but the real story i think is going to be the several-month continuation of that. >> you certainly have heard of this downgrade that the stock took earlier today, and that is

one of the reasons why it is down. i don't know how familiar you are with that downgrade but why don't you address it. you would not downgrade the stock, would you? >> no, i wouldn't. i saw your segment on earlier. i get rich's point about espn. it is challenged. i have said that. i think it's missing the fact that disney is more than almost any other company in the s&p and certainly in the media and entertainment group, it's a portfolio of a lot of assets, foreign cable subscribers outside of espn, other things going on in the company, obviously merchandisizie iing a forth. i get the point but it's missing the fact of the portfolio of assets, not only this film and the studio and i think if you look at it that way, i'm still at a buy and still a $130 price target. everybody is looking at next year and i think it will outperform the s&p. >> great to hear from you martin pyykkonen. >> my husband tried to get

tickets for this weekend yesterday. good luck with that one. is sell-off on the street. big triple digit losses, two days of losses. one thinof the things hanging o the market is junction bonds. also a look at some of the most active. let's take a look at the board there. "power lunch" is back in two.

welcome book back to "power lunch." let's get you a check on the bond market. the weakness in stocks is sending a number of investors into the safe haven of government treasuries. you can see here behind me that bond prices are moving higher. yields are moving lower. in fact, the ten-year note behind me at 2.18%. yesterday in late trade we were sitting around 2.23%. that's a quick bond report for today. as for gold prices, they're also closing as we speak. jackie deangelis at the nymex. how are we looking? >> it looks like we're going to close up about $15. it's a 1.5% move higher on the day, but down 1% on the week. some notes here courtesy of george at rbc. open interest in gold is up. bargain hunting definitely happening today in the session. short covering happening as well. the dollar pull back supportive of gold's prices. we see a cautious tone as we're going forward. traders are watching these moves in commodities very carefully before they make a bet either way, but right now around that $1,065 range is another key

level. we could see $1,100. got to wait and see. back to you, ty. >> jackie, thanks very much. a quick market check on this very busy end of the week and that market sell-off continues. now down almost 290 points. steepening just a bit in the past ten minutes. down 1.6%. the nasdaq, off 59 points, 1.2% lower, and the s&p 500 at 2015, it is off 1.66%. new data from lipper shows that u.s. high yield junk bonds have posted nearly -- the largest redemption rate since august of last year. tracy wright oversees $11 billion in high yield assets for pioneer investments. tracy, welcome. good to see you with a smile on your face after a hard week in the market, hard few weeks in the market. have you been seeing heightened withdrawals from your fund? >> we have seen heightened withdrawals in our funds not to the degree of what we're seeing

inside the market, but we are seeing some redemptions, yes. >> and have you prepared for it by raising liquidity? >> yes. we have been preparing for this. the reality of the market is that liquidity has been much more difficult to come by, you know, over the past few years, and so, therefore, going into this period we have increased our liquidity and feel comfortable. i think at this point on december 18th from a seasonal impact, liquidity is dear, and if you're not prepared today, then, you know, like i said, we've gone into this period knowing this was going to be a problem. so this week has not been an issue for us per se. >> forgive me for asking these questions but obviously these are top of mind for a lot of shareholders. is my fund going to be able to redeem my shares at the moment i want to get my money out, and

you're comfortable that you have done what you have and you're under no stress in that regard, correct? >> yes. absolutely. between -- there has been trading this week. we were able to trade bonds, and to the extent we felt some bonds were overvalued and there was a bid, we were able to trade bonds. so that has not been an issue. as i mentioned going into this period we had liquidity and have been increasing that over the course of i would say the last 18 months. so in the interest of hoour shareholders we thought that was bess. >> in an environment where we're potentially looking at more fed interest rate hikes, how does that change the e quitiquation trading. >> wednesday's move didn't have an impact on our market per se. tightening monetary policy does over time impact it but we're a far ways away from that.

from our standpoint i don't believe it's a near-term issue. certainly something we're watching. however, given the fact that fundamentals, ex commodities and energy, remain strong in the u.s. high yield market, we are comfortable. you have to sort of take a step back and recognize that rates still remain incredibly low. for the companies that have the cash flow and the balance sheets to withstand that, we'll be okay. >> quick question about your fund's exposure to energy securities. obviously they're a large part of the market so you must have some in oyour portfolio. are you overweight, underweight? what percent of your portfolio are energy? >> at this point we are underweight and have been for the latter half of the year. we have to differentiate between short of where valuations are today which is considerably -- there's a fair amount of high

default rate already priced into that space. to take a broad look at sort of what you own and how much your companies could withstand at the lower levels is an important differentiating factor certainly going forward. >> thank you so much for coming on and taking our questions and speaking to your shareholders and our broader audience. tracy wright of pioneer investments. >> we continue to sell off. take a look at the dow, now down by 284 points. despite that, the dow, the s&p 500 and the nasdaq are still marginally higher for this very volatile week. a look at some of the most widely held stocks, apple and jpmorgan are both down about 2% and also we're watching for president obama. he is set to hold his year end news conference in about 15 minutes' time. we here on "power lunch" will be carrying it live for you. stick around.

hello, everyone. i'm sue herera. martin shkreli has stepped down as ceo of turing pharmaceuticals. he was arrested yesterday by the fbi and charged with seven

counts, including conspiracy to commit securities fraud. the case centers around his time as ceo of another biotech company. officials say he ran that company like a ponzi scheme. jopmorgan chase will pay to settle charges over failing to disclose conflicts of interest to clients. former stone temple pilots scott weiland kid of a toxic mix of drugs. he was found dead on his tour bus outside of minneapolis. he was 48. and it's a real litsfe casef "foot loose" in new hampshire. the principal of exeter high school is banning dancing. dance moves by students have become too suggestive. the junior and senior proms will be held but no dancing. i guess you could call it a high

school stand instead of a dance. >> come on, they're teenagers. it's supposed to be suggestive. hormones are raging. anyway, okay. thank you. stocks are sharply selling off for a second straight day with the dow currently down more than 250 points. the dow and s&p are on track for their worst two-day session since the end of august. with me is katy nick. thank you for joining us. katy, picking up where we left off with the high yield quest n question, tracy wright said they've been prepping for that moment for quite some time. you're quite sanguine about the high yield market as well, why? >> absolutely. there's a lot of bad news right now being reflected in the valuations of the high yield market that just aren't really supported by the fundamentals. now, we know that the fundamentals in certain sectors have deteriorated and your prior guest mentioned energy and

materials. those spreads have widened out significantly but there have been higher junk bond spreads that have also widened for no good reason other than investors are pulling money out. we look at nearly 9% in high yield market recognizing that the stress is very concentrated in energy and materials and we see that as a pretty good entry point for investors. >> what about you, sandy? is this something you would touch? >> we don't have a big commitment to high yield but we have more than a neutral exposure and we're very similar. we tend to be pretty quality oriented, if you will, within that sector, so we're very, very sensitive to it. we didn't have a lot of exposure to the energy segment. there's still opportunities and the cushion with the cash yield there is pretty substantial for a portfolio as well. >> sandy, as you were speaking we're currently hitting social lows in the markets and, of course, energy is now selling off as well. earlier we had a pop in crude. crude prices are now curb rently moving back down. when you last came on, katie, i

think it was in october, you like energy at that point, but not the case now. did you just throw in the towel at this time? >> i wouldn't say we're negative on energy but what i would say is it's very, very hard to judge where the fundamentals are going to play out with this consistent excess supply that doesn't look like it's going away. so i think the fundamental picture is very murky at this point. we do recognize though that there's a lot of value being created in the energy sector and we're really looking from the sidelines at this point in terms of when to take advantage of it. >> but not yet is the bottom line, not yet. sandy, what do you like in terms of sectors, especially keeping in mind portfolio allocation going to next year? >> well, i think when we look at next year, we see more silver linings for the u.s. obviously the fred is stretching -- walking the line if you will but other central banks are accommodative. if you look at 2016 valuations are fair but there are a lot of companies in the s&p that still have strong earnings, strong

revenue growth so we think the issue is selection. we're big believers in diversified portfolios. we think you can get a decent single digit return out of equities even if the aggregate s&p doesn't give you -- >> real quick you like masco, tri pointe, and palo alto. palo alto is already up 53%. do you think it can keep on outperforming like that next year? >> this is a king kong player, only a 10-year-old company. but they're growing revenues, 35%, 40%, 45%. it's firewall, it's invasion protection. it's all of the things that are cyber security related which is a huge market. it's an expensive stock, so you want to be very careful about the entry point. masco is growing earnings at solid double digits. we own it in the bmo large cap growth funds and it's a terrific growth story. cabinet trifor kits

cabinetry for kitchens and offices. >> it's all about the stock pitting. thank you very much, katie and sandy lincoln. go to "power lunchpowerlunch.cn. >> mandy, you said we were at session lows or near them. the dow down about 300 points, 277. moments ago it was down 293 at 17,218. nasdaq off 56 and the s&p down 25. carmax a new 52-week low. retail stocks also at new lows. bed, bath, and beyond, tiffany, game stop. cisco, wells fargo, gilead, comcast, all ready today. we'll ask a man with nearly $2 billion under management how he is putting that money to work right now. we'll do that and more when

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let's give you a market check now on this sell-off friday where the dow industrials off 277 points. nasdaq down 56. the s&p 500 off 25. those are 1.25% to 1.66% declines. let's move and take a look at oil now down 0.75% intraday at $34.69. that's about a quarter of a dollar's slide in the price of west texas. let's bring in paule ebner. good to have you with us. are you more long now or short or do you aim to be sort of offsetting each way? >> we're a market mutual fund but we do allow ourselves to take small directional exposure. at the end of the november we were tactically long 18%, 19%. we brought that in at the start of december quite a bit.

we're now less than 10% net long. outlook the rest of the month is to probably remain there. one of the benefits of the fund is not having to take a big market bet to generate returns. >> and you are a global fund so where are you long and where are you short and why? >> that's right. one of the best opportunities that we see right now on the long side are owning noncommodity producing stocks in economies that are -- markets that are driven by commodities. specifically stocks in places like norway, canada, and to a lesser extent australia. they do things like telecommunications that are big exporters of maybe consumer staples, packaged food products or paper and packaging companies. these are names that have sold off with the index. people have shunned those markets because they're worried about energy prices. a lot of these economies, take canada for example, 30% of gdp gets exported, two-thirds of that comes from the u.s. these economies are benefitting from the weak currency and those

exporters aren't being affected as much by oil as people are implying. >> so you basically are buying those on the theory there's a bath water/baby thing going on there in the commodity-driven economies. you see lean towards the noncommodity stocks there. so where are you short if those are the sectors where you're long. >> that's correct. so our biggest shorts right now are in core europe. those are against the countries that i mentioned but also u.s. would be a big long as well. the reason why we're short the eurozone in particular here i'm talking about germany, france, the netherlands, belgium, austria, we've seen a huge amount of capital this year flood into those economies. people have expected at the start of this year that qe was really going to drive their economic growth going forward. we have seen some asset price inflati inflation. we even started the year long europe. we flipped to being short europe in the second quarter. what we see is the fact economic growth is starting to decelerate in places like germany.

we look at consumer search activity. they're searching less and less for big ticket items showing signs the consumer is not recovering their consumption compared to the united states where it's relatively robust. >> give me a quick thought on what you make of today's big sell-off and yesterday's for that matter, 1520 seconds, please. >> we're not reading too much into what's going on in the markets. at the open we had the quadruple witching. the s&p rebalance at the close. oil has moved a lot but again on a day like this after a decent rally into and following the fed, i see this as giving back some of those gains that probably people just bought the market on the relief of the fed news. >> paul, have a great weekend. mandy? >> i have the big wall behind me. the s&p 500, let's look at the sectors. the overall index is now down about 2% year-to-date and, of course, we all know there really isn't much left in the year so if it wants to try to get that to break even, it has a lot of heavy lifting to do. materials not doing as badly as

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and we are awaiting there at the white house the president's closing press conference of the year. it was slated for 1:50 but as is often the case, the president is running a little bit behind but we will go to it, mandy, as soon as it begins. >> we certainly will, ty. let's get to dominic chu for a market flash. >> well, you know, if somebody was going to take my time away from me, i would rather it be the president of the united states and the most important leader in the free world than anyone. >> exactly. >> let's talk about what's happening with the market sell-off. we are just off of our worst levels so far today. one of the bigger casualties so far, home builders as well. you can take a look there. pulte group, toll brothers, d.r. horton, even lennar trading down 2% or so. this despite lennar posted better than expected quarterly profits.

other the past year or two years, home builders have been a big focus and they have been powering some of the gains in the marketplace so to watch them getting taken down with the overall market is interesting for some giving the fact housing a still a big concern for people in the overall economy. >> thank you very much. as we check the markets once again, the dow off close to 300 points. there you see just two, just two -- 263 points. just two of the down 30 are higher, walmart and caterpillar, and disney on a downgrade right there in 29th place. we're awaiting a news conference from president obama and we will bring it to you as soon as it brings on cnbc, first in business worldwide. every dollar count. it growing g that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands

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welcome back to "power lunch." shares of twitter are at fresh lows for the day working on their second straight day of losses here down by just around 2.5% or more. the social networking company has fallen sharply since hitting a 52-week high of over $53 a share in early april. this would represent a new record closing low since the company went public back on november 7th of 2013.

>> dominic, thank you very much. president obama will hold a news conference at the white house before he and his family depart for christmas vacation with an intermediate stop out in southern california to meet with some of the families of the victims of the san bernardino shootings a couple weeks ago. let's bring in our john harwood. what do you expect to hear today, john? >> reporter: expect the president, tyler, to recount the successes that he experienced in 2015 and then point ahead to what he's going to do next year. when you look at the successes you're talking about things like the iran nuclear deal, the paris climate change accord, and the provisions of that tax and spending deal that was just struck with congress. if you look at the places he's been on the defensive, place that is voters are not happy with him, it's the fight against isis and the administration has been making the argument that their strategy is the right one but we need to communicate better with the american public. that's why the president was at

the pentagon, at the national counterterrorism center yesterday, and i would expect him to reiterate the message of, a, we've got a strategy to fight isis over there in iraq and syria, b, homeland security and our domestic law enforcement capability is on the case 24/7 even though there's some attacks like san bernardino that they will argue you cannot prevent, and want americans to be vigilant but not paralyzed by the fear of terrorism and all the soft targets which are -- everyone is now cognizant of in a way that we weren't before paris and san bernardino. >> i suppose he would say by going on his traditional vacation he is not disrupting his life in any way and would urge americans to do the same. forgive me for having lost track of a couple of -- of where we stand on a couple of those accomplishments you mentioned. the arms agreement with iran is one thing.

the transpacific trade partnership is another, and the climate accord is a third. which, if any of those three, is still subject to congressional approval? >> transpacific partnership, and this is a key priority for the administration. we've seen recently mitch mcconnell made the case that we may not get an early vote in 2016 on the transpacific partnership. everyone agrees the votes are there in the senate to pass it and it will eventually pass. the question is when. the administration's argument is that it needs to be done earlier in the year to reassure our ally that is we're actually going to follow through to prevent china, which is concerned about the impact of this agreement on its economic dominance and role in asia that all those are republicans to do it faster. paul ryan, the new house speaker with whom the administration has a very good working relationship, has indicated he could see a path toward a vote early in the year.

the administration's hoping that what paul ryan has indicated will in turn put pressure on mitch mcconnell not to wait until a lame duck session after the lebs to put it up for a vote. >> we're still waiting for the president to come out and speak. we'll take that live as soon as it does happen. in the meantime, a big sell-off happening on the street for the second day in a row. i'm going to hand it out to you, ty, once again and also to melis melissa. over to you. >> thank you very much. and i will stick around along with melissa lee over at nasdaq as both of us, melissa, await the president. >> yes, we do. of course, as soon as he walks out we'll bring that to you as soon as it starts. in the meantime, we do want to take a check on the markets because as mandy mentioned, we are seeing a sell-off on the last trading day of the week, the week the fed historically raised interest rates for the first time in nearly a decade. the dow is down by 1.4%, 244 points. the s&p 500 down by 1.1% and the nasdaq composite down by just

under a percent right now. there is a green spot in the markets right now, and that would be the solar stocks. they had been booking some gain after congress passed a sweeping spending bill that would include a tax extension for solar energy companies. the gainers for today. trina solar, sunpower, as well as canadian solar extending the gains we had been seeing. let's get down to the floor of the new york stock exchange and check in with bob pisani. >> hello, melissa. wall street is in a bit of a funk today, and i think i can understand and explain what's going on. you know, oil has been smacking around the markets all during the week. today oil is relatively well behaved. there is an expiration for the oil contract on monday and that may be influencing things a bit but i think the lower for longer theme is what's going on. you know about lower for longer in oil. that oil will remain a low for 2016 but the theme is now

broadening up. people are talking about lower for longer in natural gas, in steel, in copper, in aluminum, in industrials overseas and even in interest rates and even in emerging markets. how long is this lower for longer? what does it mean? well, things will probably stay low through at least the first half of 2015 a lot of people believe. let's take a look at the financials here. there's two stress points. the first one is fewer rate hikes leaves less opportunity for the banks to raise rates. that's not good. that's the main reason they're down. lower for longer on oil increases the chance the banks might have to take write downs on the energy loans as well. take a look at industrials. they've struggled. beau something do boeing is down today. there was a downgrade at wells fargo. there are talks about companies slashing their operating and capital budgets to adjust to the slower global economy. there's also lower for longer theme playing out. interest in the lower for longer theme originated with oil stocks which you know has been

destroyed this year but today many of them are on the upside. evenly split as people try to figure out how much lower oil can go. there's all sorts of opinions over there. i see $50 and $60 and i see $30 for all aoil all over the place. as for the federal reserve, people are in all sorts of knots over this. a lot of people think they are in trouble even if they do raise rates anymore and even if they do raise rates. wall street is in a bit of a funk right now. hopefully that might change over the course of the next couple weeks. any move up in commodities, any more stabilization in that area will definitely cause a bit of a rally. >> bob pisani, thanks so much. let's check in with john harwood here ahead of president obama's news conference. john, what are we expecting here? >> we've just gotten the two-minute warning. we expect him to come out and make remarks at the top

recapping some of the achievements in 2015, some of the things he's looking forward to in 2016, try to reassure americans as they travel for the holidays, that their national security officials are on the case and trying to do what they can to prevent the likelihood of another attack and then he's going to take questions from the press. i would expect the toughest ones will go to his management of the conflict with isis and whether or not the administration is doing enough, whether they underestimated isis, whether they need to do more now and i would expect the president to defend his policy and say that what we need to do is communicate better to the american people the things we're doing. >> in our world, john, the world being business and finance, do you expect him to field some questions about what happened at the fed a historic rate higher on rates. >> yes. i wouldn't expect him to say much about it. he's been pretty disciplined about avoiding comment on the independent federal reserve, but i would expect him to talk about the tax and spending measures in the budget deal, to talk about

the not gangbusters but decent level of job growth that continues unbroken since the end of the recession and tout that going into 2016. >> what would the thorniest topics be for the president as he heads off for two weeks this being the last time we will see him until the new year. >> national secure, no question about it. we saw a republican debate earlier this week when all the candidates agreed the president's strategy has been a disaster. he, of course, doesn't share that opinion, but he has to defend himself. the american people are judging him negatively on that issue right now by a lot. he's only got about a third of the american people who approve of his handling of the fight against isis, and he's going to use this and other communications opportunities to try to turn those numbers around. >> john, the tax and budget deal that was just concluded yesterday, this morning, last night, whenever, in the house

and then in the senate -- here comes the president. why don't i just hold that question for later. let's watch. >> good afternoon, everybody. clearly this is not the most important event that's taking place in the white house today. there is a koreaniscreening of wars" for gold star children and families coming up, so i will try to be relatively succinct. let me say a few years about the year behind us and ahead and then i'll take a few questions. as i look back on this year, one thing i see is that so much of our steady, persistent work over the years is paying off for the american people in big, tangible ways. our early actions to rescue the economy set the stage for the longest streak of private sector job growth on record with 13.7 million new jobs in that time. the unemployment rate has been cut in half, down to 5%, and most importantly wages grew

faster than at any time since the recovery began. so over the course of this year, a lot of the decisions that we made early on have paid you a. years of steady implementation of the affordable care act helped to drive the rate of the uninsured in america below 10% for first time since records were kept on that. health care prices have grown at their lowest level in five decades. 17 million more americans have gained coverage and we know 6 million people have signed up through healthcare.gov for coverage beginning on january 1st. 60,000 on tuesday alone. new customers are up one-third over last year, and the more who sign up, the stronger the system becomes, and that's good news for every american who no longer has to worry about being just one illness or accident away from financial hardship. on climate, our early investment in clean energy ignited a clean

energy industry boom. our actions to help reduce our carbon emissions brought china to the cable and last week in paris nearly 200 nations forged a historic agreement that was only possible because of american leadership. around the world from reaching the deal to prevent iran from developing a nuclear weapon to re-establishing diplomatic relations with cuba, to concluding a landmark trade agreement that will make sure that american workers and american businesses are operating on a level playing field and that we rather than china or other countries are setting the rules for global trade, we have shown what is possible when america leads, and after decades of dedicated advocacy, marriage equality became a reality in all 50 states. so i just want to point out, i said at the beginning of this year that interesting stuff happens in the fourth quarter and we are only halfway through.

i do want to say congress for ending the year on a high note. i got to sign an education bill that is going to fix some of the challenges that we had with no child left behind and promises to invest more in high-quality early childhood education. we signed a transportation bill, that although not as robust as i think we need, still allowed states and local governments to plan and actually get moving, send people back to work rebuilding our roads and bridges. we got ex-im bank back to work and today they passed a bipartisan budget deal. i'm not biwild about everything but i'm sure that's true for everything but it is a budget that invests in our military and middle class.

it's part of an agreement that will permanently extend tax credits to 24 million working families. it includes some long-sought wins like strengthening america's leadership at the imf and because it eliminates the possibility of a shutdown for the first time -- or for the first nine months of next year, congress and i have a long runway to get important things done on behalf of the american people. now, there's still a lot of work to do. for example, there's still a lot more that congress can do to promote job growth and increase wavenl wages in this country. i still want to work with congress, both democrats and republicans, to reform our criminal justice system, and earlier today i commuted the sentences of 95 men and women who have served their debt to society, another step forward in upholding our fundamental ideals of justice and fairness, and, of course, our most important job is to keep americans safe.

i have had a lot to say about that this week but let me reiterate the united states continues to lead a global coalition in our mission to destroy isil. isil has already lost about 40% of the populated areas it once controlled in iraq and it's losing territory in syria. as we keep up the pressure, our air campaign will continue to hit isil harder than ever taking out their leaders, their commanders, and their forces. we're stepping up our support for partners on the ground as they push isil back. our men and women in uniform are carrying out their mission with a trademark professionalism and courage and this holiday season all of us are united in our gratitude for their service and we are thankful to their families as well because they serve alongside those who are actually deployed. squeezing isil's heart, its core in syria and iraq, will headache it harder for them to pump their terror and propaganda to the rest of the world.

at the same time, as we know from san bernardino, where i will visit with families later today, we have to remain vigilant here at home. our counterterrorism, intelligence, homeland security, and law enforcement communities are working 24/7 to protect our homeland and all of us can do our part by staying vigilant, by saying something if we see something that is suspicious. by refusing to be terrorized and by staying united as one american family. in short, for all the very real progress america has made over the past seven years, we still have some unfinished business and i plan on doing everything i can with every minute of every day that i have left as president to deliver on behalf of the american people. since taking this office i have never been more optimistic about a year ahead than i am right now, and in 2016 i'm going to leave it out all on the field. so with that let me take some questions. i'll start with roberta ranton of reuters.

>> reporter: as you said earlier this week, there's no credible threat of a similar attack but how is it really possible to know -- i mean aren't similar plots going to be just as hard to detect before hand? and some lawmakers are saying your government should review the social media of all people applying to visas to come to the country. what do you think of that idea? should that be mandatory? >> well, roberta, you are absolutely right it is very difficult for us to detect lone wolf plots or plots involving a husband and wife in this case because despite the incredible vigilance and professionalism of all our law enforcement homeland security, et cetera, it's not that different from us trying to detect the next mass shooter.

you don't always see it. they're not always communicating publicly, and if you're not catching what they say publicly, then it becomes a challenge. we are continuing to work at every level to make sure that there's no slip between information sharing among agencies. we're continuing to strengthen our information sharing with foreign countries and because in part of the tragedy in paris, you're seeing much greater cooperation from our european partners on these issues, but this is a different kind of challenge than the sort that we had with an organization like al qaeda that involved highly trained operatives who are working as cells or as a network.

here essentially you have isil trying to encourage or induce somebody who may be played to this kind of propaganda and it becomes more difficult to see. it does mean that they're less likely to be able to carry out large, complex attacks, but as we saw in san bernardino, obviously you can still do enormous damage. the issue of reviewing social media for those who are obtaining visas i think may have gotten garbled a little bit because there may be -- it's important to distinguish between posts that are public, social media on a facebook page, versus private communications through various social media or apps,

and our law enforcement and intelligence professionals are constantly monitoring public posts, and that is part of the visa review process that people are investigating what individuals have said publicly and questioned about any statements that they maybe made, but if you have a private communication between two individuals, that's harder to discern by definition. and one of the things we'll be doing is engaging with the high tech community to find out how we can in an appropriate way do a better job if we have a lead to be able to track a suspected terrorist, but we're going to have to recognize that no

government is going to have the capacity to read every single person's text or e-mails or social media. if it's not posted publicly, then there are going to be feasibility issues that are probably insurmountable at some level and it raises questions about our values. i mean, keep in mind it was only a couple years ago where we were having a major debate about whether the government was becoming too much like big brother, and overall i think we've struck the right balance in protecting civil liberties and making sure that u.s. citizens' privacy is preserved, that we are making sure that there's oversight to what our intelligence agencies do, but, you know, we're going to have to continue to balance our needs for security with people's

legitimate concerns about privacy, and because the internet is global and communication systems are global, you know, the values that we apply here often times are ones that, you know, folks who are trying to come into the country are also benefitting from because they're using the same technologies, but this is precisely why we're working very hard to bring law enforcement, intelligence, and high-tech companies together because we're going to have to really review what we can do both technically as well as consistent with our laws and our values in order to try to discern more rapidly some of the potential threats that may be out there. david jackson? >> mr. president, congress made it pretty clear they're not going to let you transfer prisoners of the united states for trial but some people think you already have the executive

authority to transfer those prisoners and close gitmo itself next year. my question is do you believe you have that authority and are you willing to exercise it to close that place? >> first of all, we've been working systematically. another example of persistence, in reducing the population. we have a review process of those who are eligible for transfer. we locate in countries that have accepted some of these detainees. they monitor them and it's been determined that they can be transferred, and my expectation is by the early -- by early next year we should have reduced that population below 100, and we will continue to steadily chip away at the numbers in guantanamo. there's going to come to a point of irreducible population,

people who pose a significant threat that for various reasons it's difficult for us to try them in an article 3 court. some of those are going through a military conviction process, but there's going to be a challenge there. now, at that stage i'm presenting a plan to congress about how we can close guantanamo. i'm not going to automatically assume that congress says no. i'm not being coy, david. i think it's fair to say there's going to be significant resistance from some quarters to that, but i think we can make a strong argument that it doesn't make sense for us to be spending an extra $100 million, $200 billion, $500 million, $1 billion to have a secure setting for 50, 60, 70 people. and we will wait until congress

has definitively said no to a well thought out plan with numbers attached to it before we say anything definitive about my executive authority here. i think it's far preferably if i can get stuff done with congress. [ inaudible question ] >> as i said, and i think you have seen me on a whole bunch of issues like immigration, i'm not going to be forward leaning on what i can do without congress before i have tested what i can do with congress. and every once in a while they will surprise you, and this may be one of those places because i think we can make a really strong argument guantanamo continues to be one of the key magnets for jihadi recruitment.

roberta's question earlier about how do they propagandize and convince somebody in the united states who may not have a history of terrorist activity to start shooting, this is part of what they feed, this motion of our gross injustice. that america is not living up to its professed ideals. we know that. we see the internet traffic. we see how guantanamo has been used to create this mythology that america is at war with islam, and, you know, for us to close it is part of our counterterrorism strategy that is supported by our military, our diplomatic, and our intelligence teams. so when you combine that with the fact that it's really expensive that we are essentially at this point detaining a handful of people

and each person is costing several million dollars to detain when there are more efficient ways of doing it, i think we can make a strong argument. but i'll take -- i'll take your point that it will be an uphill battle. every battle i have had with congress over the last five years has been uphill and they keep on surprising you by getting stuff done. sometimes that may prove necessarily but we try not to get ahead of ourselves. >> i wanted to ask you about [ inaudible ]. the republicans who are running for president have argued that the middle east and the united states would be safer if you hadn't had regime changes. having gone through the experience of the arab spring and the aftermath, i wonder what you now see for the u.s. in terms of trying to push

dictators out of power. would you advise future presidents to call for leaders to step down and specifically in syria, at this point is it your expectation that bashar al assad -- [ inaudible ]. >> you know, there's been a lot of revisionist history sometimes by the same people making different arguments depending on the situation. so maybe it's useful for us to go back over some of these issues. we did not depose hosni mubarak. millions of egyptians did because of their dissatisfaction with the corruption and authoritarianism of the regime. we had a working relationship with mubarak. we didn't trigger the arab spring, and the notion that somehow the u.s. was in a position to pull the strings on a country that is the largest in the arab world i think is

mistaken. what is true is that at the point at which the choice becomes mowing down millions of people or trying to find some transition, we believed and i would still argue that it was more sensible for us to find a peaceful transition to the egyptian situation. with respect to libya, libya is sort of an alternative version of syria in some ways because by the time the international coalition interceded in syria, chaos had already broken out. you already had the makings of a civil war. you had a dictator who was threatening and was in a position to carry out the wholesale slaughter of large numbers of people, and we worked

under u.n. mandate with a coalition of folks in order to try to avert a big humanitarian catastrophe that would not have been good for us. those who now argue in retrospect we should have left gadhafi in there seem to forget that he had already lost legitimacy and control of his country, and we could have instead of what we have in libya now, we could have had another syria in libya now. the problem with libya was the fact that there was a failure on the part of the entire international community and i think that the united states has some accountability for not moving swiftly enough and underestimating the need to rebuild government there quickly, and as a consequence you now have a very bad

situation. and as far as syria goes, i think it is entirely right and proper for the united states of america to speak out on behalf of its values, and when you have an authoritarian leader that is killing hundreds of thousands of his own people, the notion that we would just stand by and say nothing is contrary to who we are, and that does not serve our interests because at that point us being in collusion with that kind of governance would make us even more of a target for terrorist activity. [ inaudible question ] >> the reason that assad has been a problem in syria is

because that is a majority sunni country, and he had lost the space that he had early on to execute an inclusive transition, peaceful transition. he chose instead to slaughter people, and once that happened, the idea that a minority population there could somehow crush tens of millions of people who oppose him is not feasible. it's not plausible. even if you were being cold-eyed and hard-hearted about the human toll there, it just wouldn't happen, and as a consequence our view has been that you cannot bring peace to syria. you cannot get an end to the

civil war unless you have a government that is recognized as legitimate by a majority of that country. it will not happen, and this is the argument that i have had repeatedly with mr. putin. dating five years ago at which time his suggestion, as i gather some republicans are now suggesting, was assad is not so bad, let him just be as brutal and aggressive as he can but at least he'll keep order. i said, look, the problem is that the history of trying to keep order when a large majority of the country has turned against you is not good, and five years later i was right. so we now have an opportunity and john kerry is meeting as we speak with syria and turkey and iran and the gulf countries and other parties who are interested, we now have an

opportunity not to turn back the clock. it's going to be very difficult to completely overcome the devastation that's happened in syria already, but to find a political transition that maintains the syrian state, that recognizes a bunch of stakeholders inside of syria, and hopefully to initiate a ceasefire that won't be perfect but allows all the parties to turn on what should be our number one focus, and that is destroying daesh and it's allies in the region. and that is going to be a difficult process. it's going to be a painstaking process, but there is no shortcut to that. and that's not based on some idealism on my part. that's a hard-headed calculation about what's going to be required to get the job done. >> do you think that assad

though could remain in power a year from now? >> i think that assad is going to have to leave in order for the country to stop the bloodletting and for all the parties involved to be able to move forward in a nonsectarian way. he has lost legitimacy in the eyes of a large majority of the country. now, is there a way of us constructing a bridge creating a political transition that allows those who are allied with assad right now, allows the russians, allows the iranians to ensure that their equities are respected, that minorities like the alawites are not crushed or retribution is not the order of the day, i think that's going to be very important as well. and that's what makes this so

difficult. sadly, had assad made a decision earlier that he was not more important personally than his entire country, that kind of political transition would have been much easier. it's a lot harder now, but john kerry has been doing some excellent work in moving that process forward, and i do think that you've seen from the russians a recognition that after a couple of months, they're not really moving the needle that much despite a sizable deployment inside of syria. and, of course, that's what i suggested would happen because there's only so much bombing you can do when an entire country is outraged and believes that its ruler doesn't represent them. cheryl. >> thank you, mr. president.

i'd like to ask you about the surprise in congress. specifically what are your top legislative priorities for next year and how has the new speaker, paul ryan, changed the dynamic with you and capitol hill? and can you be more ambitious next year doing things like maybe completing the transatlantic trade partnership or even getting tax reform? >> first of all, it's important to give some credit where credit is due. john boehner did a favor to all of us, including now speaker ryan, by working with us to agree on a top line budget framework. that was the basis for the subsequent negotiations. he was able to do that because he was going out the door and was then given i think a little more room to maneuver than he

previously had. having said that, i also want to give speaker ryan credit. i called both he and mitch mcconnell as well as nancy pelosi and harry reid for the orderly way in which they actually negotiated a budget, the way congress has historically and typically supposed to work. we've gotten kind of used to last-minute crises and shutdown threats and so forth, and this is a messy process that doesn't satisfy everybody completely, but it's more typical of american democracy, and i think that speaker ryan deserves a role in that. i will say that in his interactions with me, he has been professional. he has reached out to tell me what he can do and what he cannot do. i think it's a good working relationship. we recognize that we disagree on

a whole bunch of other stuff and have fundamentally different visions for where we want to move the country, but perhaps because even before he was elected he had worked on capitol hill, i think he is respectful of the process and respectful of how legislation works. so kudos to him as well as all the leaders and appropriators who were involved in this process. now, just want to repeat because sometimes we take for granted what's happened. i said early on in this process that i wasn't going to sign a budget that did not relieve sequester, this artificial austerity that was making it difficult for us to invest in things like education and our military, and i said i would not accept a lot of ideological

riders that were attached to a big budget deal, and we met our goals, and because of some terrific negotiations by the democrats up on capitol hill and i think some pretty good work by our legislative staffs here, we're going to be able to fund environmental protection. we're going to be able to make sure that we're investing in things like early childhood education and making college more affordable. wire going to be able to implement the clean power plant rule. we're going to be able to continue to invest in clean energy that spurs on innovation. we're going to be able to make sure that our military gets the equipment and the training that it needs in order to be effective in fighting isil and other threats around the world. so it was a good win, and

there's some things in there that i don't like, but that's the nature of legislation and compromise, and i think the system worked. that gives me some optimism that next year on a narrow set of issues we can get some more work done. now, as david said, it's an election year, and obviously a lot of the legislative process is going to be skewed by people looking over their shoulders worrying about primaries, trying to position themselves relative to the presidential candidates. so that makes it harder, but i think there are going to be a handful of areas where we can make real progress. one of them we already mentioned. transpacific partnership, which now has been out, congress has had a chance to review, and tr

mee it meets the bar that i set. it does what i promised, the most progressive trade deal in history that eliminates almost every tariff in american manufacturing goods in countries that up until this point had charged a tax essentially on anything that american workers and american businesses sell in these areas. it brings those taxes down to zero on basically all of american manufactured products. a huge win for agricultural because now, you know, the people of japan are going to be in a better position to enjoy american beef and american pork, which up until this point even though we're much more efficient producers than tagged with a tax that makes all products uncompetitive in japanese markets. this is a big deal, and i think speaker ryan would like to try to get it done, and both

proponents and opponents of this in both democratic and republican parties, so it's going to be an interesting situation where we're going to have to stitch together the same kind of bipartisan effort in order for us to get it done. a second area that i think is possible is criminal justice reform. there has been sincere, serious negotiations and efforts by democrats and republicans to create a criminal justice system that is more fair, more even-handed, more proportionate and is smarter about how we reduce crime, and i have really been impressed by the dedication of a core group of democrats and republicans. some of them -- the most liberal democrats and the most conservative republicans coming together saying this is the

right thing to do. we got a good bill in the senate that passed with bipartisan support out of committee. my hope is that that gets to the floor and that we can pair it up with a good bill out of the house and then this is an area where you potentially can see -- save money, reduce recidivism, you know, make sure that people who make a mistake on nonviolent crimes have to pay the price, have to serve time but are released in a reasonable fashion, that they have more support so they're less likely to go back into the criminal system subsequently, and that's an area that i think we may be able to make a big difference. so those are just two examples. we'll keep on looking for a number of examples like that and wherever there's an opportunity i'm going to take it.

>> thank you, mr. president. you mentioned climate change and at the time of the signing of the deal in paris you said it was potentially a turning point for the world. so this was a deal that was -- but it's not a legally binding document and you bypassed congress pretty much completely. are you worried at this point that a republican president who might take over from you in the white house could stop the deal in its tracks entirely and considering that possibility, are you more interested in campaigning for a democratic nominee considering that danger? >> i think it's fair i was going to be campaigning for a democratic nominee even without that danger, and i am very confident that we're going to have a terrific democratic nominee, and -- whose phone is that, guys? come on now. you recognize your ring. don't be embarrassed. just turn it off. there you go. okay.

can i still hear it? i think it's off now. i think we will have a strong democratic dom ni. i think that democratic nominee will win. i think i will have a democratic successor and i will campaign very hard to make that happen for a whole variety of reasons, because they're far more likely to share my fundamental vision about where america should go. but having said that, what i think people should also feel good about is that the agreement struck in paris, although not legally binding when it comes to the targets that have been set, does create this architecture in which all around the world countries are saying this is where we're going. we're going to be chasing after this clean energy future. this is how we're going to meet our goals. we're going to double down on

solar power. we're going to double down on wind power. we're going to invest more heavily in biofuels. we're going to figure out battery technologies. and what you saw in this budget, which i think was really significant, was an extension of the solar tax credits and wind tax credits that we had helped to really boost early on in my administration and that it was altered in wind power increasing threefold, solar power increasing by 20-fold. those tax credits are now going to be extended for five to seven years, and as a consequence that combination of market signals means that the private sector is going to start investing much more heavily. they know this is coming, and it's not just coming here. it's coming around the world. you now have a global

marketplace for clean energy that is stable and accelerating over the course of the next decade. that then creates a different dynamic that is independent of what congress does but also helps to shape what congress does because the more people that are now getting jobs in solar installation and production, the more that you have companies who are seeing how american innovation can sell products in clean energy all across the asia-pacific and in europe and in africa. suddenly there's a big monetary incentive to get this right, and that's been the history of environmental progress in this country and now we've exported it around the world. every time we've made a decision, you know what, we're

going to have clean air. the predictions were everything would fall apart, and lo and behold, turns out that american innovation makes getting clean air a lot less expensive than people expected and it happens a lot faster than expected. when we made a decision that we were going to double fuel efficiency standards on cars. and they say this is going to ruin the american auto industry, the american auto industry has been booming over the last couple years. acid rain. when george h.w. bush instituted a system to charge for the emissions that were causing acid rain, everybody said, you can't do that, that's going to ruin business, and it turned out it was smoother, faster, quicker, better, and acid rain, folks who were born -- some of you reporters are getting younger while i'm getting older. you may not remember it but that was a big deal. most folks don't even remember it anymore because it got

solved. and there's no reason why the same won't happen here. now, do i think that there's going to be a lot of noise and campaigning next year about how we're going to stop paris in its tracks. there will probably be a lot of noise like that. do i actually think that two years from now, three years from now even the republican members of congress are going to look at it and say that's a smart thing to do? i don't think they will. keep in mind that right now the american republican party is the only major party that i can think of in the advanced world that effectively denies climate change. it's an outlier. many of the key signatories to this deal, the architects of this deal, come from center right governments. even the far right parties in

many of these countries, and they may not like immigrants, for example, but they admit, yeah, the science tells us we have to do something about climate change. so my sense is that, you know, this is something that may be an advantage in terms of short-term politics in the republican primary. it's not something that is going to be a winner for republicans long term. >> you mentioned american leadership. is it embarrassing to you that the other parties -- party denies clay mat change? >> no, because, first of all, i'm not a member of that party. second, it didn't stop us from being the key leader in getting this done. i mean, this is something i have been working on now for five, six years. when i went to copenhagen, i essentially engaged in 24 hours

of diplomacy to salvage from a pretty chaotic process the basic principle that all countries had to participate. we couldn't have a division between developed countries and developing countries when it came to solving this problem. that was the initial foundation for us then working with other countries, culminating in the joint announcement with china, bringing in india, bringing in brazil and the other big emerging countries, working with the europeans and getting this done. this would not have happened without american leadership, and by the way, the same is true for the iran nuclear deal. the same is true for the transpacific partnership. the same is true for stamping out ebola, something you guys may recall from last year which was the potential end of the world. at each juncture what we've said

is that american strength and american exceptionalism is not just a matter of us bombing convening, setting the agenda, engaging in painstaking diplomacy, leading by example, and sometimes the results don't come overnight. they don't come the following day, but they come. and this year what you really saw was that same persistent leadership on many initiatives that i began when i first came into office. all right. i've got april ryan. >> mr. president.

i want to ask you something about criminal justice. your administration contends the united states is 5% of the world populati populati population and 25% of the world jail population. what legislation are supporting to cut mass incarceration in this country? does assad have to go with isis? >> we're going to defeat isis, and we're going to do by systemically squeezing them, cutting off their supply lines, taking out their leadership, taking out their forces, taking out their infrastructure. we're going to do so in partnership with forces on the ground that need our training, but we're seeing steadily progress in many of these areas.

and so they're going to be on the run. now, they're going to continue to be dangerous. let me just be very clear because whenever i say that we have made progress in squeezing the territory that they control or made real inroads against them, what people will say is if something happens around the world, that must not be true. but in any battle, any fight, even as you make progress, there's still dangers involved. isil's capacity both to infiltrate western countries with people who've traveled to syria or traveled to iraq and the savviness of our social media, their ability to recruit disaffected individuals who may

be french or british or u.s. citizens will continue to make them dangerous for quite sometime, but we will systemically go after them. now, in order for us to stamp them out thoroughly, we have to eliminate lawless areas in which they cannot still roam. so we can disable them. we can dismantle much of their infrastructure, greatly reduce the threat that they pose to the united states, our allies, and our neighbors, but in the same way that al qaeda is pinned down and has much more difficulty carrying out any significant attacks because of how we've systemically dismantled them, they still pose a threat. there are still operatives that are interested in carrying out terrorist attacks because they

still operate inne areas betwee pakistan and afghanistan or more prominently right now in yemen that are hard to reach. our long-term goal has to be able to stabilize these areas so they don't have any safe haven. in order for us to do that in syria, there has to be an end to the civil war and there has to be an actual government that has a police structure in these areas that currently aren't governed. it is my firm belief and the experts in this administration so long as assad is there, we cannot achieve that kind of stability inside of syria. i think the history over the last several years indicates as much, so that's going to

continue to be a top priority for us moving aggressively on the military track and not letting isil take a breath and pounding away at them with our special forces and our air strikes and the training and advising of partners who can go after them. but we also have to keep very aggressive on this diplomatic track in order for us to bring countries together. all right. on criminal justice reform, i answered the question. i'm hopeful. april, what i said was i strongly support the senate legislation that's already been put forward. i'm hopeful that the house can come up with legislation that follows the same principles, which is to make sure that we're doing sentencing reform, but we're also doing a better job in

terms of reducing recidivism and providing support for ex-offenders. i'm optimistic we'll be able to make a difference. april, when you use the term mass incarceration, statistically the overwhelming majority of people who are incarcerated are in state prisons and state facilities or going to be a large population of individuals that are incarcerated even for non-violent drug crimes because this a trend that started in the late 80s and 90s and accelerated at the state levels. but if we can show at the federal level that we can be

smart on crime, more cost effective, more just, more proportiona proportionate, then we can set a trend for other states to follow as well. and that's our hope. this is not going to be something that's reversed overnight. so just to go back to my general principle, april, it took 20 years for us to get to the point we are now. and it'll be 20 years probably before we reverse some of these major trends. okay, everybody. i've got to get to "star wars." thank you. thank you, guys. appreciate you. thank you. >> and we've been listening to president obama during his year end press conference making the joke he's got to run because he's got to catch "star wars". let's get to john harwood for some of the highlights of this wide ranging news conference. john?

>> reporter: the president recapped accomplishments for the past year. next year he mentioned potential criminal justice reform. that's what he closed on before running off to see that new "star wars" movie. he talked about getting the transpacific partnership passed and his relationship with the new house speaker paul ryan, which he said was a very professional relationship, a very good relationship. this is something the white house is optimistic about. hard to tell from their point of view whether or not there's a lasting change in the house's operations because the makeup of the house is the same, but they seem to think at least for now paul ryan is easier to deal with than john boehner. aside from that as expected, the president defended his approach to syria, his approach to isil. he said -- and this is something that on social media was drawing a lot of quick sarcastic rebuttals on the right -- said i

was right about syria five years later and is pursuing an approach that does not involve ground troops. he said there's only so much bombing that you can do. he talked about a process politically to transition away in bashar al assad coupled with the effort -- what he called squeezing systemically against the funding and resources of isis as well as hitting military targets. >> all right. john harwood, thanks a lot for that wrap up of president obama's year end news conference. we have been watching the markets. it looked like we were trying to pair our losses while the president was speaking. we're down 1.25% on the s&p 500. >> sort of back where we were just before the president started talking. at some points the dow was down 220, 240 now.

flirting with a 300 point loss. but i would call this a rather stable selloff at this point. interesting to note is that exxon mobile is now the number one performer in the dow 30. at last night, it had turned positive. >> it is positive right now. >> that will wrap it for this hour edition. >> have a good weekend, tyler. closing bell is up next. thank you. welcome to "the closing bell." >> hope you're feeling better, kelly. stocks selling off raise the second consecutive day. the culprit is not just oil. we'll talk about what's going on. we'll set you up for the week ahead as well. >> naughty and nice. we have a special report on this