what's the other thing, robert frank? >> it's time for the other show, isn't it? >> thanks so much for watching. i will see you tonight on "fast money" at 5:00. thanks, guys. >> good to see you. >> "closing bell" starts right now. hi, everybody, welcome to the "closing bell." i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. stocks climb today, a pretty good rally going here, crude oil prices stabilized, an interesting development in crude oil which we'll talk about, but watch out in the equity markets. cnbc contributor and long time bull jack ber ush yan is warning of a 20 to 30% correction in the u.s. stock market in 2016. he will be here to continue this warning that he first issued last friday on this program last week, floored all of us. >> we will see now that he slept on it if he is still as alarmed.

ford getting a lift that it's in talks with google about jointy developing self-driving vehicles. we will talk about other possible tie ups using detroit auto makers with silicon valley tech giants and who ends up being the real winner in these kinds of deals. plus chipotle hitting another 52-week low in the stock market today as the company's e. coli scare continues, maybe even deepens. we will look into all of that in just a moment. let's start with chipotle battling to calm e. coli fears yet again. jane wells has the very latest developments for us at this hour. jane. >> hi, guys. shares under $500 now, the cdc is now reporting a sixth person has fallen ill from this second round of e. coli, a person in pennsylvania, but this person did not report eating at chipotle during the time frame of the outbreak which was mid to late november, so about a month ago, five other people did eat there during the time, this he live in kansas, north dakota and

oklahoma and this e. coli strain is different from the one involved in the previous outbreak, the cdc calls this new strain, quote, rare. now, between the e. coli scares, norovirus outbreaks, the lines are not long. there is no line. some analysts say same store sales could drop in the fourth quarter 10 to 20%. >> i heard this morning another -- another bout of disease was being spread around so i'm done. >> i don't know that i would necessarily stop going there but i would be hesitant to go in this time period until they figure that out. >> i don't think it's -- went through all the stores. it's an isolated incident. >> this morning jpmorgan cut its outlook on shares to neutral calling the latest outbreak, quote, very surprising and disappointing. the problem, not everyone who got sick ate at chipotle. while the cdc believes the culprit it in the fresh produce at chipotle, they have yet to

find an actual ingredient. as you can see, guys, this burrito is half-eaten. i wonder where the other half went. >> you're brave. >> we wish you well, jane. >> thank you. >> tell us how you feel. >> see you tomorrow. >> exactly. that's our jane wells with the latest. for more on this story nick joins us from wedge bush securities he has a neutral rating on the stock, a $500 price target, you also had the lowest estimate on the street for what chipotle's earnings will look like in 2016. how does this latest news figure into all of that? >> i think it's going to be another big step lower. near term q4 is probably going to be below the negative 8 to negative 11, that was pre boston, pre the most recent round of outbreaks that was reported yesterday. it's unlikely they will be within that range and then, you know, more importantly people are looking at 2017 already and saying, well, this should be

transient and the market should go back up and that's what i'm buying for, but from my perspective you're never going to get the types of margins that you saw in 2014 -- i won't say never, maybe not in the next three years. >> why is that? clearly this is a company that could do no wrong as far as wall street was concerned for a while, now they can do no right. is that the reason? is that why you think -- or was it just inevitable that you were going to see a cyclical move lower for this company anyway? >> i don't know if it was inevitable, but, i mean, their supply chain does have issues, it's had issues for a while. that's one of the reasons why i think we're seeing this type of a reaction. it's not only are we seeing all of these new reports, but there are, you know, a lot -- there's a lot of information coming out that this had happened in the past, it just wasn't reported. so clearly there has been issues with their supply chain going back a number of years. unless they change the way they

source, which is a lot of disparate small local farmers they are not going to be able to address the issue. that goes to the heart of their position, their competitive positioning. if they change local sourcing they are no longer the same chipotle. >> we haven't confirmed some of that that you mentioned about unreported issues they may have had, nick, but it's clear and some on the buy side are going out with this new thesis that the future of chipotle is a lower profit margin one. if 2014 was the peak for their profit margins what does that mean for the stock at their current levels? >> there could potentially be another leg down. that multiple may never get back to those peaks that we've seen historically. in the best of times, you know, under 2% menu price scenario they beat missing the transaction growth for, you know, the margins to just stay flat. now we've got this huge downward pressure on sales so we're going to get probably more dee leveraged than you would have

seen at other brands. going forward even if we get back 15, 20% type of transactions over the next couple years, you know, the cost, the labor costs, the food costs are not going to stay where they are today, they're also going to be in an inflationary stage. bottom line is we may not see those 27, 28% level marge i believe so for a number of years ahead of us. >> nick, thank you for now. appreciate your views. >> thanks, nick. >> thanks for having me. >> let's get to our "closing bell" exchange on this rally day. jim lacamp is with us from ubs, steve grasso is at post 9 and rick santelli is back he is in chicago for us this tuesday. steve, the dow is up 280 points right now, are those sleigh bells i hear ringing on wall street. >> i would have to agree with that. you know that saying, never short a dull market. i think people leaving their desks for a holiday, i think that's what you're seeing right now, but the economy not that strong, not as strong as janet yellen would like us to believe.

ism, philly fed, industrial production, all weak, all multiple year weakness, ism first time we see contraction in three years. philly fed three-year lows, industrial production, three and a half year lows. i don't see much strength. >> what about you, jim? do you and how would you position people into 2016? >> well, look, there is a strong tendency for the market to do really well these last two weeks of december and the first week of january, but beyond that i agree with steve, i would agree with everything he said, but would add on that core cap x is down as well. the spreads are really high and the yield curve is flattening as well these all point to a slower economy. it means the fed probably doesn't raise rates any more next year. what does that mean for equities? i think it's going to be a stock pickers market, certain industries particularly healthcare, consumer discretionary will do well but it's going to be a narrow market where you can find stocks that go higher, but i don't think the indexes are going to do all that great.

>> and, rick, since the fed raised rates last week essentially the dollar has been going lower, the color index. i know you're expecting strength down the road, a lot of people are and for that reason in some cases that's why they're worried about the stock market in 2016, but is this just a short-term aberration here do you think in the meantime? >> well, i do think that considering the holiday schedule, the fed moving in december, which is unusual in and of itself and all the other issues of the day, china's slow down, that it's very difficult for us to get our gps on exactly how the markets are going to align next year. having said that, i think that the great divergence proved to have a spread much narrower than many envisioned including myself because i think maybe mario draghi is going to have issues that we're going to see, maybe not able to get as big a bazooka as he led the markets to believe, i think a. about anomics has not been a

fruitful endeavor. all these issues will come back, but in the end if the divergence isn't as great then the dollar is not going to break out as strongly because the underpinnings in the weakness of the other currency is about policy which may have run its course. the other issue is if you believe that zerp pulled forward a lot of activity, those are not only that, i mean, autos are hot, the cycle replacement, i get all that, but i guess what i'm worried about is where is the encore performance going to be over the next six, seven, eight, nine quarters. generally speaking i think rates will always have a ceiling over them, the issue was we didn't know where they would be when they normalized to deliver that message. we're getting more information in that regard post first hike. >> i think every negative scenario is already priced into this market. one reason why i think the market can trudge higher with domestic companies, with quality

growth is because sentiment is just to terrible out there and they've been pricing the dollar that's going to continue to go higher, i don't think that happens and i think that leaves room for a relief rally to a degree in the market, but very narrow. >> that's exactly what i was going to ask you, steve. bears are usually more comfortable when they are all alone. it's getting pretty cloud crowded out there, the number of voices and attitudes about the weakness people see in the stock market. does that make you question whether things are really going to be that bad? >> yeah, i think the under pinning or that bid that we see on selloff days i think is an important factor that you bring up. what i will say, though, is when we slice down back in august that was a pretty deep cut, the problem is we didn't stay there long enough to gain any traction. i think the next time we sell off probably is going to be just as deep and probably a lot longer in the tooth, but to your point i don't think that's going to happen for the next couple of weeks, though. >> speaking of which, rick, you weren't here last friday, but

out of the blue ba rouge yan came on talking about as much as a 30% pull back in the u.s. stock market for 2016, sometime during 2016. it caught us all off guard, so much we had him write it down on paper and you can find the column on cnbc.com right now. what do you make of that? >> well, i guess the -- >> where do you think europe and the japanese markets are going to be? i look at everything as a relative value trade. so i don't see the globe doing that because i don't see anybody taking the lead from the united states and even our 2% economy that we have is evidenced by the final revision of third quarter gdp it's still the growth story globally as weak as it may be. i'm not sure i see 20 or 30%. >> all right. i wouldn't expect you to agree with jack. thanks, guys. see you later. have a good day. keeping an eye on the dow

here with 50 minutes to go that index up 173, the s&p is adding 18 points this hour and the nasdaq up for its part, it's in sort of third place for the major averages but still up 31. it could be the beginning of a new era, ford and google in talks to build self-driving cause or autonomous cars. we will talk about which auto and tech companies could also hook up to create the next generation of vehicles. also ahead a tic toc on holiday shopping. we will go live to an amazon prime distribution hub in new york for an inside look at the last minute frenzy that we are all contributing to. >> we're part of it, yeah. >> coming up.

santa is riding his sleigh down wall street today, a rally under way with the dow up 185 points, near the highs of the session, you're looking at all 30 components of the industrial average all in the green today, caterpillar is the leader, mcdonald's the laggard, but it's also in positive territory today, but a pretty good 5% gain for cat today. >> standard and poor's saying cost cutting will help the equipment maker hold margins, also cited caterpillar's working

capital management contributing to free cash flow. >> that's working out today. >> we're looking ahead to the new year, giving investors a playbook on how to cash in in 2015, phil lebeau lays out his predictions. >> phil predicted gas prices would continue to fall in 2015. he was spot on there. the national average for a flon of regular now below $2 for the first time since 2009. he also said this would be a big year for suvs, right again, a huge one. the popularity of them helping set another record year for auto sales. >> let me see how many more bells we can ring. phil predicted tesla's model x would be the crossover to watch this year. he was right again making him three for three in 2015. so what's he predicting for next year? take a look. >> in 2016 we'll see more cars and trucks with semi-autonomous technology where the driver will be able to take their hands off

the steering wheel and allow the car to handle things like acceleration, steering, braking, even parking. tesla's auto pilot already has some of that technology but in 2016 we'll see more models from bmw, general motors and other auto makers. >> next year will be a challenging one for electric vehicles, hybrids and plug in electric hybrid models. why? many believe the national price for a gallon of gas in 2016 will stay under $3. that means it will be tough for new greener models like the chevy volt to gain much traction even when they're being sold at a lower price point. >> finally, expect the auto industry to have another record year for annual sales here in the u.s. now, 2015 turned out to be much stronger than even the most bullish analyst predicted and that momentum is carrying into 2016. most dealers should do better thanks to strong consumer confidence, low interest rates

and the fact that the average car or truck in the u.s. still over ten years old. >> one other thing to keep in mind when you look at the potential for record auto sales next year, today true car came out with its forecast for 2016 auto sales in the u.s. true car is forecasting $18 million as the total sales for next year. remember, this year we will likely hit the record at $17.5 million. guys, that is some indication of the bullishness that's out there when it comes to auto sales next year. >> did true car see that coming this year, phil? did anybody? >> nobody saw it coming in at $17.5 million. most people say we might get close to $17 million. nobody thought $17.5. >> the replenishment cycle apparently is not over yet. phil, thanks very much. latest auto maker jumping into the autonomous seat would be ford, now announcing they

confirmed this partnership with google to develop driverless cars. this adding to the growing list of companies keen on bringing their driverless cars to market. so who could be next they ask? >> joining us is carl brow we are and we welcome back raj could you mar from carnegie mellon university. carl, i will start with you. who do you think is next and how suggest is this particular partnership between ford and google? >> you know, uber is trying to move rapidly as well and they are investing a lot of money and they are pulling a lot of people into their effort and they are going to be behind the curve if someone like google and ford join up. i would see uber potentially trying to make a move and connect with another large auto maker, it could be basically anyone except ford, i think primary targets could be anyone from gm to someone like toyota. >> raj, elon musk says that his

cars could be autonomous in two years. do you believe that? >> certainly they already released the highway pilot that it can drive in a particular lane, change lanes. i do not expect in two years a tesla car will be able to drive you from your garage all the way to work. that's not going to happen within two years. >> there is an interesting link between uber and general motors and it's carnegie mellow, raj. i drove around with you in the car that you guys are working on, that's been a big gm investment. how much further do you think a partnership could flourish between, for example, those two companies? >> i guess it's up to gm to decide. clearly this partnership between google and ford is interesting, it ramps up the excitement, ramps up the competition, both have a global presence, both have global brands, it legitimizes the technology and the domain. gm has been working on this technology for many years with

us, we won the competition together in 2007, the competition that the u.s. military held, and in short -- in a short eight years we have come very far very quickly. >> what's interesting, though, as you well know is that google's approach is very, very different from the gm approach that's being worked on at carnegie mellon. the google car is a pod that's nothing like a traditional car and not like a ford where as what gm and you guys are doing is something that is, looks like and going to continue to be a pretty traditional car, raj. do you think what ford is doing could be the end of trying to stay down the traditional car looking path for these vehicles? >> i think there are two markets that are happening as we speak, one is the traditional car market, the car needs to look eighth he is clee very clean, people are excited to drive it, that is the car ownership model. the other model is the car model where you use your smartphone to get the car, it comes and gets you and drives you to the destination, that car may have

the funky looking laser sensors on the roof, maybe that model works as well. >> carl, here is the question i have, clearly there is a race under way to develop these autonomous cars. are drivers ready for this? how much demand do you think there will be for these driverless cars? >> well, that's what's going to be interesting to watch. you still have tens of millions of cars out there on the roads that are not going to be self-driving and not everyone can switch to a self-driving car overnight. you're going to have this kind of conflict for probably an extended period between automated cars and, you know, human powered or human controlled cars. i think you will have rapid -- rapid adoption of people who are really tech people, like you see with teslas right now, people who buy teslas are tech oriented, but i think it's going to be a small group initially and the transition is going to take a long time for most people to be in automated cars. >> are we overestimating the potential for these cars for the

next few years here? >> i think -- i don't think we're overestimated their appearance on the road, i think we might be overestimating their dominance on the road. i think the assumption that they will be the form of transportation we're going to all be using five years from now or even ten years from now is probably a little optimistic. ing i do think we will see them available and some amount of cars on the road will be computer controlled in probably three to five years. >> very good. carl brour, raj kumar, good to see you both. thank you for your thoughts on the autonomous cars. >> i've never done uber myself -- >> you've never done uber? >> no, i've never done uber. >> i have a plan for after the show today. >> i was going to say i'm not sure i would want to start by getting into a driverless car. >> that i found very interesting. one path is the more traditional car ownership one, another one is an app hail pod or google driverless car. you can use it to hail your pod. >> by the way, don't get any bright ideas, i'm not getting in an uber car anytime soon.

>> my parents just got into one for the first time this year, i think we've converted them. we've got 37 minutes left in the trading session and the rally continues. the dow now up 193 points, we are at the highs of the session right now. >> but a 20 to 30% stock market correction could be on the way. according to wall street veteran jack ber huge yan, he will be here to state his case. we will take you inside a very busy amazon prime hub, kelly and i will be looking for our packages coming up.

did we just, start looking for a house? oh did you see that listing on zillow i sent you. you see that bathroom? did we just decide to buy house? i think so. yay! find your way home. zillow.

welcome back. a lot of green today as people are wondering if we're seeing a little bit of a santa claus rally emerge despite all of the concern about the stock market's valuation and growth prospects into next year. the dow is up 200 points, the s&p up 21. materials leading the way. caterpillar having a nice session, also deere. week theest performer is technology. >> making the nasdaq the laggard among the three major averages. let's take a look at a couple of movers for this tuesday. steel case tumbling on disappointing earnings and guidance, the office furniture

maker has been hurt by falling profit margins and larger incentives for dealers. meantime, baxalta is spiking. reuters said that shier was preparing to make a new bid for baxalta after it rejected an unsolicited $30 billion over that baxalta said significantly undervalued the company. today's it's up 4.5% to 3977. >> two days left to get your holiday shopping done. mary thompson is at an amazon prime hub in new york city where the heat is to get those packages out the door where they need to be fast. >> if you are one of the procrastinators and need to get some shopping done at the last minute there is an app for that, all you need is a prime membership, a phone, as well as a shopping list. prime members can access the prime now app on their phones and they are guarantee delivery

of your gifts by 1159 p.m. people on christmas eve as long as you live in select areas. manhattan is one of the areas that is served by prime now and so people in that area can expect these deliveries. prime now basically offering three two-hour delivery to their clients and one-hour deliveries for the price of $7.99. convenience for customers outweighs costs. here is amazon prime worldwide director stephanie landry. >> it is a pricey thing to do one-hour delivery to customers but we do focus on keeping our costs in line so that we can offer great things to customers. >> introduced last year prime now's most popular sellers typically include household items though that's changed with the season, amazon has seen a pick up in orders for toys and consumer electronics. this 40,000 square foot facilities serves prime now clients in manhattan and

brooklyn. it operates in much the same way that a typical warehouse does save for the faster turn over of inventory to keep out with demand and an old school shout out happens when a one hour delivery happens. prime now is a sign of where online shopping is going. this year mobile traffic exceeded desktop traffic for the first time during the holiday season and mobile sales they were up 26 -- or have been up 26% so far year over year. kelly and bill, back to you. >> we were going to ask you to track our order. >> i have a tracking number, can you do us a favor? >> if you can order until 11:59 we are ahead of the game. >> i may have bought something today maybe. not that i'm a procrastinator. >> we are fortunate to live in this area where they can really get stuff to you right away. everyone there should be wearing a santa hat. they are making stuff happen. let's go to cnbc news update

now with sharon epperson. >> here is what's happening at this hour. the government signing up 8.2 million people now for health insurance through the healthcare.gov website that's through december 19th. it includes 2.1 million who are under the age of 35. but less than 1/3 were new, most were reenrolled. 24-year-old lakeisha holloway has beener charged with murder in connection with an incident on the las vegas strip where she drove into pedestrians on the sidewalk, killing one woman and injuring at least 35 others. she is being held without bail and is scheduled to appear in court tomorrow. gop presidential candidate and ohio governor john case i can is pushing for tax cuts in his state. this as he campaigned before a friendly audience in westerville, ohio. the state he is balance sheet is strong enough to handle the cut. a government backed panel suggests that adults as young as age 40 without a previous heart attack or stroke may need to

start on a low or moderate dose of cholesterol lowers e. lowering drugs called statins, it's the first time the u.s. preventive services task force has made a recommendation on that drug's use. and that is the cnbc news update at this hour. already some of the most widely taken drugs. about 30 minutes to go here, a pretty nice rally today, especially in the dow but the s&p is up 20 points, the nasdaq up 35. coming up next, a leading trader will tell us what he's watching as we head into the close of trade this rally tuesday. >> and we bring in jack bouroudjian to sound the warnings on a possible correction in the stock market. you're watching cnbc.

welcome back. as we keep an eye on the nice rally shaping up today take a look at some traditional store retailers which are doing quite well. best buy up about 3% on the session, 3.5, urban outfitters, same thing, even gap stores seeing a rally of 3.5%. >> the last half hour of trading on a rally tuesday. joining me with kind of an update on a couple of markets he has been keeping an eye on mark

newton of gray wolf execution partners. we have had increase in volatility in the stock market and the dollar as well. you're going to take a look at that dollar index which has essentially been coming down since the fed raised rates last week. >> we started to see increasing signs of the u.s. dollar index peaking out in the short term and that's provided stabilization for some of the commodities. people are expecting maybe these commodity groups can lead us higher in the next year. u.s. dollar index, this goes back since the latter part of december of 2014, so this is 60% against the euro. it's important to note that this 97 level in the u.s. dollar index is very important and it looks like as of the last couple days we're starting to pull back. if we test and break that which i think can happen in the near term that means the modities will likely see a further boost. we have already seen some signs of precious metals and cattle and some of the other commodities rallying in the short term. i think that could be bullish for the materials space and potentially for an oversold bounce in energy into the early

part of in ex year. >> if it did break 97 where would it go? >> i think we will get down to the next level which coincides with the highs in october and november. it's not going to be a large move. the broader up trend still intact. short term baek weakness that coincides with the balance. >> we were down last week, we are up now. >> this is a lot of volatility for an unchanged year. the charts in the short run are not nearly as bad as what the sentiment might suggest. as we approach the final six to seven trading days it suggested a long bias still prudent and we should probably move higher. the key level is obviously these november lows that we hit back in mid-november, really anything near 1993 in the short term on the upside we need to get above 2100 but this is just consolidation it's not really negative but yet the sentiment has gotten extraordinary bearish in the near term so my thinking

is it's still right to lean long into the new year. >> thanks, mark. >> thank you. >> see you later. these market swings shifting some bulls over to the bearish dark side. jack bouroudjian has made the bull case many time on our shows. we are in the final stages of this bull market and a 20 to 30% correction could come next. jack joins us to explain and defend his position. jack, you still feel the same way as when you first mentioned this about a week ago? >> i do. in fact, kelly, let me correct it a little bit. i'm looking for not the end of the bull market, i'm looking for a cyclical pull back in what is a long great secular bull. no market goes up in a straight line and that's one thing that we all have to keep in mind. over the course of the last session years i've been coming on this network and every dip i've been saying we have to buy it. now we've come to the end of the first leg of this secular bull,

we're looking at a couple warning signals and the market is giving us those warning signals loud and clear. it's happened over the course of the last couple of months. it's the dollar which has moved fast, energy and when you see a deceleration in earnings which is becoming stealth multiplier expansion method if you think about it. remember, the multiplier expanding is the last leg of that bull and we actually saw it by the dollar taking out about $20 in earnings. these are the warning signals. so, bill, that's why i say it. >> essentially, though, i read your piece, you're saying you don't want to fight the fed, too, right? >> no, i don't want to fight the fed. look, do you know what, the one thing that i have said time and time again is trade the market you have, not the market you want. the market we have was one where the fed made it very easy to be long stocks. the market that we have now is one where we don't know what the fed is going to do over the course of the next year. that means we don't know what the dollar is going to do, we don't know what oil is going to do, we don't know what the sovereign wealth funds are going to do and we're getting to what

i call the changing of the president cycle. whenever we change the president not in an election year but the changing of the guard in the oval office there is uncertainty that looms over the equity markets. all of that combined makes even those of us who are bullish a little concerned. you probably raise a little cash, sell into some of the strength, but buy protection. this is the time when you want to use derivatives for their intended purpose. >> now, wait a minute. let me just ask you -- i take your point and what you're doing has a lot of relevance for professional traders but what about the large investor class out there who might not have been in this rally the whole way up. i mean, is the advice that they should wait for a better entry point or if they keep on waiting they will continue to miss participating. i know this year wasn't spectacular but you can't always have a spectacular year. so what is your advice for sort of the person who is looking at their 401(k) allocation, justifyijust trying to figure out what to do with their roth.

>> i'm glad brought that up. that's been my argument for the last five years. the bonds were sending the wrong signal and people have been staying out of this rally. over the course of the last few years we have seen the market go up 8,000 dow points. one, look for alternative investments they can get into that don't correlate with stocks and bonds at least for the next year. two, if you don't have the expertise of getting into what i call that explosion spread to the down side because that's what it is then stay in cash. wait for a better entry point, you will get it probably over the course of the next 12 to 18 months. it's going to be one of those things that comes real quick, kelly e bear markets happen very fast. bull market corrections happen very fast, they are very vicious and if you are not there to be able to catch that falling knife it's a very difficult thing to do, but that's when you want to do t when there's blood on the streets. >> very quickly, jack, the headline is not that gruj yan is calling the end of the bull market you're looking for a larger than normal correction next year. >> we should see it, bill, and the time is right.

again, even those that are very bullish want to see it, it's probably the healthiest thing that can happen for stocks. >> thank you. >> thank you. >> thank you, sir. 20 minutes to go into the close here, we are moderating the gains, dow is up 167 after a nearly 200 point move there. now, remember, yesterday on the close, at one point at the same time stocks were barely higher, we closed up 110, with an s&p up 18. >> all those last minute trades. up next, how does the old adage buy the dips, sell the rips hold up? our dominic chu will test that out coming up. after the bell micron technology and niek reare expected to post their results, we will bring you those numbers as soon as they hit the tape and instant analysis. don't miss it. my language skills, as they hit the tape and instant analysis. don't miss it. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes.

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all right. i like that gains have moderated. i like to say coming off highs and there is a drinking game out there on that one so now i'm going to adopt -- >> that's your signature line, that's why i don't go there. >> we're up 142 on the industrial average, the s&p and the nasdaq have participated as well today but not to the same degree. especially that nasdaq,

technology the laggard even though it is gaining as well today, but the material stocks are the big gainers today. >> back in august we held a contest to pick the beaten down stocks to buy by the dip and which stock that was near a sell -- near a high to sell, sell the rift. you voted on twitter as to what to do here. how did you do? dominic chu joins us now. >> all right. so it was our great crowd sourcing experiment. we asked all of our viewers, readers of cnbc, listeners on siriusxm, everybody in our eco system to give us an idea how they thought they should go about positioning for the rest of the year. let's start with the buy that dips out, we looked at eight dow components that were in correction territory as of august 6th. between apple, intel, caterpillar, exxon and then ibm, american express, proctor & gamble and walmart, we asked all of you audience members to vote and tell us which you thought would be the better buy going into the end of the year, you overwhelmingly picked up apple

here. so m a was it the best buy? among those eight stocks you were better off actually buying intel shares, they were actually up 18% so far since august 6th to today, actually to yesterday's close, we will say that. proctor & gamble, intel the only two positive ones. apple middle of the pack down side, down 7%, not the best buy. the worst buy far is walmart. if you take a look at the average analyst targets apple still has a high target price, analysts are bullish, they still think 37% possible upside, caterpillar only has about 1% potential upside bases on analyst consensus forecasts. what about the sell, rip side of things, stocks as of august 20th that were clois to near highs, facebook, jpmorgan, mikey, starbucks, chipotle, under armour, home depot and netflix. the crowd said chipotle and they got the trade right. you can't factor in food borne inn i. illness but that played a

huge role in it. nike has gained 17% since then. facebook also up big as well. the big losers under armour and chipotle. chipotle down 32%, under armour down 17. from the analyst's side of things here, kelly, bill, they still projected about 32% upside for under armour shares from current levels. if you take a look at some of the other parts of the market, maybe netflix and home depot they say 7%. if you want to say a relative bearish, those are the stocks to watch. interesting that these guys were the ones investors keyed on whether to buy the rip or sell the dip. >> i had the carolina panthers and the new england patriots, but that was something else you were asking me about. >> thank you, dominic. >> you got it. >> see you later. >> are you playing daily fantasy. >> no. no. no. don't go there. not doing that. >> the dow is now up only 137 points, jitters making their rounds late in the session with the s&p up 14, the nasdaq 22.

>> up next why a rise in interest rates is not necessarily good for bank stocks. jeremy hill of old black heed companies will explain why and has a few stock picks for us as well coming up.

about 8 1/2 minutes left to go in the trading day with the dow up 147. art cashin came by and pointed out $400 million to sell going into the close, that is the imbalance we face right now. jeremy hill joins us right now. what are you looking at as we go into the final few days of the year? are you buying this rally or what are you doing here? >> we are buying this part of the rally and what we mean by that is we do think that performance chasing that saunt clause rally we haven't seen so far we will see in the next couple days. i think it's simple that portfolio managers are behind the curve and there is some opportunities right now to -- basically for early next year. >> are you as sour about stocks next year as everybody else? >> yes. to be honest we are. we think that there is the potential for a top line recession and we think that translates very poorly because

at this stage with money becoming more expensive, with potentially the fed raising interest rates 1.375% the end of the year that's definitely going to be a drag on a lot of companies. >> the prevailing wisdom is the fed raising rates is good for bank stocks, for example, but the financials have lagged for the most part in this market this year and you are not very high on them yet, either, are you? >> i call them malarkey. here is why. if you look at the entire u.s. banking system the most important thing is not a linear relationship between raising the fed funds rate and then all of a sudden net interest margins. the most important thing is the slope of the yield curve. here is what banks do in the united states, they borrow. >> on the short end, right. >> and they lend at long-term rates. it's that after ba trosh that's important. >> they stay flat. >> what areas look more

interesting to you. >> we think this is the time of the year where you have to become very sbro speculative. you need to see or you need to try to determine what is either cheap or has good relative value. i think that's a very subjective thing, but for us what is mispriced is inflation. we like shorgt the two year and we also think that gold is something that could play in the near future. >> you think it is coming, inflation. >> we think gold is a good hedge to some of these trades. >> even though you think the yield curve is flattening. >> we think it moves up in tandem. >> jeremy, thank you. >> there are rescue pups from the best friends -- they are ringing the closing bell. i don't know if the dogs are ringing the closing bell but they sure are cute. >> they are adorable. you will see them in just a couple minutes. up next we are right back with the closing countdown. >> nike is gearing up to post

earnings after the bell. we will give you the numbers as soon as they are released. you're watching cnbc first in business worldwide. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim?

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it's been -- since about noon eastern we had the best part of the lion's share of the gains today, we were up about 190 for a brief period, up 156 right now. here is an interesting -- bob pisani is with me here. an interesting development today. first time we have seen this in a while. wti crude closed above brent by a penny, but it wiped out the whole premium that brent has enjoyed for the longest time. >> it was $5 for a long, long time. what this is a function of is ultimately eventually the united states is going to be able to export our own oil and that closed a lot of that gap. >> we become more competitive in that regard so the price has gone up. it's interesting to see. coming up as we mentioned nike and micron technology will be announcing their earnings, kelly and the gang will have those numbers for you. nike has been one of the stellar performers on the dow this year. >> nike is the biggest gainer. so far what i'm happy about today, we are finally seeing signs of the seasonal rally and

in the right way. we're seeing the most beaten up sectors rally. for example, energy stocks have rallied. material stocks have rallied. not tremendously but in the last two days and particularly today we have seen a nice move to the upside. you have china is a small rally in the last couple days and number two oil is behaving. >> right. >> we rolled over into a new contract. all that's a big help to this move on the rally. let me put up the s&p 500. we asked what happened in the last hour or so, we saw some s&p coming off of the highs, a lot of people have asked about that, there have been vague reports about possible terrorist threats in new york. wnbc is reporting there is no specific threats about new york at all. i've been asked about that throughout the last half hour or so. we are off of the highs and the s&p coming back. let's call it a nice late december rally on the beaten up sectors. >> thanks, bob. >> okay. >> see you later. so the rescue pups from best

friends animal society ri ringing the closing bell today, getting kelly evans's attention, and over at the nasdaq the u.s. postal services operations santa is ringing the closing bell. get all those earnings and a lot more coming up on the second hour of the "closing bell" with kelly evans and company. enjoy your new pup, kell. >> thank you, bill. welcome to the "closing bell," everybody, i'm kelly evans. stock markets having a strong session. came off their highs at the end. for some reasons we are about to get into. the dow up 166 points, the s&p adding 17, the nasdaq was the under performer up 32. the s&p is within arm's reach of its highs for the year. i should say of turning positive for the year, something we're keeping an eye on. a 1% gain on the dow bolstered by strong caterpillar performance. joining today's panel we have our own mike santoli and kayla tausche. for more on today's market

action "fast money" trader guy adami. just some reflection first and foremost, mike, on the rally, it was pretty broad based allow some particular larts. >> i think one of the take a ways i had was we have just about recovered friday's big loss and with another 1, 1.5% rise we are going to basically have gotten back to where we were before that surprise etb meeting. i'm in the camp that says professional money was really knocked off balance by that and it's kind of continued to be off sides in that aftermath. now, that being said, you're right, the laggards did lead today, that's probably what you want to see at the very end -- or expect to see. >> it is interesting that we keep going back to what the european central bank did, kayla, as opposed to the big decision we just had out of the fed last week. >> schwab had a note out about the divergence between central bank action, twice as many have been cutting rates instead of hiking them. when we talk about divergence it

is on a grand scale and europe i think holds a lot of keys. which is why so many people are thinking about playing europe. i have a question for guy adami. normally we see a little bit of window dressing at the end of the year, given how poorly so many active managers did this year do you think we are going to see outside moves as people try to rearrange and rye shuffle going into year-end? >> you saw it a little bit today. to be honest with you i think it's a little too late for that. they can do what they want at this point but the under performance they've suffered through is going to be under performance regardless. i'm not sure how the 80% or so of these managers that are probably under performing the market are going to get gentleman en where close. you can try all you want, unless something ridiculous happens that underperformance is what it is at this point in my opinion. >> i wonder, too, how that sets us up for 2016. we keep hearing one after the other prognostications that aren't very strong for the stock market. >> the consensus is building

around more of the same which is flat. within flat, let's say the consensus is right about that, what we saw this year this was the year of be calf what you wish for because people wanted a stock pickers market, they wanted to be able to do different than the market, most stocks went down. it wasn't really a stock buyers market, it was a stock avoiders market and own the 12 stocks that did well. >> we tend to talk about earnings as company specific stories, but the more earnings contract the richer the s&p looks as a multiple of expected earnings. right now it's at 16 times expected earnings. that's the most expensive level that we've seen in about a decade. >> it didn't improve on a valuation front. that's why the high yield matters. high yield gives the green oriel role or red light for stocks to become more highly value. >> stocks are 200 points that dow especially towards the end of the session. then we started hearing traders concerned about some rumors and reports. there was activity in new york city area as we head into the

holiday season. reports buzzing around the market. about a potential credible threat against new york city. jonathan deen is joining us now with what he has learned. good to have you with us, jonathan. what is this threat or threats? >> it seems to be some misinformation that is out there. according to chief spokesman for the new york city police department there is no new specific credible threat to new york. as a precaution today the new york city police department sent out a bulletin to its police department members just reminding them this holiday season, christmas is coming, new year's is coming, it is a time to remain vigilant given the general threat environment we have been under basically since 9/11 and certainly since the growth of isis, but there is no new threat information to new york that is causing added concern. we are hearing this from both new york city police department

sources and federal law enforcement sources. there is the ongoing concern about the general threat environment, but steve davis, the spokesman for the new york city police department told me a short time ago there is no new specific threat to new york. >> and we should tell everybody the headline that was making the rounds here in about the last 15 minutes or so of trading was from another local news source saying according to sources new york city has received a credible threat. jonathan, just in case our viewers couldn't hear you as well you're saying there is no specific credible threat. is there any reason to think there might be more to this story, jonathan? >> i think there was an inaccurate report as a result of the bulletin that went out and that some people jumped on that reminder bulletin for police officers to remain vigilant, that as a result of that bulletin going out a different news organization jumped on that, made a couple of leaps that just aren't there according

to the law enforcement official we're speaking with. yes, there is general ongoing concern of a threat environment we're under, new york remains terror target, but there is no new threat information that has the fbi or the nypd additionally concerned other than the ongoing concerns that are out there. and again, the spokesman for the police department on the record is saying there is no new specific threats to new york. >> jonathan, the picks 11 report that originally reported this takes the bulletin a step further to say commissioner bratton held an emergency meeting today. do we know for a fact that meeting did not take place? >> i don't know about any emergency meeting. i am sure that before any bulletin like that goes out there is a meeting among counter terror officials, the task force is consulted and the police

commissioner will make a decision based on the best information he has. as you know, we are just a couple of days before christmas and they're dotting every i, crossing every t, making sure everything is covered as a result, but there is no information to suggest any sort of terror cell has emerged or anyone has entered the country in any sort of specificer plot to target new york. of course, there is chatter out there from bad guys, there has been for years. >> right. >> according to the sources we're speaking with there is nothing new, nothing that has people on around the clock additional concern than the general concern that is always out there. >> jonathan, thank you for joining us to clarify what we do know this hour. that's jonathan dienst. i really appreciate it. guy adami, you are right in times square. anything to adhere? >> i will tell you this, kell, if we make it to january in "fast money" it's nine years now we've been doing this show every

day here in the middle of times square and i've gotten to know law enforcement guys and gals around here since that time and they do an unbelievable job. i mean, ridiculously unbelievable job. you're down there probably the other most vulnerable spot, you can probably say the same thing about the guys and gals in lower manhattan. so, yeah, that chatter is always going to be out there but i feel good knowing who is out right behind me in times square every day and night. >> dow came down to a gain of 130 and then was rebounding again it went out up 165. >> yeah. >> anything else to adhere? >> kind of a pure reflex move. it was shaping up as that kind of a close where you leaf dated into the close, you see those headlines or the machine sees those type of headlines and it's just one of those things like sell it and wait. it was not a sober evaluation of the kind of threat, whether there in fact was one. >> let's take a look at shares of micron technology. the company looks like it was a revenue miss, the earnings

coming in i think a little bit higher, we will have more on that obviously in just a minute. we're also waiting on the earnings report from nike. that's the big one, the big bell weather after the bell a lot of people will be keyed into. i thought it was interesting today what was happening with shares of best buy, gap, urban outfitters, sessions up 3, 3.5% higher. >> an err krom bee and given. kayla was talking about the chase for performance. that could be a function of exactly what she was speaking about five minutes ago. let me add to that list. foot locker and i have to give credit to karen who talked about this. if you like nike at 30, 31 times forward earnings you have to love foot locker at half the valuation. i think bank of america merrill lynch came out and upgraded the stock today and you saw a pretty significant move there. a lot of these retailers, maybe people are chasing a group that has completely underperformed now for the last six months. >> whole foods is up 4%, too. same category. a bad laggard, maybe you can say

it's cheap at this point. i would point out with regard to nike versus foot locker people love nike for the china middle class story and foot locker doesn't have a ton of stores in china. >> i was just pointing out in terms of valuation it is -- nike is twice the valuation of foot locker so china notwithstanding it's still a significant discount to nike. >> let's loo he have it there for the niem being as we wait for that report from nike. stick around to catch more on "fast money" at 5:00. >> nike is best performing dow stock this year. will its latest earnings justify the huge gain? we will get you those results next. will beaten up biotech giant biogen rebound in 2016. we will hear the bull and bear cases later on. you're watching cnbc first in business worldwide. and can you explain why you recommend synthetic over cedar?

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welcome back. here is a look at shares of nike, slightly lower after hour, it was up 1.5% on the session today. what should investors expect? paul from morning star joins us now. paul, so much focus on this name, the best dow performer of the year. what are your expectations? >> well, you know, one of the things i'm looking for is the

growth rate in china because they had a 30% growth rate last quarter and a big part of the long run story for this stock is going to be the ability to connect with new customers in china and also penetrating with new fabric technologies, new sneaker technologies. china and international is going to be big and i'm going to be looking at the futures. >> paul, what specifically would you like to see in terms of the quarterly growth in china to tell you that that trend remains intact? >> that's a rough one to follow. you just did 30. i think high teens, low 20s would still be a positive. nobody is expecting them to do 30% every quarter. but at the same time, you know, if you were watching china blow up their stock market this summer, i think a positive number there and anything similar to the growth would actually be comforting for the long run growth story. >> paul, at the beginning of the year we were talking about how

nike could fall prey to this consistently strong dollar even though some of the numbers for future orders have been spotty they've pretty much gotten out of the woods. do you think we will see much of the same for '16? >> and in some ways investors have given them a pass because their guidance for may 2016 is only for mid single digit growth. that's because of the strong dollar largely. i think they are sort of out of the woods and i think that markets have kind of anticipated the fed move long in advance. i don't see the dollar as strengthening. if they can keep their revenue up they could surprise to the upside. the other thing is that 2016 is actually a big event year, so people are already starting to prepare for both the euro cup and the brazil olympics. so nike is pretty big in soccer now, those are two big positives. >> let's take a look at nike shares on the move as the numbers are starting to hit the tape. 90 cents is looks like relative to the 86 cent expectations.

the first move did look like it was the down side. now the shares look like they are up about 2%, a little bit more than that. we will have more detail in just a moment. paul, i was just going to sayen to the nike point, you read the "wall street journal" today and they're talking about officials going from a v-shaped recovery to an l-shaped growth outlook for many years. this is going to have a huge impact if the numbers really aren't there the way they seemed to be a couple years ago. >> the neat thing about nike is that it's a pretty steady grower, on the other hand everybody has been jumping on this athleisure trend, nike benefits from that. i have the stock valued at $107 today, that would translate into about 117, 120 target, but, you know, at 130, 133 now you are into 30, 30 plus times earnings. if it's only growing at 17% you've got a little bit of ways to go to grow into those earnings. >> exactly. all right. the earnings report is out for

nike. sara eisen has more. >> bottom line beat 90 cents per share the expectation was 86 cents per share. revenue overall came a bit light but pretty much on par with what analysts were exacting. revenues of $7.7 billion, analysts were looking for 7.8. those futures order by geographic breakdown, north america 14%, futures orders, that was pretty much what analysts were looking for, a little better. china, everyone is looking to china, the growth engine for nike, says futures orders are 31%. that's a lot better than analysts were looking for. and 34% if not for this impact of the stronger u.s. dollar. some other highlights here from the future orders which is usually what the stock trades off of. western europe 17% and if not for the weakness of the euro that would have been 25%. so double digit growth really across the board except for emerging markets where they have been particularly slammed with the strong dollar against other emerging market currencies.

double digits on nike. i would say the other thing to look for when it comes to nike is the growth margins people were looking for. this is how they have been able to be so profitable above so many other retailers. 45.6% growth margins and that was actually a little bit better than analysts were expecting as well. nike popping a bit here in the after hours, there were high expectations going in with the it being the dow's best performer, nike managed to deliver yet again. we will be waiting for commentary on some of the increased spending going into an olympic year and that new lebron for life deal which was the first of its kind. nike continues to post great numbers which is something that the street has come to expect from this company, kelly. >> and shares are still up less than 1%. paul, this isn't a huge response, certainly like we saw last quarter to the earnings. do you have any concerns here about what you're hearing? >> no, in fact, i was just listening to the revenue numbers, again, another 30% in china. i'd point out that the europe

numbers are probably up on the european soccer cup, but those are still very respectable. the final thing is the north american numbers being in double digit growth territory for the future, that means they had good sell through into the holidays. don't forget you said nike is a retailer, they are mostly a wholesaler still. they're getting orders from their retailers, those retailers are seeing demand from their customers. that's a good read through on the american consumer, too. >> kelly, to me the thing to look at is twice in october and november the stock got to 133, 134, that's basically the high. so the question is there room for good news to continue to push this stock to a new level or is it capped. >> that's where we are right now. >> and four of the five last summer olympic years nike has been up. that is a boone for the company, mark parker, the ceo of nike mentions it by name in the press release. so certainly, paul, they do have some positive catalysts next year and they are showing the future are strong so growth

would appear to continue into next year. >> i would point out also they've actually made a bigger bet on brazil because they've actually sprons erred the brazil national team and sponsored the brazil olympics. in the past times they have only sponsored specific athletes. so it's a little bit bigger bet. brazil is having trouble with their economy. >> i was go going to say. >> they're using it as a marketing pull through for all of south america, even north america. they might not get the sales they wanted but i think it's a marketing positive. >> despite that top line miss shares are higher by 2% which is the strongest we have seen it so far. like you said it will be interesting to watch and see whether they can punch through levels. >> this is above the closing high. i think we touched above 135 once. basically the question is can we pie in into year-end. everyone would love to show this in their portfolio at the end of the year. >> exactly. the swooch. thank you, paul, for joining us. appreciate your thoughts. >> thank you. >> our sara eisen for reporting those numbers.

let's send it over to seema mody for an earnings alert. >> we're keeping an eye on micron tech, the memory chip maker beating expectations on the bottom line 24 cents a just u.s. justed versus the 23 cent estimate, revenues a bit light $3.35 billion versus the analyst consensus of $3.46 billion. sales falling 27% in the first quarter due to disappointing demand for pcs. a story we've been seeing play out over the past couple of years. also a drop in asps average selling price. those two factors taking into account the drop. the stock down nearly 4% after hours. >> their outlook in contrast to nike's, mike, is one that has people worried. >> basically they are at their september lows in terms of the stock price and in their guidance they say we hope market conditions improve in the second half of next year. >> second half rebound. hope springs ee certainly.

chipotle mexican grill hitting another 52-week low. a former chief marketing officer for mcdonald's will weigh in on what the chain needs to do to contain the e. coli scare. we speak exclusively to the ceo of lending club when we come back.

chipotle shares were falling in the wake of the cdc

announcing its investigating another outbreak of e. coli in its stores. they might consider turning to mcdonald's for advice. during the '80s the hamburger giant experienced its own outbreak. joining us is larry light who was the chief marketing officer for mcdonald's from 2000 to 2005, that's when the company was invested in chipotle, as a matter of fact, before spinning it off in 2006. we're also joined by tim love, a cnbc contributor. welcome to you both. larry, let me begin with you, what do you think chipotle is doing right and wrong here? >> well, i think the most important thing they need to do is change their policy. they're trying to be a big chain acting small and given its size they've got to become more like a typical fast food chain. they will have to standardize their supply chain standards, they're going to have to raise their testing protocols, they

cannot rely on personal relationships like a small restaurant with small local suppliers, they're going to have to start using bigger scale national suppliers, they won't be able to rely, as they have, on a reputation of using locally sourced food. when you get to be that scale and international, you've got to be big, not just act and -- acting small is getting them into trouble. >> but does that, tim, jeopardize the very thing they stand for if they were to go that route? >> it definitely puts the brand reputation at risk but they have no choice. the brand reputation is now at risk. it's been damaged. so they've got to figure out how to evolve to be what they need to be. >> right. right. >> you can't be -- rely on a fractionated supply chain when

you have the scale of chipotle. >> tim love, do you agree? >> i wholeheartedly disagree with that. the principle of chipotle is their sourcing and the way that they've grown has said we want to support the local people, we want to support the people who care about growing their food and they've got to figure out a way to continue that type of growth. you can't come in, like chipotle, and say, okay, i'm just going to give in and go with the way mcdonald's does it or jack in the box does it. what they need to do is say let's increase the way that we make our food better. i spoke to a source at chipotle today about this and that is exactly what they're trying to do. they've got high resolution testing now, i mean, you know, you think about e. coli, it's like a needle in a haystack trying to find it in produce. they have to figure out a way to make the needle bigger and haystack smaller and that's what they're going to to. >> one of the things that this episode is doing is drawing focus on how labor intensive and different chipotle's methods are. i think bring just cases of fresh tomatoes in, chopping them

for their salsa every day, it is really a way to adapt those processes in a way that can ensure safety. >> you absolutely can. things like cilantro, lettuce, tomatoes, all those can be washed at the source, which is what they're going to have to do. bringing them to the store side is going to be so much of a risk on anybody. our produce is not regulated in america. that is an american problem, not just a chipotle problem. and so we have to all address it, but i think you'll see -- and chipotle has proven this time and time again, while they are under water right now and there is no doubt that they need to put this to a stop, they are going to come out ahead of the game eventually because that is the method of the company. instead of giving in and going to what big companies do, they're going to think small and continue to move forward. >> larry light, as the company works so hard to try and identify the source of this outbreak, continuing to work hard to find this for weeks and weeks and weeks, what do you do for your customer? how do you message this to the

customer who might be ask a ird to eat at chipotle? >> well, they have that situation now and it's going to take a long time to repair. i think we do have a real problem with supply chain in the u.s. and chipotle should be part of the solution, and i think they have an opportunity to demonstrate leadership and be on the side of the consumer and as i understand that's exactly what they are aiming to do. instead of viewing this as a problem, they are trying to define it as an opportunity to redefine the brand as a safety leader, not just a great tasting food leader. >> right. >> they have had a reputation for healthy and they need to build on that reputation, but they will have to raise their standards with suppliers and

they already recognize that that will mean fewer local suppliers and fewer small suppliers. >> and finally, tim love, if this happened in one of your restaurants, what would you do? >> well, when you have something like this happen and you see they reacted in a way that i think i would have done which is you immediately close the store and you try to find the source. what's happening now is things that have popping up recently are cases that really happened four weeks ago. their volume is such that there's no chance of them actually finding the smoking gun that happened in the restaurant. >> but that's why you can't close it until you figure it out, right? otherwise you would be closing every location until you pinpoint it. >> that's exactly right. now we're beyond that point. so what they need to be concentrating on, quite frankly, like he said is solutions and i think that's what they're trying to do. i feel like that takes time and time makes people a little bit uneasy. i think they need to communicate a little bit better about what they're doing if they want to

maintain their customer base and let them understand what they're doing to make it better. >> fair enough. thank you both. larry light and tim love with their unique perspectives from the restaurant industry as those shares close below $500 today. time for a consumer news update. welcome back, sharon epperson. >> iraqi soldiers storming the central ramadi in an effort to take back the city from isis militants. the offensive began early last month following a campaign to cut off supply lines to the city. the boston man who loaned a gun to one of the boston marathon bombers was sentenced today to time served. 17 months. stephen silva says he loaned the began to dzhokhar tsarnaev two months before the bomb js, but we had no idea what was being planned. boston university researchers revealing seven ways to keep your heart healthy and lowering the risk of heart failure. they are managing blood pressure, cholesterol control, reducing blood sugar, eating

better, weight loss and stop smoking. and wiley koity venturing into the myrtle beach international airport this morning, dark through the terminal and speaking past security before it was corralled and captured by the local agency. the koit tee appears to have gained access through the baggage area. that's the cnbc news update at this hour. back to you, kelly. >> he was put down. >> i know. >> you know -- >> thank you, sharon. our sharon epperson. is today's huge drop in home sales a major red flag for housing. a lot of interesting things in that report. also ahead, biogen has been the worst performing large cap biotech this year, we will debate whether it could be the turn around play come 2016. right after this. (vo) me? i don't just wait for a moment. i watch for the perfect moment. the one nobody else sees. and when i find it- i go for it.

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"closing bell" logo in the ice rink. i don't think that's real. let's take a look at how we finished the day on wall street. you should go ice skating down there. it's a great experience. the dow is up 165 points today, good for a 1% gain, the s&p 500 added 17 points, the nasdaq

added 32 that was good enough to finish back above 5,000. last hour we were talking about forward. they confirmed a partnership plan with google to develop driverless cars. that's incorrect. neither ford more google have confirmed. they are discussing plans to team up on autonomous drive vehicles. sources in the auto industry do tell cnbc the two companies are talking but neither one was confirmed the talks. we apologize. home sales posting the biggest decline in five years last month and the numbers were pretty eye opening. let's get to eamon javers. what was going on in this report? >> this was a huge miss in existing home sales, down 10.5% from the previous month the november number $4.76 million, that was considerably less than what the market was expecting. people thought maybe down 0.7% or something like that, obviously this was a huge disappointment for those folks who thought it was just going to be down a scooch. the national association of rel doors says there was two things going on here, one is new

mortgage document regulations that require changes in the way mortgage settlements happen, it's at that closing in the room whenever one-hour signs the papers, those documents are new, apparently a lot of people in this process are having difficulty understanding those new documents, explaining them to the buyers and sellers and if they have any difficulty they're delaying the closing so that may be pushing those november sales into december. there is they're having significant programs problems with inventory and price, prices might be too high in a lot of prices across the country for these buyers at this point. down 10.5% in november, it's a big miss for existing home sales. >> it is. and it was a surprise in some ways to see this change having that much of an impact. we will talk more about it, eamon, thank you for now: just moments ago lending club announced it will be raising interest rates, the first alternative lender to do do so following the fed's rate hike last week.

thank you for being here. >> thank you for having me. >> let's begin with what we just heard from eamon javers and something that's royaling the mortgage market, it's these new standards that are taking a longer time, i don't know whether it's delaying or affecting the closing of some home purchases at all. you guys may be dipping a toe into that market. what can you tell us about the mortgage business right now? >> lending club is not currently in the mortgage business, we focus on unsecured consumer lending and an alternative to credit cards, but we can certainly weigh in on the mortgage situation and a lot of what we do at lending club is use technology to remove friction and lower costs. so then the process that requires new or additional documentation is going to increase friction and is going to take away some volume from the market. >> exactly. >> the big news is obviously the

rise in your platform rate. we were wondering last week when we saw all of the banks raise their prime rate how the alternative lending community would respond to this because it is sort of uncharted territory. what goes into your decision-making process and why did you decide to raise your rate now? >> that's right. we said before that we were not rate sensitive as a platform and we want to keep delivering as much value to our customers on both sides as we were before the rate increase. so the way to do that is to increase our rate in the same proportion as the fed rate and essentially reflect the rate increase on the borrower side but where credit card bills we also reflect that 25 basis point increase in the next billing statement as a credit card or index on the prime rate and the prime rate does increase as well, but we want to pass on that benefit to the investor side of our platform and

continue to deliver as much value to both sides. >> obviously it does become more attractive to the investor to have a higher rate product and it does echo what we've seen on credit card aprs on the back of the prime rate but about 30% of your borrowers are borrowing for some other type of loan, be that a fixed type rate loan. will they see their rates rise, too? >> they will. as i said, we are focused on unsecond urtd consumer lending, most of our consumers use our loans to pay off their existing balance with a 30% using our loans to ifness a new purchase, investigate an alternative to charging a credit card so it's about the same reference point for us, it's really being an alternative to credit cards and as credit card rates go up our rates go up. we are passing on that benefit to investors. >> if you can find a way to take more of these frictions out of the mortgage market we are all

ears. thank you for joining us in the meantime. >> thank you. >> up next, biogen stock under the microscope. we will debate its turnaround potential for the next year.

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welcome back. bio yen is down about 11% year to date. can it turn things around in 2016? let's talk about it. roll it out, if you will. joining us is michael yee and

andrew mcdonald who says this is the best short in biotech. great to have you both with us. michael, first to you. make your case. >> yeah, i think three key points, number one, it's a hated stock, the stock is down a lot and trades almost near its base business alone with no pipeline. number two, you've got major catalyst readout in 2016 from alzheimer's drugs, lingo a in you multiple sclerosis drug and later in the year another alzheimer's drug out of lyslely and drug partner with isis. we haven't got the daytona yet. >> not that assignment. andrew, what about you. >> yeah, right. >> yeah, so i take a different point of jaw on biogen. it is a company that is in trouble, they've missed the first and second quarter earnings, they have had to move their revenue estimates down lower and in october they laid off 11% of their staff.

so this is not a growth stock and yet its still trading at a growth multiple. really what this company has is products on the market that are actually in decline and a pipeline that does not look very good and is not supported with strong data and i think you're going to see clinical trial failures in 2016. >> michael, this is mike santoli here. i guess i would ask you if you say it's a hated stock, obviously we just heard some of the reasons that it's hated. does the market ever get it that wrong that you have a price starting of 50% up from here, it's trading at a market multiple, so i guess what are people missing? >> well, i think the key is that with the stock down so much, with sentiment so negative all the things that he's referring to are pretty well appreciated. i look at the performance of the stock, that has been reflected. as you turn the calendar to 2016 i think that guidance will be fine in 2016 and more

importantly the data is on the come. the alzheimer's data is coming, everyone assumes that alzheimer's fails and you have this lingo drug in the summer and you have a lot more data coming out. if these things are positive which is not in the consensus model they're bigup side. >> that would be a big risk for you, andrew. >> right now biogen is trading around 16 times next year's earnings and i don't know why michael is going to think they're actually going to hit consensus numbers for 2016. if you look at biogen and one thing that's often forgotten or overlooked about biogen is a lot of their revenue growth has come from price increases despite the fact that their product volumes are actually in decline. 2016 is an election year, price increases have been in the spotlight for drug companies and quite honestly i don't think biogen is going to do it in 2016. i think there is significant

risk for 2016 numbers. that's my first point. my second point is there's going to be competition in the multiple sclerosis space in the outyears and i don't think that's fully appreciated in both michael's and the consensus models. >> we will give you the last word, michael. >> yeah, last word is if you assume that there's competition coming in the stock is worth about 230, 240 bucks. i appreciate there is about 20% downside if all the pipeline fails and they miss the numbers. 20% down side versus up to 100% upside. i would not want to be short the stock if the alzheimer's drug works and lingo drug works. that would be a bad way. >> isis pharmaceuticals has changed their name to ionis. the new ticker is ions. thank you both. >> thank youy. >> michaely and andrew mcdonnell. concussions are a controversial issue in football. we will meet the ceo of one company using technology in helmets to fight head injuries when "closing bell" comes right back.

welcome back. head injuries in athletes remain one of the hottest debates in the nfl and many sports. but the league is facing a billion dollars worth of settlements due to lawsuits and on friday the film concussion

hits theaters and it is the story of the scientist who discovered the head trauma. common sensors places small sensors in helmets that monitor the brain and alert teams to when a player might be injured. joining us now is buddy smith, ceo of buddy sensors. and in a way this is like a fitbit, instead of counting steps it counts hits to the head. >> yes, it does. >> and what have you been experiencing in the technology. >> it was formed brain century. and our team bought the company. and we care about kids. and i've been a youth coach for ten years. and we tried to create a safe game and monitor with common sense. that is one of the things from a concussion perspective, there is extremism on both sides and we're trying to bring common sense to the game of when a

player should be checked. >> was it the case for you, that you weren't really reporting all of the hits and head injuries you were getting. >> it starts with a young age, to dust the cobwebs off and come up and continue to play. but long-term hits show that is not what to do. chris borland retired after one year at the top of his career. to have the education now to detect these hits to see when it is really bad when you don't know, kind of take you off the field if you don't need to be on the field, it is only beneficial for the players. >> do you think the movie "concussion" will focus on what needs to happen in the nfl or will focus on the past. what are your thoughts on the big movie coming out. >> i haven't seen it. i have seen the screenings. but i think it will shed light on the issue at hands. and it has been around and the players are modern day gladia r gladiators because we love the game or because of the player incentives, we want to stay on the field and continue to get

paid. it will shed light on that situation. >> the league said, look, we have to have a protocol for dealing with this. how would this sensor or technology change or determine whether somebody in fact should come off the field. >> right now the nfl, they have guys with binoculars up in the stands looking down on the field. so it is not really the most affective way to measure. what we've done is we've taken from all age groups, from pop warner, high school, middle school, up to the pros, that have utilized the sensor to really understand what is happening at the time. because clearly you can't see what is happening inside of someone's head. so our method is really a solution to detect when someone should get looked at. and so, like, tuton was saying, we're trying to create a safer environment and partner with the companies looking for the data. they have new blood tests that can identify when you have a concussion. so we are partnering with those companies. we want to be the detection and the common sense is what we're trying to bring to the solution. >> but obviously cost for the younger leagues is an issue.

the nfl could afford. this but how do you find the funds for pop warner and high schools to put those at scale in their schools. >> absolutely. i think that for us, this sensor retails for $80. and so my son who plays football, when he walks out, his cleats cost more than that. his undershirts and his helmet cost $400. so it is a small investment when you look at the overall value or cost. tuton was probably playing $2,500 worth of gear when he walked on to the nfl field. >> there is no shortage of funds for equipment so why not make this part of it. >> it is one of the things that will protect the kids at a young age and as they continue to grow and keep them in the game. as a parent, i had a son that plays high school football as well. the last thing you want to see is your kid laying on the floor because he got hit the wrong way. >> i could barely watch some of the hits on tv. >> it traumatized them. >> thank you for joining us. tuton and buddy smith.

ceo of the company common sensors that makes this little guy. >> appreciate it. thank you very much. and seema mody with details. >> what is happening to wti right now. a crude extending gains after hours after seeing an unexpected drop in crude inventories in the week by 3.6 million barrels in the week to 486.7 million compared with the analyst expectation of in crease of 1.1 million barrels according to the american petroleum ins tucson. and now up 1.8% after hours extending gains. back to you, kelly. >> seema. thank you. appreciate it. keeping a close eyes on those. space x nailing an upright rocket landing. and while elon musk basks in the event, someone else isn't so impressed and we'll tell you who that is next when we come back. working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures...

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welcome back. elon musk's space x making history last night. the space exploration company landed the falcon upright after launching 11 satellites into space. and the space starter of blue origin tweeted, quote, congrats space x on landing falcon's sub

orbital booster stage. welcome to the club. this is the late nest a twitter feud between the two after they landed their own rocket. is all of this good for the development of private space exploration? >> i think so. i think it is fun. i didn't think we would have a lot of people sparcing the difference between space and sub orbital flight. but kind of amusing. >> this is the equivalent of people huddled around the television watching apollo 11 and 13. we watch billionaires fight on twitter. it is the modern era. >> and again this goes back to -- like you were saying, mike, is one suborbital and that makes it more relevant. >> i'm waiting for people to say it is a hoax like we never landed on the moon. >> they want to see more proof. mike and kayla. thank you for joining us on "closing bell." "fast money" begins in moment. melissa lee, what is on tap. >> a number of stocks sell off so do you dip into the stocks.

buying the star wars fade, or apple after the iphone release. >> after the fed hike. >> exactly. you get it. >> no further delays. over to you. >> "fast money" starts right now. live from the nasdaq market site overlooking times square. i'm melissa lee. your traders are dan, david, karen and guy adami. tonight on "fast," nike surging and we'll hear from the ceo. and the one stock getting crushed by nike's success. and what do disney, apple and amazon all have in common. the answer could have major implications for your portfolio. we'll explain in a "fast money" report. and later chipolte is in full-blown crisis mode as they battle the e-coli outbreak. could this stump the growth investors were banking on. and first the head-scratching rally in the market. up 200 points at the highs and here is what