hi, everybody, welcome to the "closing bell." i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. stocks are higher, but barrel right now. we are well off the highs of the session, up 150 points on the dow in the early part of the day, then we were negative briefly, now we are trying to move higher. oil, lower oil prices keeping pressure on the energy sector once again today. coming up we will hear from one analyst who nailed this oil call earlier in the year, last august, he said this is where we would see oil and gasoline

prices right now. we will ask him where he sees it going into the future now. >> not even the force and blockbuster "star wars" numbers can save disney stock today. we will take a look at what might be wrong mere and whether fears about espn subscribers are justified or overblown. walmart has been the ultimate dog of the dow this year, down more than 30% year to date. coming up we have a bull and a bear, they will debate whether walmart could be the ultimate turn around story in the dow for 2016. let's start with oil and natural gas which is making big moves, too, not enough to make the energy sector green, jackie deangelis has the latest. >> good afternoon. a volatile session for oil prices under pressure for most of the day. january wti hitting a low of 33.98 before it settled a penny higher at 34.74. february is now the front month and brent hit an 11 year low and

the spread between the two is roughly about 40 cents, that's because of this conversation that there is potential to lift the export brand, that make wti more competitive in the global marketplace, you see that coming through in pricing. the exciting piece of this is that gas prices continue to go lower, aaa reporting the national average for a gallon of regular has fallen under $2 in two-thirds of the states we are under that critical mark and it's interesting because people are hitting the roads, we have warm weather and more incentive for them to do so. aaa says more than 91 million americans are likely to drive 50 miles or more. that the gas prices saw an 8% rally, but we are coming off of almost 15-year lows. that's because people are looking at the weather temperatures, mild this week but by january this colder weather does have to come and demand will have to boost. back to you. >> i was reading this morning that the average savings for a typical driver in this country because of the gasoline decline this year has been $550 per

driver. >> $550 per driver and more than $115 billion total. that money has to be going somewhere, guys, not necessarily evidence that it's going into the retail sector but it's got to be going somewhere. >> 600 bucks a household they will save on their beating bills as well. a lot to fok for in. >> it's a great country as they say. >> thank you, jackie. >> jackie deangelis. back in august andy lipau wrote a piece for cnbc.com and made a call on the price of oil and gas. he wrote i think the market will make a with run at 34 bucks a barrel by march 2016, $20 by the end of the year is a real possibility. >> we hit both of those, wti crude dipping below $34, the national gas price just below $2 per gallon. let's bring in andy, you are only as good as your last call. >> that's right.

>> i mean, is it just a matter that we've got too much supply out there? >> that's exactly right. and i think the bleakest part still ahead of us in the first quarter of next year and we're going to expect iranian oil to return to the market, we might see libyan oil come on to the market, another refinery turn around season and we are oversupplied over the next few months. >> how would you -- what do you expect, andy, happens from here, especially now that you have seen this price action, do you think we're going lower yet? >> well, i think that the market is going to target $32.50 which is the lows we saw back in 2008, 2009, but i do think that we are going to see a slow increase as we go through 2016. >> and, you know, jackie was mentioning the distinct possibility that they lift the export ban. what would that do to the price of wti specifically do you think? >> the export ban has been lifted because that legislation

has been signed. now, since jackie mentioned the brent and wti and factor in parody in march we have this interesting dynamic that we're going to import more oil into the east coast while at the same time we may export some more oil out of the gulf coast, but actually the biggest impact is going to be on the west coast because we can now export unget ertd alaska north flow crude oil on foreign tankers to asia, that's very competitive. >> that's true. i also wonder when we come back and look at a lot of energy and production space here they have hedges and expectations that the oil price will rebound. if that doesn't happen with each successive month we stay in this area what do you think that means for a lot of these companies in particular, but also, for example, high yield credit markets? >> well, the hedges have rolled off so the companies are no longer insulated. that is the producers. what we're going to see i think is them start doing some drilling, but they won't complete the wells, the banks are going to cut credit off to them and we are going to see a

pretty good decline in the rig counts as well as production as we go through next year, probably more than the market expects. for high yield i think it remains under pressure because simply we're going to see more bankruptcies and consolidation on the producer side. >> we will see if that supports the price per barrel at least. for now thank you so much. >> thanks, andy. >> joining us now in our "closing bell" exchange for this monday nancy tangler, jonathan corpina and john brady joins us from rj o'brien in chicago. john, what do you say? we got a bit of a snap back rally after the declines of last week but they didn't hold. what's going on today? >> pretty significant moves we had in the market friday, there was a lot of activity, a lot of participation, yes, there was a rebalance and a quad witch but i think a lot of investors big and small closed their books on friday. the market is somewhat naked

today. we're seeing the true -- the true sentiment of the market and what can this market do without any echo data to support it or put pressure on it. >> this morning we opened up higher and little by little we have been giving that all back. there is not a lot of participation today in our market. overall sentiment now has been pretty big weight has been put on it as we get toward the end of the year. we will have more eco data this week, but it is a short week, only seven more trading sessions this year. investors big and small have closed down their books and are looking forward to 2016. >> john brady, how much of the choppiness in the last couple sessions do you trace back to the fed's decision to raise rates wednesday? >> i think a good amount of it is. last week should have been a great week for bank stocks, the pkx index, specifically because banks are starved for net interest margin and that hike by the fed should have fed down to the bottom line for banks and

perhaps been redistributed to shareholders in the form of dividends in q1. that may not happen now. >> why? >> for investors we would wash watch -- well, we think that banks are challenged in the regulatory environment and challenged by the supply environment. specifically between now and december 31st, kelly, banks still have leveraged loans specific to the energy sector that they need to get off their books. stress will probably continue unfortunately for the next two weeks. >> meantime, nancy, looking ahead you are not looking at the u.s. you are looking at asia right now, you think that's where the growth opportunities are for 2016. >> >> i'm focused on the u.s. >> really? >> yeah. domestically large cap dividend pairs i still believe that management at those companies set dividend based on what they think long-term sustainable earnings power is for the flattening yield curve, we're interested in stocks like apple, 3m, amgen that have generated

high double digit three-year dividend growth and are still yielding at or above the market, free cash flow, good management team. we think this is an opportunity and we're telling our clients to get used to volatility. >> what do you think will happen to those dividend pairs as the fed raises rates, though? >> that is always a question and has been and historically i think i've said this to you before, i've been doing this for 30-plus years, not necessarily so strongly correlated, particularly when you are a getting growth in earnings. i'm not talking about the highest yield, there's electric utilities, i'm talking about stocks that are growing their dividends in anticipation of future earnings growth and are still generating significant earnings growth. all three of those stocks are trading at a pretty decent multiple and we think it's an attractive time to be picking away at them. >> what about in the energy space, nancy? >> you know, i'm probably a little bit early, i think it's time to start looking at some of the large integrated oils. so, you know, exxon, chevron,

nothing terribly interesting, but they have -- are committed to their dividends and i've been through this three or four times with the oil cycles and the management that maintain the dividends continue to pay them and grow them in the face of short-term oil movement. i do think that the lifting of the ban will at the margin -- i'm sorry lifting of the oil export ban will give opportunity to investors. >> john, typically these last two weeks we see strength in the market, it's the old santa claus rally, will we see this time around? >> i don't think so. history is not going to repeat itself. this is a new environment we are in. clearly what we went through last week with the fed and interest rates, people are taken back a little bit about how this market is going to overall react to it. so i think the rally that we normally see at the end of the year is not going to happen this year. >> all right. folks, thank you all. appreciate your thoughts on today's market action. have a good day. we have a news alert, more

now on chipotle. dom chu has details. or is it about chipotle? >> here is what it is. all right. so the cdc has put out a new statement with regard to what's happening with chipotle and the multi-state outbreaks of the certain strain of e. coli linked to chipotle. what they are saying is that there is a more recent break of a different rare type of dna fingerprint toxin producing e. coli of a certain strain that has now been investigated by the cdc. this is being linked to five ill people that have been identified, one in kansas, one in north dakota and three in oklahoma. so this is, again, investigating the cdc investigating a more recent outbreak of a different type of e. coli strain. it is from what they can tell right now not related to the larger outbreak from a few weeks back. so it's not being counted as part of that same outbreak. they also say, again, that the illnesses started on dates ranging from november 18th,

2015, to november 26th, 2015, in all five cases they did report eating at a chipotle mexican grill in the week before the illness started. again, the cdc is investigating a smaller outbreak, five people this time, in a new type of e. coli, this time it's targeted people, one in kansas, one in north dakota and three in oklahoma. this is at least for right now not being included in the case count for the previous larger outbreak because it is of a different strain. all five cases of the new one did report eating at a chipotle in the week before the illness started raining from november 18th to november 26th. so that's what we know for right now, guys. we will bring you more. we have reached out to chipotle for a statement, they have not gotten back to us yet, but as soon as they do we will come on air and let you guys know what chipotle has to say about this new cd report, guys. >> those shares currently down about 3%. let's get a little bit more,

we're joined by phone by jack moore. jack, what's your view on chipotle shares before this and now hearing the news? >> i came on the show before this and was saying that the incremental headline news is going to hurt the stock, that's no question. until they find a source this is a real issue. i'm actually surprised shares can't broken down through the 500 level after this incremental announcement. the fact that it's a new e. coli strain, while vague, we don't know whether, you know, the severity of it is more or less than the previous ones, it's concerning, and i think that this is going to weigh on the shares for at least certainly the near term, it's going to weigh on comps for the next three, four quarters. i don't think there is any question about that. i think long-term this is a buy, but i think management has to get to the root of this. it's all about finding the source and until they kind the source this symptom really

doesn't have much of a bottom. >> isn't it just confounding? i'm sure they are as confounded as everybody else at chipotle but that they aren't able to pinpoint not only the source, but just which ingredient is causing this right now, huh? >> yeah, i think that is confounding and when you look at it there are a lot of things that, you know, a lot of hands that are changed and a lot of the supply chain is longer than many people kind of realize. now, it would be very rare for it to come from a protein and a lot of the cases have come from veg tearians. so it's likely a vegetable-type source and that's kind of what a lot of experts have been saying. >> yeah. >> now, i think that management they can't make -- i'm sure they have more information than we realize, but they are not going to come out with a, you know, comprehensive statement and analysis until they have absolute certainty because they can't come back again and

backtrack. >> absolutely. thank you for now. jack mohr from street.com. >> we're joined by sharon zach who has a buy rating on chipotle stock, by the way. is this going to get you to rethink that? what are you making of this new development today? >> depending on perspective, we have five new cases that reported eating at two crest rants, so the north dakota incident is from traveling to kansas and eating is a resident, all of the oklahoma cases came from the same restaurant in oklahoma. so two locations out of over 1,900 for chipotle seem to be having issues maybe with five new illnesses. that's not going to make me rethink the buy rating on the stock. i think chipotle is putting into place some of the best food safety protocol that exists in the restaurant industry, but it is going to take some time. they're moving to high resolution testing, mic robe testing for tomatoes, lettuce, cilantro. it's probably produce, and the

reason why it's hard to actually pinpoint the cause is because chipotle turns over that produce so quickly, by the time that people are getting ill and reporting it that produce has been all consumed and is out. >> it can be as much as, i guess, two or three weeks after they've eaten it. sharon, you are playing this down here saying it's just two places out of 1,900. is it the case that cdc every day is coming out with e. coli outbreaks from other restaurants that we are ignoring because it's not chipotle? if that's not the case this seems pretty alarming. >> to put it into perspective there are hundreds of thousands of cases of e. coli reported in the u.s. every year. i mean, it's clearly unfortunate that we have around 50 that have been linked to chipotle, but it's out of hundreds of thousands of cases, it's not chipotle specific. >> tell that to those five cases that have just been announced here, i'm not trying to be flippant about that by any means, but don't you think -- do you think that chipotle is doing enough to try and get to the

bottom of this right now? >> i think they're doing everything realistically that they can. again, given the lag between when the illness is contracted and when the symptoms arise and how quickly they churn over their produce, it may be impossible to actually link it to a specific item. i mean, that might just be the truth of the matter. i think that's part of the reason why their new food safety protocol that they will be implementing and started to implement goes above and beyond anything that you might expect. i think they would love, by the way, to know it's cilantro or to be able to identify it because then you could close the case. >> right. >> that doesn't seem like it's going to be likely. >> sharon, when do you expect their sales to return to poll testify territory, their comps? >> realistically probably the back half of next year. it will take some time for this to fade in consumers' memories. >> sharon, thanks very much. >> she has a buy rating on the stock. keeping an eye on chipotle shares, down about 3% and this

market, too, is drifting a little lower. dow is only up 17 points, s&p up about 3, nasdaq about 12. >> up next, the force may be with disney when it comes to the new "star wars" movie but it could be a different story for disney's espn. a shareholder and streaming video veteran weigh in on the biggest challenges facing the mouse house coming up in a little bit. add or delete, josh lipton has a special report on tech stocks that could be hot or not next year. you're watching cnbc, first in business worldwide.

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stock from a buy to a hold and raising its price target to $100 from $88. you see it's at $74 right now, the firm citing, quote, a rare opportunity to get a high quality company at a discount. yelp is lower, the review site and restaurant reservation service open table quietly ended their partnership agreement that started five years ago. open table which was acquired by price line last year paid yelp for referrals. open table has expanded its review section, yelp bought res spray company seat me two years ago. you got that, kell? >> i was going to say -- meanwhile, disney, "star wars," the for awakeness raking in more than a half a millions open weekend, the stock took a dip over continued concerns over espn's place. >> if you had a choice of having espn or not having espn do you

think more than half the households in the u.s. would say i have to have it this? i think there's 30, 40 million ridiculously crazy sports fans but would you pay for espn for the entire year? you can subscribe just before football season. there is a continuity risk. >> let's talk about this. joining us is rich tull ochlo a larry haley is also with us today. rich, are you as concerned -- in other words, the concerns about like an espn outweigh the benefits of what they're getting from "star wars" right now? >> no, for a couple different reasons. first, i think what rich dramatically fails to appreciate is that, yes, maybe fewer people would subscribe to espn if it was unbundled, but they pay dramatically more. so an avid sports fan they pay, 8, 9, 10, $12 versus $6. second point, the proportion of

revenues that disney has been deriving from its cable nets, including espn, has been declining relative to the studios. let's say worst-case scenario, which is not on the table, espn and the cable nets go down 3% this year, they will be more than offset by growth at the studios which should be up between 1.5 and $2 billion owning to "star wars" and other films. >> that said, larry, are you about prospects for sechlt spn, if they would be able to make more money on the ones they retain? >> i think it's a slow burn, kelly, and you go to the media conference, every advertiser says that the primary advertising vehicle on television is live sports. so it's not going to go away at any time. and then new year's eve you will get a new catalyst when the bowl games are done on espn. most consumers are not rational, they're lethargic, espn will be

just fine. i think meanwhile, though, the market is just vastly underestimating what "star wars" means. >> larry -- >> i still believe -- >> before we go back to "star wars" let me ask you what you just said about live sports to espn. realistically how much of espn's business is live sports going to be going forward and as live sports gets more valuable cbs a advertisings like crazy for super bowl 50, isn't the cost and bidding for that going to escalate? >> i think, kelly, the only issue at stake in the near term is the thursday nfl contract. espn's contracts are locked for several years, i think at least -- at least six on average that's probably on the -- on the low end and, you know, espn is a network and only a few things are viewed frequently as sports center gets a wide birth of audience, the sports get the

audience, but the kicker here is the live sports. espn has a fabulous collection of live sports rights that are protected i think for almost anyone's reasonable investment universe. so i think at worse we get a slow burn here at worst. >> have you seen the movie yet? >> i haven't, bill, but i think there are a couple misunderstandings. the first is that the splits on this film for the producer are going to be very, very high in the first couple weeks so i think the film is probably paid for itself in two days. every dollar that comes in from now is going to be 50% to free cash flow and bob iger, tom stacks and christine the cfo will be using that free cash flow to buy stock. second, as the film opens in china on january 9th and nobody is focusing on this, china is a partner with disney in the park which opens in the spring. so as a consequence with the

chinese government as a partner it's going to do everything it can to protect the franchise and to generate cash flow. i think that means cracking down on fire's in china which would be a mountain of cash flow to the consumer products. the whole shooting match, bill, we are talking about a consumer brand here of unprecedented strength, "star wars," that's high multiple stuff. >> got it. >> after this quarter disney will be selling at ten times cash flow. you have to pay, 40, 50, 60% more cash flow to buy a unit of profitability in coca-cola or mcdonald's. disney is a gift right here if you take your eye off this espn controversy. >> thank you, larry. larry hafferty there along with rich tullo talking about the cost benefit of espn and "star wars." let me just say for the record, pardon the interruption. chipotle responding to the latest fear about e. coli now. >> we have a statement from a chipotle spokesperson now wrrd to this latest cdc report.

chipotle says, quote, we have indicated before that we expected that we may see additional cases stemming from this and cdc is now reporting some additional cases. they also go on to say, since this issue began we have completed a pre hence i have review and reassessment of our food safety practices. we are in the process of implementing those programs. also that with all of these programs in place we are confident that we can achieve a level of food safety risk that is near zero and of course they then go on to say that additional information about enhancement is available on our website. chipotle saying that they've indicated that they were expect to go see this before, they have now seen it, they are in the process of implementing new procedures, they think that with these programs in place that they can achieve a zero level of food safety risk. again, that's chipotle's response to this current cdc report. bill, kelly, back over to you guys. >> all right. dominic, thank you. >> thank you. crazy story. >> we are heading to the close.

we have 30 minutes -- a little over 30 minutes left. the dow up 18 points after a pretty good rally this morning that just failed after a couple of hours. >> we're turning the page, though. up next josh lipton has the 2016 playbook for tech stocks. find out what the new year could hold for this once red hot space. ♪ now more than ever america's electricity comes from cleaner- burning natural gas. and no one produces more of it than exxonmobil. helping dramatically reduce u.s. emissions. because turning on the lights... isn't as simple as just flipping a switch. energy lives here.

cnbc is breaking out the 2016 playbook looking at ways that you may be able to make money next year. josh lipton lays out his predictions for tech in just a moment, let's see how he fared for his picks for this year. josh predicted the crowded wearables space would get smaller thanks to consolidation. he was right there. with intel buying rykon instruments and fossil acquiring miss fit. he also said gopro would get into drones. he was right again with the gopro karma getting set to launch next year. he also predicted we would see more problems for tablets with the ipad being the lone exception. he was half right there. tablet sales continue to suffer but not even apple has been immune to that trend. >> all right. what's josh predicting for 2016? take a look. >> first, tim cook is proven

right. apple stock has gone basically nowhere this year as analysts have become increasingly skeptical about future iphone sales growth. prediction, apple will surprise the street and grow iphone units, boosted by a powerful upgrade cycle and lots of new fans in china. second, alphabet keeps marching higher, the company formerly known as google skyrocketed this year and in 2016 those gains will continue. in january alphabet breaks out performance at its core business giving investors a better idea of how search, apps and maps are performing. and the bulls are right, investors will like what they see and pile in. third, yahoo gets sold. yahoo has to spend the spin of its stakes in alibaba instead focusing on a spin of yahoo core and yahoo japan.

in 2016 yahoo will sell its core internet assets but still attract a lot of eyeballs. analysts say that core business could fetch as much as $8 billio billion. >> now, the next question, guys, is when that sale could take place. the bet is when the first half of next year, you know, shareholders can't be feeling too patient and marissa mayer knows that that annual shareholder vote happens this summer so she likely would want to get ahead of what could be a potentially ugly proxy fight. back to you. >> not only when, but to whom. thank you, joshua. stuff to ponder for us. time for a cnbc news update. let's get eefr to sharon epperson. >> here is what's happening at this hour. a maryland judge ruling that baltimore officer william porter will face a retrial in june on charges of manslaughter related to the death of freddie gray. porter's first trial ended in a deadlocked jury.

sea world orlando officials say rescuers are working to remove guests from the sky tower after it stopped working. the tower is now coming down. officials were in constant communication with the passengers and all are safe. another wave of smog settling over beijing, many people wore masks as they went outside, the smog is largely blamed on coal burning power plants, industrial pollution, as well as the booming number of vehicles in the city. and swiss food giant nestle unveiling a gold wrapped kit kat bar in japan in a bid to lure holiday shoppers. 500 of the candy bars will go on sale with a price tag of $16. there are 30 different kit kat flavors in the country including sweet potato, green tea, soy sauce and even wasabi. that is my favorite candy bar, but i could not -- i don't know about wasabi. >> no kidding.

>> soy sauce. >> speaking of weird food things over there, apparently in gentlemjapan it is a christmas tradition to do kentucky fried chicken and chocolate cake. people order these fried chickens ahead of time and have to line up for hours if they didn't secure those. >> i like both, but not together. >> now we know what else is for dessert. a little more than half an hour to go here. stocks bouncing around, the dow is up 31 points, the s&p up 4 as we're keeping a very close eye on oil which is weaker again today, the nasdaq up 16. when we come back goldman sachs strategist katie cox will tell us how emerging markets could stack up spared to u.s. markets next year. stay tuned. pared to u.s. markets next year. stay tuned. cpared to u.s. markets next year. stay tuned. opared to u.s. markets next year. stay tuned. mpared to u.s. markets next year. stay tuned.

despite the rise in u.s. stocks the carnage goes on in emerging markets as commodity prices fall to record lows again. >> our chief international

correspondent michelle caruso-cabrera is here with more on the fallout. hey, am ishl. >> the latest country to cry uncle oil producer azarbashan. after the sent kral bank gave up on the fixed peg. take a look at the chart on the screen. in a world full of floating currencies you don't often these charts like this one. this is what it looks like when a formally fixed currency is allowed to float freely in one day. let's move on to another oil producer in trouble, brazil, the real weakened again today. investors seeming very unimpressed by the new finance minister who was named late on friday night. mr. barbosa promised vigorously over the weekend he will not allow the brazil i don't know deficit to balloon. investors in south africa do seem to believe their new

finance minister who also happening to be the old finance minister. he gave his first interview to the ft over the weekend promising to control spending and that stock market climbed by more than 1%, it's up 4% since he took over a week ago. back to you. >> thank you. our michelle caruso-cabrera. despite some of those hot spots in emerging markets our next guest is finding sweet spots outside the united states. >> she's katie koch. we're talking about japan and europe. is it as simple as theoriesing and we're tightening? is that what it's about -- >> that certainly helps as it relates to equity markets but it's bottom up what opportunities do you like? we're focused on european companies that are benefitting from spend domestically. examples would include auto companies, auto sales in europe were up 10%, we have ex poesh

tour to michelin tires, obviously something that benefits. >> what about emerging markets as we turn our attention there as michelle was just indicating there is a lot of concerns. do you guys see any opportunities? >> we think that there are tremendous opportunities in emerging markets. when people ask about emerging markets, how is it going to do it's kind of like asking what is the weather in the world going to be because there are so many different spots emerging around the world. consumer is a place we like in emerging markets. china is obviously getting a lot of negative press in terms of the growth rate but one thing we like in china is the export of chinese tourism to other parts of the world. you were asking about japan, japan is a big beneficiary of this. 100% increase in chinese tourism. >> they import all of their oil. >> yes. >> that's got to be a benefit with prices going down as well. >> this is a really important point because of course as you guys were talking about before a lot of pressure on commodities markets and in our diver side

portfolios we are underweight those sectors in general, including in emerging markets. however, there are beneficiaries to that and the global consumer is absolutely one of them, but discriminating is going to be very important because it's not just about getting long the consumer, it's about anticipating the change in spending patterns. >> all the things jim bianco put it nicely this morning i wonder if you agree when he said we're seeing a reverse tepper here, you know, back when the feds launched qe david tepper was saying the economy strength in stocks do well or it will weaker and they will do for qe and stocks will do well. is it creating a situation where it's hard for asset prices to do well? >> we think at goldman sachs asset management informed caution in general about equity markets is very important but a lot of abundance at the individual company level. this move was very well telegraphed and we still see a lot of opportunity at the individual company and stock level. >> all right. katie, good to see you. thank you. have a good holiday. >> you, too. >> katie koch of goldman sachs

asset management. we are heading to the close with about 17 minutes left in the trading session, the dow up 57 points. >> up next we're visiting the land of misfit stocks, dominic chu will look at whether they can recover come 2016.

welcome back. you blink and the dow is up 70 or now 64 points, the nasdaq 26. let's zero in on airline stocks, delta, united continental, jetblue all a little higher on the session, perhaps getting a lift as investors calculate lower fuel and transportation prices and maybe consumers spending a little extra money. jetblue the outperformer of the group up 3%. >> dom chu is our version of yukon cornelius now to take us to the land of misfit stocks, the worst performing stocks in the year's best performing second for. dom. >> you guys see rudolph over here. let's talk about the misfit stocks. the market has been marginally negative this time around. you can see consumer discretionary stocks overall have outpaced what's happening with the overall stock market,

outperforming by 10%. it en kpapss everything from the netflixes and amazons to some of these bricks and mortal retailers. some have been taking it really hard over the course of 2015 heading into 2016. take a look at gap stores, for instance, the parent company behind the name stake company, also what's happening with banana republic and old navy, those shares are lost 41% of their value, the question becomes whether or not they can put a turn around plan in place to get the stock moving back in the right direction. the old navy bargain brands have been outperforming. on the luxury side of things, michael kors a hot stock to start off its public life, michael kors down 46% year to date as there are concerns about that upper end part of the market, especially with the fashion accessories size of things. you have the place that sells a whole bunch of this stuff and that's macy's, macy's a bricks and more than retailer that's

been hit, down 47%, one of those retailers that's left behind, kelly, bill, the question becomes whether or not there are some buyers out there who feel as though that there's enough upside going into 2016. we'll see. these guys have a good amount of negative momentum behind them so far. >> thank you very much. bill, who do you think has benefited most from your holiday shopping? >> amazon. >> me, too. >> amazon. absolutely. >> by far. >> yeah. >> the new walmart. >> the boxes are piling up. jeff bezos needs to think about a recycling program for all those boxes. >> ten minutes to go here and the dow is edging ever higher, up 80 points. >> up next sam stovall explains why investors may need to get used to more volatility in the markets and joe zock has stock

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seven and a half minutes left. art cashin mentioned $700 million to sell, but highly concentrated in the financials today, so it may not affect the

overall market, the dow is up 83 points. sam stovall is with us and joe zock also joining us at post 9. you guys are long volatility for 2016, i guess. >> yeah, the feeling is that we're likely to see a pick up in volatility. i went back over 50 years and looked basically how many days did we have up or down volatility by 1% or more three months before the first fed increase, three months after. there was a 77% increase three months after on average. so, you know, if you think that things are volatile, just get ready. >> why do you, joe, things like names like syngenta should be attractive here? >> foreign stocks, international stocks should benefit from the rise in the dollar, the u.s. companies will be under pressure for the next couple of years if that maintains. we look at -- we're looking at a plus which is a spanish company,

it's in the -- it's been hurt by the decline in oil, but it's a solid company, syngenta was the beneficiary of talk about merger activity by dow or dupont. we look for bargains, unlike volatility we track earnings, look at balance sheets, do funneled amountel research and come up with these names. >> you do earnings, too. what are you looking for as we go into this first quarter? >> i'm looking for energy to continue to be the big drag and actually down about 60% year over year in the fourth quarter. talk away energy earnings are likely to be up 6.5%. going into the first quarter down 35, second quarter down 20. it's a stair step down but hopefully we will see a recovery in the fourth quarter. >> we were just looking at the ten sectors. it looks like oscar madison and felix younger are the two bottom, the odd couple. >> i was going to say are there

any names in the u.s. that you think are still attractive at these levels. >> we are looking at transportation stocks. contrary to a popular politician there is a flood of good services coming across the border, mexican border and it's been provided by southern -- >> kansas city southern. >> there you go. >> that railroad has been increasing its freight loads, it's an attractive place to be. "the new york times" this morning pointed out it is one of the few companies that could be acquired should another larger railroad want to make a move there. >> a few things to think about as we go into 2016. good to see you both. nice tie, by the way. up next we are coming up with the closing count down, pisani looking at today's wall. walmart kicks off our special series called turn around plays. you are watching cnbc first in business worldwide. but i keep it growing by making every dollar count.

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that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most. all right. coming up in the 90 second mark here, suddenly a rally under way, we're heading back maybe to the highs of the session, the dow opened higher this morning, up appreciably, then selling off and look at that, bob pisani, we're coming back again. quickly on oil, wti, brent hitting roughly ten-year lows today, around $34 on that contract. >> so it wasn't a big rally but it was a rally. we should have gotten one, after

all, the contract last week, the options business was done for, the quadruple witching, the fed was done. if you don't get a rally now something is wrong. two to one advancing declining stocks. if you look at the s&p 500 we sold off going into the european close, look at that 1130, the minute europe closed it was very heavy volume right up to that point, the minute volume closed the volume lightened up and the market lifted. this obviously suggests selling came largely out of europe, we have been essentially sideways since then. i would have liked to see a little more enthusiasm from the beaten up groups, this is the time of year you start picking on the most beaten up groups for the first part of the year, transports, for example, small caps. we didn't really see that. i wouldn't say this was an enthusiastic rally, down to one advancing declining stocks. given this environment the lower for longer theme we've been talking about, maybe that's the best we can expect. let's not look a gift horse in the mouth, we got 123 points on

the dow, i will take that over going up any day. >> see you later. we are going out with a pretty healthy gain, 123 points, the gang at consolation brands ringing the closing bell at the new york stock exchange. rob stans will be with bill cramer. here is hour two of the "closing bell" with kelly evans. welcome to the "closing bell." i'm kelly evans. another late day rally on wall street, the dow ending higher by 123 points as we go out here at the nearly three-quarters of 1%, the s&p 500 up 15 or so and the nasdaq adding 45. we were up at one point only 18 points during the hour. we have oil moving lower. a couple different things could talk about. we have our own mike santoli and cnbc contributor stephanie link and for more on today's market action "fast money" trader tim

seymour. mike, we saw a session point similar to this in the last week or two where it was bouncing around in the late hour, we closed up 120 points, how significant is it really? >> it's interesting because friday was very much like a week ago friday where you had this selling, percent and a half decline, people pretty bearish going into the weekend, monday comes, a weak bounce in the morning, it fizzled, people saying we should have closed down, i wish we opened down and then we closed on the high, i don't know if that means there is some pattern to it right now, it's been weak in the late morning, i don't know if that has to do with europe or not. it seems people will add to this approach as almost all news is a selling opportunity, but maybe that pattern is beginning to break. >> we had the head wind again of oil prices moving lower, energy was moving higher, brant off extreme lows and the two sectors which were weakest together were energy and utilities. >> i think oil prices were really a concern, another leg down, below the 2004 lows.

and i think that's really what's keeping a lid on our market. we want to see a little bit of stability or a little bit higher prices just to at least suggest demand has not fallen off a cliff. i think people are concerned a little bit about consumer sales because you are now starting to hear about how many discounts we're seeing, so i think if you've got any kind of color or clarity on either issue, the markets could rally, but expectations are really, really low, i wanted to call off emerson electric. so the numbers came out, three-month orders, trailing orders down 10% but yet they were able to reiterate guidance because the numbers have come down so much in the stock's bounce. i don't think it would take much for us to -- >> emerson was one of those beaten down industrial stocks that the street has turned negative on that we screened for not long ago. >> that's interesting, tim, this market still only a couple percentage points off its all time highs even though the year

might be a negative one. what we're hearing is expectations in some cases are quite low, but that overall we're still -- i think i read actually that the markets' multiple has expanded by a point this year. >> especially when you consider some of the names that are driving the market's performance. it's been a narrow breath for the last few months. you're seeing actually what's scary for most people looking at the market two-thirds or more of the stocks that really are making up parts of their portfolios are actually doing very poorly and yet we are very much near and close to the highs. so what i think as we look to 2016 the momentum stocks are the place that i would be most concerned about, these are names i think if everyone is right about where we're going with volatility, it's not less fed, it's more fed for 2016 and that means more volatility that means that trend following will be a difficult thing. i think what people are starting to roll up their sleeves and do this week in a quiet week is look at best of breed companies. those are the places that there is -- there is very little

conviction about 2016 that's really where you want to be and that's obviously up for debate what's best of breed, those are the places you want to be. >> mike, what would you say to that? you know, especially when people are starting to wonder what happened to the santa claus rally and what about that fed rate hike we just had. >> the santa claus rally is deposed to be an indicator. traditionally we get strength in the end of december, early january when we won't that's when you have to pick up and notice. maybe we have to see if that, in fact, does fail for the second december in a row. now, i don't think it means -- it's not decisive one way or the other, what i do think it means and i would be more nuanced about the idea of projecting more volatility, i think you could project winners and losers, it doesn't mean overall index volunteering tilt. as we saw this year a few things up a lot, more things down a fair bit and what do we have, a flat market. >> that's a great point, especially when a lot of investors are approaching this market through sector etfs, it's hard to figure out who the

winners or losers are going to be. >> it's a stock pickers market, it has been this year and i think it's going to be even more so next year. some of us are tempted to buy those ones that have been beaten up, michael put a great list together a couple weeks ago, but to tim's point i also want some best in precede, too. it's like taking a barbell approach because it hasn't really paid to be a bottom fisher this year. the value really has been stuck in value mode. it will be interesting to see for me if 2016 you finally see that rotation into valley from growth and that usually is the case when the fed is raising rates. >> where would we watch to see if that's happening? >> i tell you what, the financial sector is probably the right place, undisputedly they are cheap, if you look at price to book on the sector, some of the biggest of the big cap names, .9, 1 point, 1.1 price to book. financials have been laggard. they along with energy have been the place to i a vied in 2015. if you want to go reverse into the mean and i think there are a

km of about i go reverse into the mean trades that are not only financials and merge but emerging markets, commodities, i think these are places where a little bit of a turn obviously means a heroic rally in the underlying stock. so i think financials are really the place where you have both a lot of crossover investors, it's truly a tell on the cyclic kalt of the environment also the health of the credit markets, that's what i want to see rally, i think financials are need more than ever. >> let's turn to shares of chipotle which got whacked at the end of the session today on news of another outbreak of a different e. coli strain. the ceo was on mad money ensuring their food was safe. >> we visited the farm, the cdc was on a lot of the farms, we had our epidemiologist on farms and we could not pinpoint it to a certain location. i will say that we can assure you today that there is no e. coli in chipotle.

we have thoroughly tested our food, our surfaces and we have confident that chipotle is a safe place to eat. >> what does this latest outbreak mean for the fast casual chain. >> steven anderson joins us now. wuf a $495 price target on shares that are still over $500. what's your reaction to this afternoon from the cdc, the sense that there are more e. coli infections out there? >> our reaction to this is that this is a story that is not over yet, there's certainly -- we have more cases of not openly the new strain of e. coli but also the existing strain of e. coli, there was found to be another case in pennsylvania from the cdc report we got today. the bottom line is that we still do not know the origin of the original cdc outbreak and that was the second one on its heels, i think this creates more uncertainty and more down side risk in the near term. >> we spoke with an analyst last hour who has a buy rating on the shares even though she doesn't

think the comps will be positive until the end of next year, she said we're talking about a couple locations out of 1,900 stores when we have over 100,000 e. coli cases in the u.s. every year, is it possible that this is all being overblown relative to the affect it will have on chipotle? >> this that may well be the case but there is headline risk and people do pay attention to headlines and that's really going to affect traffic, not only sending of the traffic elsewhere but i do think others will benefit from chipotle's stumbles, looking at pan in a as beneficiaries of the chipotle. >> do you have a thought or question here? >> the public perception is probably more important than the reality facts. how about the fact is this a question of chipotle has grown too fast, that ultimately they cannot, you know, manage control over -- there cannot be quality control over their entire logistics chain. that to me is the concern.

maybe these are isolated events although it seems like more of a supplier issue. has chipotle gotten too big for its britches? is it time to see it pull back? >> i don't agree at this point too big. i think you are right about the supply chain issue and it's going to be much more testing of that supply chain. this does not come cheap or free for that matter. there will be additional costs and that's something we are looking at into 2016, 2017, that will affect margins and that will in our view knee great any advantage from declining protein prices. >> what would you like to see the company do from a pr standpoint? i thought the management did a good job on jim cramer's show. what would you like for them to do to gain confidence or maybe they don't do anything and they've just got to figure out how to fix this darn thing and move on. >> i think at this point management what they did on jim cramer's show as well as on the "today" show is a good start but they have to be active in front of the consumer and maybe get a

little promotional to try to get those consumers back in the stores and regain their trust. >> here is what chipotle had to say, we have indicated before we expect we may she additional cases stemming from this and cdc is reporting some additional ones. since this began we've completed a comprehensive reassessment of our food safety program with best practices for each of the inn fwreeds yents. we are confident we can achieve a level of food safety risk that is near zero. can they do that at this point? they've talked about coming to the fore front of food safety in the space, but, you know, how much of an issue has this been for other chains? >> i can say what they cannot do is blame the cdc as what they did at a recent consumer conference for their way of disseminating the facts. the facts are the facts and that's something that chipotle cannot fight. >> sure. although, again, they can still say they're going to spend a lot of money, research and development-wise to clean up their act. do you think that's going to cut it? >> that's the bare minimum that

they have to do but they have to do a whole lot more. i'd say blaming the messenger is not the way to do it. >> all right. we'll leave it there. steven anderson thank you for joining us. >> thank you. >> tim, would you be a buyer of chipotle? >> no, i think there's still so much uncertainty. i think -- the irony is the one that got away from mcdonald's chipotle was a total disrupt for for the entire sector. mcdonald's continues to be a place where the bar isn't even that high and the stock continues to perform. i would much rather be in mcd's. >> i've been there a bunch lately. i agree. >> do you eat the breakfast? >> yeah. >> you went for the breakfast. >> chicken chilly wrap thing very good. >> they've worked part on the breakfast. >> stick around to catch more coming up with tim seymour "fast money" at 5:00. dennis gartman what's got him changing his tune. walmart has been the worst performing dow stock. can they turn it around for 2016. "star wars" blasting box

office records although that's not helping disney stock today. coming up we will talk about how much money this film will end up raking in. what it means for disney's movie business now and in the future. you're watching cnbc first in business worldwide.

welcome back. shares of walmart doing a little better today, closing up about 1%. it's been a tough year. will 2016 be the year of the turn around? let's hear from liz dunn along with chad morganlander, both joining us at post 9. liz, we will start with you. you are a consultant, we're not asking you for a price target on walmart, but how do you think their prospects look for 2016. >> i think they're pretty difficult. obviously it's going to be a down year in terms of earnings and they just have to do so much investment and we are not really see the payoff. we've seen a little bit of an uptick in traffic but i don't think it's enough to move the needle. >> so wall street is repulsed by business investment but they have a high return on invested capital. we believe this is a smart move, it's priced into this stock and we see $2 of upside for every dollar of down side. now, let's take an example here. revenues are actually going to

be growing, that 1 to 4% for 2016. that's between 5 and $15 billion are going to be increasing their revenue line. we actually think that the stock is a good buy, blue chip stock, we know they stubbed their toe, they're down 30%, it's all in the name right now. >> it could be all in the name but it could be dead money for a while as an investor i like to see positive operating leverage. where you get those sales you also get the margin boost, as they're investing you are not going to get that margin boost, unfortunately. i guess for both of you when do you think you are going to see that pay back, i guess you're thinking shorter term and liz might be thinking longer term. >> i'm thinking longer term two, to three years you're going to see i think this is a great opportunity. yes, could there be margin pressure, obviously they've already announced that margins will be down about 100 basis points for 2016, that's priced into the stock. going into the second quarter, third quarter walmart if they

show a modicum of improvement could bode well for the equity. >> i think the visibility is low because we are looking at a two or three-year turn around and i think that while the investment is needed you're just not seeing the pay back in the near term. i also think that there might be some structural issues here as with you start to think about amazon and other low price players. >> we were talking about amazon, mike. >> i guess i would wonder one of the stories of the '90s behind walmart what made it one of the successful investments of that age was a strong dollar, they were sourcing everywhere else, it sealed like they were a perfect way to after ba tries that, but i think you need consumer pricing power or inflation here. is there any visibility i guess for either one of you toward having a little bit of pricing in their product mix. >> you first liz. >> absolutely not in terms of my perspective. i think we will continue to see them invest in delivering cheaper prices back to the consumer. they can pressure their suppliers somewhat and take

advantage of that. >> even if they're cheaper general inflation it could still come in under it. >> they have $500 billion of revenue, they have a negotiating power to actually squeeze out some margins there. yes, the amazon deflationary pressures will continue to ride the company a bit, but from a value investor's perspective this stock is cheap. >> are they going to close stores? at the end of the day they have these big boxes and no one is going to big boxes everyone is going on the online. i applaud they're investing in online but you have a lot of real estate. >> you have $500 billion of revenue and revenue expectations that are moving higher, yes, you're right, 100%, the online aspect has been horrendous, growth has been up year over year 10%. if they can get some traction there as an optimist i believe that would bode well again for the stock. >> i wonder how much of a tune are you talking about, what are going to be drivers for someone shopping at a walmart. you have positives, lower gas

prices that sort of thing, maybe an improving committee, you might have especially the call a lot of people have been making the shift from wall street to main street, are we at that point in the cycle? >> possibly, though it seems like the consumer is holding on to those dollars at this point. they are not showing up at walmart and other places. >> i wonder if you're going to anniversary the wage increases at some point at walmart, too. >> mortgage credit is starting to ex paneled, that deleveraging that occurred after 2008 is now beyond us and now you're going to start to see credit expansion, that bodes well again for the consumer. >> liz. >> i think walmart needs to do exactly what they're doing, it just might be a little bit late. they need to shift as much of their business as they can on to online channels and need to use those big boxes as distribution centers. that is an advantage they have if they can capitalize on it. >> thank you both. up next we will look at which

retailers are thriving amid the unusually warm weather on the east coast. plus drones are one of the hottest holiday gifts this season but if you don't register yours with the government it could end up costing you a pretty penny. we will get you those details coming up on the "closing bell."

a white christmas will be a dream for most of the u.s. retailers are suffering through an unseasonably warm winter. there are warm weather winners.

traffic to restaurants, outlet centers and home centers all up more than 1% since december of last year. joining us to talk more is evan gold from planolytics. >> happy holidays. >> merry christmas. let's talk about where we're seeing some particular winners because you have listened a couple here. the first one is amazon. explain that one. >> sure. amazon is an interesting one. a lot of it is electronics. when it's really warm outside, right, we talked about some of the losers on the apparel side. on the winner side you get folks like amazon, people buying electronics, toys, all those traditional gift giving items outside of apparel. >> why are they doing it -- is part of the case for warm weather winners the mall at all? that people are showing up in stores more? >> people are showing up at stores, they are showing up at malls, in addition to the traditional malls, the outdoor

centers and lifestyle centers, people are buying. instead of cold weather items some of the nontraditional, you know, winter apparel items go into the baskets. again, things like jewelry and toys are really hot items and i use hot a little bit as a pun, but that's what we're seeing right now out in the marketplace. >> and just to drill into the rationale here a little more, if it's not cold outside people don't want to give a sweater as a gift? the psychology works that way or are they not buying it for themselves and finding something else instead to put their money on? >> it exactly both. we buy to need whether we're shopping for others or shopping for ourselves. the home centers, right, everyone thinks about the home centers this time of year, people buying shovels and snow removal products. when it's partial out people still go to the home center, they're doing outdoor projects or maybe buying more in terms of lights, decorations, you know, all of the outdoor products also do really well when it's warm

outside. >> do you get the sense that the consumer is spending more money or the same amount of money on just different products? >> it's the same just on different products. the national retail federation expects us to spend over $630 billion, which is 3.7% more than this period last year, it's just what we're spending it on is very, very different this year. >> and also i wonder so there's a few factors here, but, you know, when all is said and done are we going to look back and say the profile of what people were buying changed because it was unseasonal blee warm in parts of the country? >> what we bought is different, how we're buying is different, the entire game of retail certainly is changing in terms of mobile versus in store, but again, what the -- what businesses count on in december, frankly, is the ability to get out and get to the stores, regardless of what store that is. with the lack of snow and the warm conditions, that actually is an ideal setup in terms of traffic as you led in with this piece in the fact that people

can get to the stores. >> i know. that's why i was surprised to see the top of your list of the winners be amazon. >> yeah, so again, but it's the same -- it's the same concept there, right, because it's really the categories that people are going out there to purchase. so amazon is one example but i also cited places like zale's, the traditional toy stores. obviously online is big enough already and is growing, but if you think about it, again, online is a small sector relative to the entire play of retail. most of the shopping that does take place does happen in the stores. >> they're going to amazon but in shorts and flip-flops. >> that's exactly right. and then they're going outside on their bicycles. right. >> exactly. evan, thanks for joining us. >> thank you. >> evan gould. time for a cnbc news update. sharon epperson. >> here is what's happening. to sheeb ba plans to cut 7,800 jobs as it reorganizes in the face of projected record losses

of around $4.5 billion. that's about 3% of its total work force. this is occurring in the aftermath of a major accounting scandal which has systematic overdated profits. the nfl has suspended odell beckham jr. for one game in his conduct on sunday's loss in carolina in which he drew three personal foul penalties, he will miss next sunday's game in minnesota. gop presidential candidate marco rubio campaigning in new hampshire holding a town hall before stopping by a local diner to greet voters. he will spend two days in the state this week before taking a holiday break. and president obama will be jerry seinfeld's first guess when the seventh season of his online talk show opens december 30th. the two spoke at the white house earlier this month chatting in a basement dining room over, what else, a can cup of coffee. that's the cnbc news update at this hour. back to you, kelly. i can't wait to watch that one. >> thank you so much.

our sharon epperson. we have heard a lot about our nation's crumbling infrastructure but coming up we will church the numbers to show you things may not be quite as bad as they seem according to bridges. whether "star wars" has the power to make disney the top performing of the year.

welcome back. it was a late spike that helped contribute to the finish here on wall street that you are looking at. the dow up 123 points. the s&p 15 higher and the nasdaq up 45. "star wars: the force awakens" became the biggest opening in movie history. the final numbers are in. the film grossed $248 million in north america, 529 globally over the weekend. does the movie have the staying power disney needs to be the top grossing movie of all time. paul, where does this put disney in terms of trajectory for being the biggest box officeful all time? >> they're certainly in the running starting off with this

debut, $529 million worldwide in its first three days and this sets it up for a long-term reign of success. second weekend will be christmas weekend, a really big movie going time and then it plays into january, february and march, which is much less competitive than the summer months. there's only two movies in the $2 billion club, avatar, titanic, and i think "star wars: the force awakens" could be the next film to get into that very exclusive club. >> kevin, you know, it seems like the market had figured this out that if it wasn't going to be the top grossing of all time it was going to be an amazing block busting right from the gate. wall street is talking about what about those four other "star wars" movies that bob iger says are in some stage of development. what can we say about the trajectory of this platform or franchise and does it mean something today for investors in terms of disney? >> i think it does because this is a test in terms of how well

iger and his term can manage a franchise. they took over from lucas film and probably one of the greatest franchises in movie history. let's put avatar back in adjusted dollars as inflation because it's a ten-year-old film, that would be worth of $3 billion. that's the bogie for this film. the big question mark is how does it do in china because we know "star wars" inside out in north america and in europe and in canada and mexico, but in china it's just been recently that they've actually shown some of the earlier movies. so the franchise may not have the same sticking power. i had the opportunity to attend the hollywood premiere, i went there, i took my wife with me, to see how iger would present this franchise to the world. because he actually did the presentation, introduced the director, talked about his management team and then gave a hint of how he was going to actually manage the franchise. and what i learned from that experience other than being a huge fan of the movie and eating the popcorn was that he had his hands dirty in this.

he knew the story line, he was part of how it was made. i had a few minutes to talk with him afterwards and i think he really gets the joke. i came away with the impression that the team there at lucas film has taken this legacy franchise and added a disney leverage and i think over the next five years the five plus billion dollars they paid for it will be a nothing burger compared to what it brings in when you look at merchandising, theme park aspect and all the films. >> we are looking at the photo of you at the premiere. >> kelly, i'm a storm trooper. >> why aren't you storming the disney shares? >> i'm not -- i don't own them right now. what i'm trying to get through is this huge amount of noise around the entire espn issue. the cord cutting issue which many analysts have slammed the stock on because it represents so much of disney's free cash flow. we're talking about managing the

future. today it's about espn. here is the optimistic story. i'm going to look at this in q1 because i don't own the stock right now. if you look at cord cutting going on in equivalent markets, take the canadian market where tsn is the espn equivalent, they found that nobody cuts the cord. sports fans don't go around to going online and slice gs basketball from baseball from hockey. they just don't care, they keep the whole package on for the full time. if we see that occur all of these estimates of negativity and i think iger could be write right, whether it sells it directly or whether it stays on cable, when i sense that the beating is over i'm going to go long on the stock. >> fair enough. paul, that's why in a way that issue aside it comes back to the earnings power of "star wars" and in some ways it sounds like the numbers as good as they are aren't necessarily going to be the blockbuster of all time, you know, aren't -- we will see how it does in china, there are

still some questions about it. >> i don't know about that. well, i think, though, that the movie itself is so good and at the end of the day that's the most important thing. mr. wonderful made a wonderful point that this movie hasn't even opened in china yet, china our rent track data shows is the second biggest movie market in the world. so this thing is going to have a really long tale in the 4 billion plus dollars that disney played for lucas films will seem like a relative bargain. had this film not been well received by audiences, critics and everyone who has seen the movie then i think it would have a tougher time, but this great film sets of stage for longevity both in terms of merchandising, in terms of product tie in and of course on demand and home video where these videos will ultimately wind up and make a ton of more money for disney down the line. >> so, paul, just back to the whole cable tv question.

52% of their ebit comes from cable t-v, including espn. let's say that this movie does $2 billion in profit for this company, profit, right. >> right. >> you still have 52% of their ebit under enormous pressure and at the same time -- at the same time it's trading at a premium to those like time warner or cbs. everybody has the same issues but why is it such a big premium? >> i think for disney -- when it comes down to the movies it's really about the high profile nature of that. of course disney is this multi-facetted company that has television under its wing, movies and all of that. but let's put it this way, having "star wars" post these huge numbers is certainly -- there is no down side to that for disney and it certainly puts them on the map as having one of the best years at the box office and shepherding a movie like this, which is, you know -- the fans really care about this

movie and disney did a perfect job of marketing this movie, the ebb and flow of information get out there, working the audience into a fevered pitch and delivering the great movie. if they hadn't done that i'd say they would be in real trouble because this cash cow would basically walk off the farm if the first movie wasn't so great and wasn't doing so well. >> we have to go but, kevin, you better let us know when you start buying. >> kelly, i think i will be going long in q1. >> all right. q 1. thank you both. 5 bucks, that's how much it's going to cost you to register your drones, but if you're caught with an unregistered one you will be paying a lot more than that. but first the holiday travel season is upon us and there is the usual talk about the country's deteriorating bridges and roads, but it may not be as bad as you think. you're watching cnbc, first in business worldwide.

welcome back. all bridges are created equal, that is at least according to infrastructure spending bills. crumbling infrastructure has become a new champion issue in a campaign when gop front runner donald trump. eric cheney has been looking into the data about the true state of our bridges and he has found some surprises. he joins us from the heavily used georgia washington bridge that connects new york and new jersey. what did you find, eric? >> that's right, i'm here in front of the george washington bridge. the interesting thing about the data is that some of these numbers get pulled out of whack.

there are over 600,000 bridges in america and over the last decade the stats on deficient bridges and obsolete bridges have been getting better. it's like airplanes, you hear about one thing and you remember it for a long time, but compared to regular every day issues the bridges aren't as bad as we might think in our memory. there was a lot of problems in the data. if you look behind me you see the george washington bridge, it's massive, but that gets treated as one bridge which is the same as any one bridge that you might find in a rural area, in a small part of town that doesn't get a lot of traffic. in fact, most of the bridges are rural. about three-quarters of the nation's bridges, about 450,000 of them are in rural areas. so when you think about urban interstate highway bridges like the one behind me that's only 5% of the bridges, 95% of them are not what we see, not what you think about for the most part. if you think about who owns the bridges it's not the federal government, it's almost entirely owned by local governments and state dwofts governments.

the federal government owns less than 2% of the bridges. you look at how much it would cost to fix them, it's only about $20 billion. there are 114 companies in the s&p 500 that have annual sales bigger than that number. $20 billion in sales, that's u.s. bank corp. which isn't really a tier one name we talk about every day. the numbers aren't as bad as you might think. >> it's somewhat reassuring. to your point about how it's a lot of local governments. is what's happening effectively is people are repairing and fixing up these bridges. is the number of those in trouble actually coming down? >> yeah, the number is going town. if you look at the data compared to ten years ago the functionally obsolete structurally deficient bridges and put that together there are fewer now as a percentage than ten years ago. there are also more bridges new that are being built. so there's actually more bridges in total which make that percentage number go down also. >> how do decisions get made, then, with all these various

different entities kind of owning. there is not like one group, one federal government that makes a decision. how does that happen? how does that work? >> that's where you get into politics. so on the federal level there was a lot of talk about taxing the companies that we talk a lot about who are foreign based because they are trying to get less taxes. so the u.s. government wanted to tax them specifically to raise money for infrastructure spending. the u.s. department of transportation has $90 pll in their budget but there's $160 billion total being spent on highways because a lot of it actually does come from local and state money. >> if they want to tax those companies you better not tell them the bridges are getting a little better, eric. that's going to derail their plans. anyway, i think another project for the big crunch, too, should be like weighting the bridges by usage and everything to figure out which of the ones we use all the time are most in need of repair. sus as an idea. sort it out there. >> exactly. thank you. >> thank you, eric. eric cheney.

>> i still have relatives who complain they said they were going to top the tolls on the tri-borrow bridge. let's send it over to dominic chu for an earnings alert. >> i would say that i take the tappan zee bridge in the new york -- new jersey area. we're talking about office furniture. this is steel case. it's plumbing. talking about down 20% right now, 42000 shares worth of volume. so a relatively lighter side on volume. it missed analysts expectations on both revenues and per share earnings. the company also gave a weaker than expected fourth quarter sales and earnings per share, guidance than some had anticipated. this is a approximately with roughly $2 billion in market value, it was up lightly support the year. just about 2% but the stock has taken a major hit today. down 20%, 42000 shares of volume, a miss on profits, miss on revenues and weaker than expected revenue and earnings guidance affecting the stock. back over to you guys. >> 20% decline. thank you, dom.

drones are getting documented starting today. the faa requiring people to register their recreational drones and what that means for the industry and your christmas tree. it's next. hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday.

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today is the day you need to start registers your drone.

yes, if you want to fly one of those little critters around or if you get one for christmas the faa wants you to go online and make it legal. if you don't be ready to fork over $27,000. eric chang is joining us now. you have one with you there. eric, welcome. >> yes. thanks so much. i have a few here actually to show you. >> i guess that's permitted since they are indoors. i hope you registered them. >> actually, i did. right before this segment i went on and registered using my phone, i went to registered my uas.faa.org and it took about five minutes. we were worried earlier today because the site was down more than half the day. the site did go up. >> we are showing one of the tiny little drones you have there. they're pretty cool. these things i notice the advertising, all the time they are becoming more readily available. how big do you think this market is going to be for these as a holiday gift, eric? >> well, i mean, investments are

hard to predict but most people are saying 400,000 to a million units sold. that includes everything from drones that are this small, this is something that costs $18 of course to something like the phantom something like a phantom and up. >> could we see it fly? >> sure. i'm going to fly the little one. this issed blade nano qx 3-d and it weighs about one ounce. so this drone is about -- it is eight times lighter than what you need to register: so this is a toy. and this is something that you do not need to register according to the faa. >> because it is under i think five ounces, right? >> it is under .55 points. so just over eight ounces. >> does it have a video camera? >> this one does not. but there are others this size that do have video cameras and they are fun to fly because you could fly them wearing headsets.

>> mike, i would love your thoughts here. >> i'm curious, eric, where you do register your drone what, is done with that information? do they keep it on file. is there some way to track the activity or is it a just in case kind of thing? >> my understanding it is a just in case kind of thing. so my idea is that it establishes an accountability trail. if you fly this out and crash it somewhere and someone recovers the drone, they could track the owner from that. i think the second thing it does is it allows people to become educated at the time of registration. right now when you buy a drone and put it in the air, there is not a lot of opportunity to talk to the owner. now it is forcing people to go to a website. >> and i don't know where we stand on the regulations at this point, eric. what is generally -- what are you allowed to do if you buy one and operate one, in terms of how high and how far you could fly it? does it have to be within eye sight and all of that. >> right now for hobbyists, we are limited to 400 feet above

ground level and five miles from any airport. not over people. not in congested areas. and of course we're not allowed to take money. so the commercial use right now is still a pretty unwielding process. all of that is expected to be figured out by mid next year. >> i think we should require all of our guests to be multi tasking with a drone. >> amazing multi-tasking going on. >> pretty impressive, eric. we appreciate it. and in terms of manufacturers, who do you think is really getting it right here? >> well i think, again, it depends on the target market we're talking about. if we are talking about toys, one of the most popular is blade. and they make this nano device. and cheerson, the little tiny one that i showed in the beginning is popular. it is about $18. and we also have dji in the field and unique. and 3-d r is the main aerial imaging products out there. >> i'm guessing what you are gifting people this season, eric.

a lot of really interesting cool stuff over there. thank you so much for joining us and for flying it around in the meantime. or piloting. >> thank you so much. it is always fun. >> eric chang. it is a shortened trading week but that doesn't mean it is a quiet one. nike is releasing earnings after the bell tomorrow and we'll tell you what to watch for right after this. with passion.ilt my business but i keep it growing by making every dollar count. 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 of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?

welcome back. one of the clear winner this is year has been nike. up more than 35% since january. and now with second quarter earnings tomorrow, shares today adding 1%. so stephanie what is key for the company. the expectations have to be high. >> the expectations are extremely high. but all of the companies in this segment have done pretty well. you might have criticism about the margins at lulu or the execution, or not execution of under armour, but the sales are there. but future orders are up, about 15%. so lofty expectation. >> mike? >> same, how the stock reacts to it, is always the key. in this case i'm on board with the idea that

ath leisure will be a trend. we started wearing jeans 30 years ago but we didn't put 30 multiples on jeans. >> we have another century to go. >> who knows right. and they'll probably confirm that this time. but all of the stocks the select winner this is year, you have to wonder who the margin alibal buyer is this year. >> and this segment is growing something like 7%, right. ov overal, generally, ath leisure is important. and it is getting trendier and cuter and more accepted. you could wear these things in multiple different places. it is not just to the gym and running around on the weekends. they are inno vating, i think. and jeans aren't that innovative. >> not any more. they are not as comfortable any more as we mentioned. i think it was last quarter

where the same thing, expectations were high. the numbers came out and they were really, really strong. at a time when the market itself was really looking for something to sort of hang its hat on. so how much of that is china, how much is that foreign with the strong dollar and is that another added wrinkle. >> i wonder if in three months that changes to alter the momentum. and that is the question. >> and pivoting from nike to the broader outlook, who is the top of the mind for investors here? >> if this kind of bounce holds and it seems like it is in a better position market-wise as last week and we don't have that big scary thing happening like the fed. so people will get impatient on the seasonal rally to kick in if it doesn't happen in the next couple of days. >> and do you think people will allocate more into the stock market as they are concerned about rising rates or are we looking for any kind of calendar affect to kick in in january? >> i'm looking for stability in

oil and the dollar. those are really big things. but as a portfolio manager, i'm looking into 2016 already. i'm already started to rotate into the portfolio something i think will be 2016 winners versus the 2015 winners. >> what do you think? >> it is things like within financials, like a jp morgan which has held up well or insurance companies that could benefit from higher interest rate. and within oil trying to get more quality until i see some start of stability because it is beating me up every day. >> i guess we have to wonder if the idea of higher interest rate -- the fed seems like they want to do more but we'll flattening out on the yield curve. it is funny, because it seems like that is the scripted trade but it is hard to know if it will follow through. >> and the weakest since last year and do you think that market is more attractive to people.

>> expectations are very, very low going into 2016. might be one of the best things that the market has going for it, nobody expects much of it right now. >> thank you for joining us. mike santoli, stephanie link. testimo "fast money" begins in moments. >> we're talking to the chairman of saks fifth avenue. i'm melissa lee. your traders are tim, dan, karen and guy adami. tonight on "fast," positioning for profits into 2016. the two dow dogs that are ready to rip higher and bring you gains into the new year. and the names might surprise you. and the force is breaking records but disney stock is in free fall. could the star wars fade be the perfect time to buy the stock. and don't look now but gold is on the first three years of back to back losses since 1998. but the kmod said not so far. but the bear market in