>> live from new york where business never sleeps this is squawk box. >> good morning, welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. they'll be available on all streaming music services starting on christmas eve. unlike taylor swift the beatles songs will be available on free versions on services like spotify. first let's get to the markets. yesterday was a good day for the markets. the dow was up by 165 points. you can see this morning the green arrows are up once again. s&p futures up by 8 and the nasdaq up by 20. >> let's tell you about the big

stories we're watching this morning starting with oil. wti crude closing higher than brent yesterday. that was the first time of august 2010. watch for inventory data. we'll get that at 10:30 eastern time. and break in the last hour a new report coming up from opec predicting that oil will rise to $95 barrel but only in 24 years. also on tap we get durables goods and personal income and spending and at 10:00 new home sales and consumer sentiment but some of the numbers came earlier when the commerce department released spend dag at a yesterday. we got november consumer spending rising .3% last month. that came in line with forecasts. also apple making it easier to nominate a director but there are restrictions. in a new filing that it put in with the sec the tech giant says it's going to be eligible to make a nomination. a shareholder or a group of the

20 shareholders must hold 3% of shares continuously for three years. so also the good news there is it prevents some of the short-termers. >> 2040. unbelievable. >> 2040. >> at $95 barrel. >> remember when 2000 sounded like a futuristic year. >> what year is it now? 2015. >> first we said a couple of months we'll be back to 100. then may still here for awhile. now we're talking, how many years is that? 25? 25 years and it gets to 95. they have no idea obviously but they continue to see their market share and the am of barrels shrinking. not the increase slowing but actually shrinking as competition continues from russia and the united states. >> you saw that conoco phillips said forget about it.

pulling out of russia. we can't make any money in this venture. it's tougher and tougher and tougher. >> it's staggering to see it. >> apparently it's tough for u.s. oil companies in general to ever make money in russia but conoco says forget it, we're out. >> it has huge implications for trying to migrate away. it has huge implications because unless technology really pix ck up the pace with alternative and renewables. >> cheaper option. >> if you're worried about climate change it's not good. good for filling your tank. bad if you want to, you know, survive without water or dying in the heat. >> stocks to watch today, nike's earnings topping estimates. revenues were a bit short but future orders up 20%. that was well above wall street consensus. among the drivers, demand strong in north america as well as china.

28% or so in china. i think 11 or 12% revenue growth. 4% if you include the dollar. the only just slight negative was that because of getting, working out of some inventory over the next quarter, gross margins might not be as positive. we're going to talk to an analyst at 6:20 eastern. the company continues to sell a lot more stuff online as it is taking that head on. i guess, you know, that's future orders and the future for any retailer is going to be the web. and shares of bed bath and beyond are under pressure with the retailer cutting it's current quarter earnings citing softer in store transactions. micron trading lower this morning. among the reasons, weak demans of chips used in pcs and lower average selling prices. shares of celgene getting a boost. the company settling patent

litigation in the u.s. for its top seller. it will allow for the sale of the generic version of the drug more than a year before the patents actually covering the drug will expire. speaking of beatles. >> yes, sir. >> sir paul was at the rangers game on sunday night. >> was he really? >> yeah. so it's just really cool what they do. all of a sudden they'll start playing on the big screen, i think they did like, i don't know some great song. >> i'll hold your hand. >> and you saw john like this and paul like that and then they focus in on him and he waves and he's smiling and holding a rangers puck so i was on one side. i could see the camera so i picked him out where he was across from us and then i watched him the rest of the game. >> you watched him instead of the game. >> but i was watching how long he stayed. who he was with and how much fun he was having. they played a lot of beatles

songs and he sings along. >> that's what i want to hear. >> he's into being paul. i didn't see him eating any of those horrible meat products though. >> vegan. >> tech news this morning, google building a new application, the company trying to better compete with rival companies such as facebook. google's new service expected to use the artificial intelligence expertise integrating software programs that answer questions inside the messaging app. it's the ai but i don't know if you've seen -- you all use apple products but now even on their e-mail, g-mail on the phone, they will suggest an answer. so somebody e-mails you and says would you like to have lunch at this day -- >> really? >> so you don't even have to type it all out. they give you three potential answers because it can read the message -- i think it's perfect. that's what we all need.

>> they don't know that person is a total bore or you always have to pay. >> no but it will look at your calendar and say you're not free. >> they don't know whether you like the actual person. just when your schedule is free. >> take lunch out of it. can you do this and it will say yes, no, maybe. it will give you options because it has a computer sense of what the message is. >> if i get invited to anything with you it tries to -- no, he's washing his hair that day. >> you're washing your hair that day. so it doesn't make up excuses. >> joe has been texts me. texts at night. >> business matters. >> texting at night. watch out. >> you started it because all i did was a reply to you on remember we had to go to the wedding. you started. i had your number ready just to reply to. so you made the first move.

>> mistake. >> some of our viewers yesterday sent us a hyundai commercial -- videos. and it said -- on one of them it said at exactly 29 seconds you will hear the perfect hyundai pronunciation. so being helpful as i am, i sent that to you to watch -- >> okay eddie haskel. being helpful as you are. >> a little bit hard on the beaver. >> let's check on the broader markets this morning. we saw that the future's here are higher. let's check out what's happening in europe. it looks like the dax is up by 1.5% and so is the cac and the ftse. check out what happened overnight in asia. you'll see that the hang seng was up by about 1%. korea kospi up by a third of 1%. also take a look at the ten year note. yesterday the yield ended at

2.239%. this morning you see it's right at 2.248%. the dollar a little bit stronger against the euro at 109.24. it's down against the yen at 120.94 and gold prices that were down about $7 yesterday this morning look like they're down another $3.30. >> today is the last full day of trading. stocks continue to gain traction and go higher and avoid a down year. let's talk about it right now. he's the deputy chief us economist at ubs and joe is the portfolio strategist. i got that right? >> not really. >> we discussed the whole hyund hyundai. you have to send me the commercial for him and maybe i can get it right. is there any chance we can have

a little santa claus something? >> is the world okay? >> yeah. >> everything's fine. >> it's all good. people are worried about overseas activity and they're probably a little too worried about it. if you look at all the details, details look good. no one is getting layed off. no one is miling for unemployment insurance. u.s. consumers in good shape and housing in good shape and we have to think about -- we had a huge manufacturing expansion, maybe it's taking a little bit of a breather. i'm about as optimistic as you can get. >> what's your gdp number for next year? >> a little higher than this year. between 2.5 to 3. but you a little more on the inflation side so your nominal numbers look better. so revenues look better. >> going into the last week and a half here, is there a play? play to be made. >> it's been holding this market back, you know, this quarter and even this year has been the corporate profit story and i think that's something that a lot of people are overlooking.

as drew mentions the economy is fine. looks to get better but what's been happening through the bulk of this year is corporate profit growth in the u.s. and year on year basis slowing. so people are asking why haven't stocks worked out so well? where is that december rally we typically have and the answer is at the most base level. in an environment where profit fwroeth is falling on a year on year basis it's hard and a tough environment for stocks. we're more optimistic for 2016. >> what does that mean? >> the u.s. is going to out perform in 2016. we have been four or five quarters deep now into this corporate profits recession and looks like in the first quarter of next year profits growth is going to turn around in the u.s. it's going to turn positive. that's a better environment. >> you had a lot of guests recently come on and say put your money in europe. if you want a really great opportunity, there's going to be more opportunity there. do you buy that? >> i think it's very important to differentiate europe and local currency terms versus

foreign currency terms and if you're going to put your money in europe f you're a u.s. based investor you do well to hedge that currency risk because what we see is europeans continuing to weaken their currency. so if you're a u.s. based investor and going to europe and you're unhedged you have a lot of currency risk there. one of the big plays in 2016 would be european exporters to the united states and hedge the currency. why? because they have a big currency advantage right now. dollar has been going up and euro has been going down. today it's at 109 so i think the real play in 2016 would be european exporters into the u.s. because the u.s. economy is doing better. gdp numbers higher this year and the fed is intent on hiking because they see the economy get brg so for european or even a japanese company doing business here they have a big currency tail wind. >> right. is there another country besides the united states you think is

going to grow. >> china is going to grow in a meaningful way but it's slowing. is u.s. looks the best of pretty much anything out there that i think most people are thinking about. the u.s. is going to lead. other countries can do better than people are giving them credit for. i cover canada as well. canada, i know it's going through a tough time now but i think they'll follow the u.s. lead and a lot of countries will follow the u.s. lead. if we're growing we'll take a lot of people with us and i think the break down you're seeing, particularly in a lot of the emerging world is did they align themselves with the u.s. supply chain or chinese supply chain? most of those countries are doing better. >> we'll leave it there. thank you guys. happy holidays. you're wearing a holiday tie. >> i am. reindeer hiding behind teas. >> festive octopus. nothing like the holidays like octopus. >> we'll take what we can get.

>> octopi. >> it's almost an octopus's garden. >> it's a quadropus actually. >> i have the same tie. >> that's how you know that. >> coming up the insideline on nike after the company's beat the street so far this year. stock is the best performing dow component. first though, here's a look back at this date in history. ♪ ideas are scary. they come into this world ugly and messy. ideas are frightening because they threaten what is known.

they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.

while you're watching this, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you?

another big quarter for dow component nike. the stock gaining more ground after profits beat expectations. joining us to break down the numbers, an analyst for city research. she leads the apparel and footwear retailing. how long have you covered nike? >> ten years now. >> i mean, is it just me or is it just unbelievable that high is never high for the company's performance or the stock? they just continue to -- i guess it's international expansion in china now but apparel of all

kinds. it's just very well managed. >> it's a very well managed company absolutely. the numbers we saw going back 15 year stles never grown futures as fast as 20%. that's lacking pretty strong growth over the last couple of years. >> i don't want to take credit for the 20% but the olympics have something to do with it. that nbc is going to be running, right? >> well, actually encouragingly olympics weren't in the future's window yet. >> one of the prospects for why they're comfortable and they have to get rid of the oil products to keep it going again. >> yeah, that's right. the olympics always provides an opportunity. >> so it goes december to april i guess. >> that's right. >> so the olympics is past that. there is even before the olympics. >> right. so they were in the european numbers so that's -- >> the euro championships. it's a soccer tournament. >> a round ball.

>> they know it's not really football. but anyway, that's that sep sepp blatter guy. >> i don't know. >> he's in it. he says he's done with soccer. 8 year ban and he's like 75 or something. >> at first when i saw that i was like why aren't they giving this guy a lifetime ban. >> his choice. sorry. so okay. china is 28%. have they ever fwroun that much before in china? >> i think probably in the earlier stages of china they have. >> how do they reenergize that area of the world? >> what's so exciting i think about nike and so revolutionary about them is they have been able to revitalize the marketplace. not just in growing emerging markets like china for the brand but places like north america. they have been able to merchandise it in a much more effective way while securing floor space and market share. >> other than amazon or walmart

the sky is the limit. is it going to go to a 400 beside company? >> as you point out what's so exciting about being a brand in this day and age versus maybe a retailer per say is that you have this global community, this global secular growth is definitely part of why nike is so successful. the brand is authentic in that it identifies with health and wellness and athletics but there's also a fashion component. >> usually things are not that fashionable for that long. why do you think that is? >> some fashion cycles haven't always played to nike's strengths but i think there is an opportunity for them to

identify with a lot of different consumers and they have also been one of the strongest players as well. that innovation piece sets them apa apart. >> and the light lowering of margins is due to clearing out inventory? it's not a negative -- doesn't indicate weakness? >> we don't think so. inventories are higher as they attribute that to the disruption from the west coast port disruption that we saw earlier this year but overall inventories are up 11% and they posted this. >> so for our writers would you say that nike continues to just do it? if you were writing the intro to the story would you use that. swoosh. >> did i mispronounce it?

>> yes you did. >> like hyundai pretty much, do you have a preference? any other ways we can do it besides swoosh and just do it. >> there's a lot of ways. >> we need like take a bite out of apple, we need things to draw viewers in. >> i'm not that clever but we always like to compare it to a long race, a marathon. >> see. >> we're going to see something in three months. they do this four times a year. >> how much did lebron get for this lifetime deal. >> hundreds of millions of dollars. >> do we know numbers? >> we don't know. >> that's not out there. >> no. >> it's forever. >> it's forever. >> no one has ever done a deal like that. >> aside from jordan so you could see potentially maybe a line like lebron for jordan. >> jordan still makes $100

million a year just from nike. >> that's amazing. >> but no. w he makes more money from that now than his career. >> thank you. >> the big short opens in theaters nationwide too much. so we turn the tables on them asking how much each of the movies central players are actually worth and we're joined now to find out what we found. he has some of those numbers. >> so thinking about slices you can do the same thing with a movie and figure out the bank ability of each actor, producer. so brad pitt is the most valuable member of the movie. this is his marginal increase in

revenue. it's based on every actor and director and crew member that's done any movie. there's a guy in hollywood that runs the numbers.com. he sells this data to studios and investors to figure out how do you put certain parts together in movies. >> their inclusion in the movie increases the value of the movie's box office revenues by that much. brad pitt is worth $9 million. >> so in total though if you would just add up these actors is that what the total box office would be. >> yeah so the four of them add up to about 20 million. the total box office expected for this movie about $83 million. >> how do they get from the 20 to the 83 part though. >> because there's way more actors in that movie than just them. tons of crew members and directors and producers. the director is worth about

$3.5 million so it's not just steven spielberg. so many guys in it bring it together. >> i've seen this movie. brad pitt has a relatively small part in the film. but you don't know that until you've seen the movie. you know he's in the commercials and he was in money ball. >> based on this type of math you say say something like oceans 11 that would be the biggest box office draw of all time. >> theoretically. people know when there's 11 people you get the sense that clearly there's not 11 stars. so you can have three or four and people might think these people bring a lot of value. you would think it's worth a lot. he's only worth 1.5 million. so there's a lot of people in oceans 11 that have big brand names but they're not worth a lot. >> so right now we keep talking about it, most of these theaters

are all full one star wars and crowding out a lot of fill. there's a big question mark around whether there will be a distribution for other films. >> who made this movie. >> i don't think it was univers universal. >> i think it was paramount. >> it would help to make for a compelling movie. >> that's dwhy only four wall street movies ever made more than $100 million. watching guys that have no idea. talk about memorizing scripts so they can pretend to talk about these. >> that's what actors do. >> that's why they don't make money though. >> luckily that's all they need to do most of the time. >> wall street movies almost

never make over $100 million. >> we calculated four of them on an inflation adjusted basis. >> based on a long island bucket shop had nothing to do with wall street. >> boiler room was another room. trading places. they fall short. even the original wall street only about $70 million in today's dollars. >> thank you. >> happy holidays. >> i have a red white and blue shirt. >> happy fourth of july. >> this is a holiday look. >> no. >> welcome to the neighborhood. >> thank you. henry sorkin and i got holiday bow ties and i promised to wear it on the air. i tried this morning to tie it and i couldn't get the knot done

and then i wore it into the car and the guy, jay, who his real name is jay, said you look -- i said how does it look? and he said kind of like pee wee hermann. >> that would be different how from the normal day. i said we love henry but we're not going to do this on the air. >> what's the average of not being able to tie a bow tie? >> maybe at the end of the show i'll do it for you. >> that's what happened. it's the sorkin sweater of the month. >> when we come back, the real life elf on the shelf going viral. but first take a look at

yesterday's s&p 500 winners and losers. those kids are really cute.

♪ welcome back to squawk box. this morning the story of a real

life elf on the shelf. the adorable pictures that have gone viral. >> twas the week before christmas and in the town of paradise the elf on the shelf one being very nice. he tiptoed down stair with wrapping paper and glue. >> i can go to the bathroom in the middle of the night when i needed to. >> he makes mischief and messes. not quite a role model. look at that sweet tooth. but big brother zach knows this elf's not a toy. he's rockwell, his brother. yes, he's a real boy. spreading the magic of the season with a little help from his pop. >> i'm holding him the entire time. >> and the magic of photo shop. he sees you when you're sleeping and tells santa when you have been nice. his pictures so popular online people shared and shared price. strangers clicking photos of the kid. >> not expecting that it would get the attention that it did. >> but this family had a taste of what it's like to spread joy.

look who's next to rockwell. do you recognize that boy? that's will. he can fly. as we told you before, his pictures proof kids with down syndrome can soar. these photos taken for one simple reason to share the love this family show nos matter the season and for the two youngest kids it's a love that never ends. >> we're really excited to watch them grow up together and be best friends. >> life's not always picture perfect but one thing is clear, you don't have to wait until christmas to feel this kind of cheer. it's santa's best gift you can't find under the tree. so from the lawrence family and ours, happy holidays from nbc. >> you got to love a segment like that. it's one of those great, great pieces. when we come back, is college worth it? a debate we're going to have on the price of admission and of course the rising debt toll. we'll talk about it next. first though as we head to

break, take a look at currency markets this morning. stay tuned you're watching squawk box here on cnbc. first in business worldwide. back in a moment. i asked my dentist if an electric toothbrush

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while you're watching this, i'm hacking your company. grabbing your data. stealing your customers' secrets. there's an army of us. relentlessly unpicking your patchwork of security. think you'll spot us? ♪ you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? ♪ >> more than 70% of college students graduated last year and left with an average of $30,000 in debt and as the price of admission goes up it's taking longer for the investment to pay off according to a recent report by goldman sachs. the company is projecting that 2015 graduates won't break even

on the cost of their degree until they are 31 years old. does a college education make financial sense? joining us right now is peter. he is professor of management at the university of pennsylvania and also the author of will college pay off? a guide to the most important financial decisions you'll ever make. what do you think? does college pay off? >> what's good about this is that it reminds us it's an individual investment and to some extent the question that the goldman folks are raising is probably not that useful to you as a parent or you as a student. what you want to know is will it pay off for me because no longer clear that it will pay off for everyone. >> but when you look at things like unemployment rates and people with college degree versus those that don't have a college degree i think about it and want my kids to go to college, is there anything that would dissuade you from thinking the same thing? >> the difference now is its

quite possible for a kid to graduate from college and be much better than a kid without a college degree and still not do well enough to pay off the cost in the first place. so one of the things is that it isn't so much in the u.s. that college graduates get college jobs. kids coming out of college the last few years end uptaking the kind of jobs that high school graduates would have taken and the high school graduates themselves don't have anything to do so is the fact that the unploiu unemployment rate is lower doesn't mean there's not college jobs out there. the unemployment rate is 4% for high school grads and 70% for college grads and the reason is there isn't any jobs for college grads and they don't want the high school grad jobs. >> how much of this is looking at liberal arts versus a math or

science based degree. if you have an engineering degree there's much less of a concern about whether you'll have a job when you get out of school. >> yeah that's probably right but engineers are about 1% of the work force in the u.s. so the idea that everybody should get an engineering degree isn't going to work either. you just flood the market and i don't think it's liberal arts per say. the big thing if you are a parent or a kid thinking about is this is are you going to go for a school where you will graduate on time. no return from your college investment if you don't graduate. only 40% of kids go to school full time and graduate on time. that's a scary thing for parents. but only 60% graduate in six years. so the biggest thing you want to worry about if you are thinking about going to college is is my kid ready to go to college and am i going to the kind of college where they'll get my kid out on time.

if it takes six years to graduate instead of four you're killing that college return and lots of kids never graduate and you still have to pay it off. >> in terms of schools that perform better or schools that perform worse in terms of getting kids out what would you tell kids in general. >>? i think that's available. colleges don't have to tell you whether their kids graduate but they do have to report what portion of their kids graduate on time so you can see that and basically the big news i think is the more elite the school is the better the graduation rate is. some of that is because of the kids but i think more of it is because the colleges make sure

they get out the door. >> it's the way we approach making loan with students. one of the things i always wondered is if there was a free market for student loans and you decided that you would give certain students better rates because you thought there was a better chance they were going to graduate or certain students a different rate because it was opposed to english or russian literature or something like that that you would have a very viable and potential system and also an incentive system potentially for those loaning the money to try to make sure that the student actually graduates and then get ace job at the other end.

does that make sense to you or do you think? there's other people that would oppose that and tell me that i'm crazy because you juan people to be able to take russian literature without having to worry about the necessary economics that might come later. >> the first one is the people making the loans are not the people trying to help you graduate. but the colleges are where those are the places making the decision to help kids get out on time. that's a big disconnect and that's a problem. i think the issue of will some degrees pay off better than others, the problem there is except for jobs that happen to be particularly hot in a given year so it is generally true that engineers are more likely to get jobs than other people but it's not true that people with biology degrees or math

degrees, the other part of the stem thing necessarily are more likely to get jobs and after that it's not so clear what's going to happen to you. the problem is trying to anticipate what will the good jobs be and what are the majors that will provide the job. except for the most extreme cases it's not so clear and it's just a lot of risk. you happen to give a student a loan, a kid graduates in 2009 and would have been perfectly marketable in another year. now five years in the terrible job market but these are financial investments and it's a lot of risk to manage here. >> today maybe not so much. >> right that was the hottest job in the u.s. with petroleum engineering and now it's going

to be pretty much debt. >> thank you for joining us. >> thank you. >> coming up, the ipo play book. the names most likely to go public next year. we'll have that coming up.

>> 2015 generated some of the most highly anticipated initial public offerings of stocks in the last few years r and 2016 could be more of the same, but it may come with the same volatility seen over the last year. expect fewer ipos in 2016 and less cash raised by the ones that do. in the past, the ipo market mirrored the overall target, so with uncertainty about the domestic and global economy looming, the head winds for ipos could be significant in 2016. ipo investors will demand more attractive pricing. the overall demand for initial public offerings softens from the last couple years so investors are looking for relative bargains. look for bankers and companies to set ranges and prices at value-oriented levels to get more demand.

uber and air bnb are the most highly anticipated ipos. we heard about the millions of valuations for these. the well-known brands are among the a handful of offerings that have the power to engage demand regardless of conditions. i say here for 2015, we did in the second half of the year see notable under performance in o ipos that came to market showing volatility. guys, with ipos, it's about whether or not they have the staying power and momentum to come to market regardless of conditions. >> stay with us. be parts of the conversation. bringing in jackie kelly, the global ipo leerader, ey. >> ey. before we get into the ipos,

happy holidays. real ginger bread house? >> it is. >> eat it? it's edible? >> yes. >> becky and cnbc on this side. >> joe and andrew on the oath side. >> we're put together. >> i don't want to ruin it. >> don't ruin it. i want a picture first. >> okay. >> during break. >> i like the -- >> which one? >> a gum drop. >> okay. >> let's talk ipos for a second first of all, agree or disagree with anything that dom said? >> right on trag here with dom. absolutely. >> come on. we want controversy. >> what about this, so he thinks that -- or said that uber and others can ipo, no problem. >> there are certain ones who can, certain brands who can. >> are you worried that in to

2016, there's down rounds? there's fake valuations because of the other things built into those valuations? >> well, definitely valuations have. strong overall, and despite some of the turbulence in the market we've seen, they still held strong throughout the year. the issue here which adds to the concept we have uncertainty is there's so much capital right now helping drive prices up too and keeping prices elevated that in normal circumstances would have been brought down. >> in the last couple months, unicor unicorns should have gone public sooner, missed their window, the window closed on them, and would have been better off taking the cash at a lower valuation. being private was a panacea. now mark came out, he's invested on sales force, and said that he thinks actually the idea of

being private is terrible, that you need to discipline the market, and that's a better way to go? >> i like the fact that the companies are still private. many of them are still maturing. a lot do no have the numbers and profitability you expect out of a company in the public market. you know, having private investors extend their runway is a good thing. >> are the private investors duped into thinking they are quick turns, and, by the way, some don't have revenue and never will. it's the private investors who take the loss. >> private investors are savvy these days. that said, this is not necessarily a short term play for many of them. many of them are not getting out when the ipo happens. this is something they are in for a while. today, ipos that go out, 10-15% of the stock is sold. some of the companies are 98% owned by, you know, investors. >> what's interesting about that too, though, you talk about investors and ipos, remember, these days, more and more it's open-ended mutual companies like

t.rowe price or fidelity. they are not unsophisticated investors that do this. >> they are marking down, though. >> fair enough. they have. but the question is whether or not they can mark up at some point in the future, right? >> right. >> it's an accounting issue. >> what happened to the ipo market historically? i don't know if you look at this, and maybe you have, dom, in election years. >> the market's generally bullish. >> for the ipo market too? same thing? >> so it comes back to uncertainty. to the extent there's uncertainty here, obviously, this weighs into the market because it could slow down and windows could open and close more quickly. first half of the year, there's runway and companies lining up, a number of brand names considering trying to get into the first window, which is late march, early april. >> what's interesting is i spoke e to kathy smith, and she says from their outlook, they got 300 companies in the private company pipe lain that could come to

market and could see a widespread, 100 on the bearish side, 200 on the bullish side. if it's 200, it's more normal ipo market. i'm not bearish, but the setup is the bull and bear case, here's what they are. >> okay. we're going to thank you, domja for this beautiful creation here that we're going to eat in the commercial break. happy holidays. >> thank you. >> joseph, i'll get you the gum drops in a second here. could the fed reverse course and lower rates? we talked about this yesterday, qe coming, coming in cheap, but we'll talk to a strategist who thinks it's not only possible, but probable. straight ahead as we head to break, though, check out the futures, good again so far this morning. you're watching "squawk box" on cnbc, we're first in business worldwide. yeah, that's right, first, right? i asked my dentist if an electric toothbrush

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fed raised interest rates this month, but yellen is forced to reverse course next year according to strategist kumar with his predictions. tale of two retailers, bed bathd and beyond slammed, and nike higher in the premarket. the move driving those moves, and retail winners and losers straight ahead. if you have not finished christmas shopping, you are not alone, millions of dollars of gift cards purchased in two days. who moves the most plastic as the second hour of "squawk box" begins right now.

♪ welcome back to "squawk box" right here on cnbc, first in business worldwide, i'm andrew with joe and becky, and our guest host this morning is walter, the president and ceo of the aspen institute, a cnbc cricketer, getting to walter in a minute. happy holidays and thank you for spending two hours with us. first, becky with this morning's top stories. >> andrew, thank you. a check on oil this morning. wti crude closing higher than brept yesterday for the first time since august of 2010. later this morning, watch for government inventory data due at 10:30 eastern time. check it out now, 36.64 this morning's wti.

brent at 36.61, and now that we can export it, it's a different situation than seen in the past, but still below $37. durable goods and personal income in spending at 8:30, and at 10:00, home sentiment, but the numbers came early when they released data yesterday. consumer spending rose .30 last month, in line with forecasts. futures indicated higher again. looking at triple digit gains for the dow, up 100 over fair value, s&p up by 11, nasdaq up by 25, and we have a couple stocks to watch. nike's earnings topping estimates issue revenue falling short, but the futures orders surged 20% blowing past expectations. among the drivers, strong demand in north america and in china. >> helping the dow. >> oh, yeah. >> i'm told that -- >> 2%. >> i need to be reminded every time. >> me too, i know.

>> did you know? >> i did. you have to remind me constantly. i used to know every single one. must be age i have a harder time with the change or they change more frequently. >> ask me any questions you have or walter. >> with the dow components? >> no, with age. >> age, oh. >> it's wisdom. is it not? look around, you look around sometimes and think i'm glad that i have -- >> yeah. i don't want my 20s back. i like being wiser. >> you didn't say 30s. you still have them. >> no, i don't. 30s were good, but 20s, i was stupid. >> looking forward to the 50s. >> yeah, shares of bed bath & beyond under pressure, citing softer instore transactions, down 6%. >> markets try to make it three days in a row of solid gains coming off a horrible couple weeks, though. in the low 1700s in the dow,

but -- low 2,000s, but tom lee says we're limping into the year end, hetd of research at global advisers, and i feel your pain. we are. also, joining us is president of global strategies, and the fed's going to force to lower rate the in the first half of next year. welcome. >> thanks. >> so, you know, you were talking big. it was not going to happen until 2017 on the fed, and now you said they were not going to raise, and now that they have, why don't you just say, okay, maybe i should have not have had that forecast? you still clinging to it even though they raised. what do you see that makes you so sure it was a mistake and they just have to end uptaking it back and maybe even doing more? what in the economy looks so weak to you? >> joe, give me credit for what i have been saying. i've been saying on your channel for a long time that the u.s.

treasury ten year yield goes below 2%, and if you believe consensus, the ten year yield is between 3% and 3.5%. we are no longer there. we had the people talking about the fed hiking interest rates from 2014 on ward. this happened in the end of 2015. now, even though they hiked against all my expectations, they did it for the wrong reasons. janet yellen told us in september international conditions were postponed. international conditions actually worsened from september and december '16, and yet she hiked. the fed is anything but data dependent. why do i expect it to come down in the first half of next year? this is the market which has been propelled mainly by the availability of liquidity and zero interest rates. we have had no increase in interest rates for almost ten

years, zero interest rates since december of 2008. >> right. >> if you do not have it, this is not an economy which is going to withstand it, even though you saw the consumer spending going up in the premature released data. notice third quarter gdp data, while 2%, the weak was the external sector. i think the external sector is weaker with problems in china in particular, and emerging markets, which are now more than 50% of world gdp are going to be in bad shape in the next three months, and that'll do it too. >> yeah. you know, what he points out, tom, is that the fed can do the short term, but they can't do anything to that ten year, and would it shock you if it went back below 2% even in the face of the flattening yield curve and you worry about a slow down? it's not insane to think it could go back down if the economy is not as strong as

people think. >> i mean, you know, for the ten year to go below 2, you need inflation to stay low. >> really? it's based on inflation, not growth prospects? >> yeah. i think next year, just by matt, inflation picks up, labor market tightens, so i disagree with someone saying, hey, the ten year -- >> it is going back to 100 by 2040. >> yes, by 3,000, it's a million, right? >> even opec, when did they say 70? 2018? >> it's an inflation adjusted number, though. 95 in real terms. >> you think he's full of beans. >> there's two sides to the view, but i think a lot of critics or the fed have been vocal saying that the fed is, you know, the only recent

markets performed well. i think earnings are doing well and corporate america wants us to get off emergency rates. it's a good thing. >> you did have great calls, but you don't want to stay too long. that's what happens to the guys who get married to. you know, to a viewpoint, and you don't want -- if they are all the way up to 1% , you don' want to switch it on fed funds, right? you feel that confident that the underlying fundamentals are that poor they have to come back down and then maybe even do qe or something? >> i -- again, i think coming down on interest rates i think is the first move, joe, even though i'm not ruling out qe. i'm not forecasting it yet. people have been looking for inflation rising for the last seven years. >> right. that's true. >> when are they going to give up on that position? the fed thinks inflation rises to 2 pp%. it doesn't happen. hope is not a substitute for accurate forecasts, joe.

with opec just having said that oil prices are going to be sliding through 2020, i don't see inflation coming to the board at least in the next year, so, yes, the ten year yield is going below 0, and the fed, as you correctly said, can manipulate the short term interest rates, but the ten year is well beyond their control. >> you said below 0? ten year goes below 2? >> sorry, pardon me. ten year below 2%, but in the terms of what is happening in the longer term, sovereign wealth funds, many oil producers, are forced to sell the u.s. treasuries, which will cause fees to go up at the same time the private sector is demanding ten year treasuries as a safe haven and next impact goes down below 2%. >> tom for a second.

i counted on mid to high single digits this year in the s&p. you were wrong. shame on you. we're down. >> it's terrible. you know, i think it's been a tough year because the markets -- >> but it's mid to high single digitals, right? >> yes. >> what got in the way of the forecast? >> well, i think it's been a really tough -- it's tough for markets to look through strong dollar oil and credit, right? high yield's been not behaving. i think that's -- it's impressing the markets, ending the year flat begin the issues. >> a few days left. >> the good news is flat markets are rarely felt by another year of flat markets. >> do they go up or down? >> so -- >> or something different? >> you take 140 years of data, look what happens a year after flat markets, the gains 11, but it's a 5:1 that you're up 10% or

better or down 5% or worse. it's 5-1. more likely to have a double digit year than a year of coal. if it is a year of coal, punch the other side of my arm too. >> i think that's close. could be single digits. >> yeah. >> if he was next to you, i would have hit him. >> we can send it, like, long distance. that's right. just have, like, the camera. >> accounting believed you. >> it's disappointing, yes. >> it has been. it's weird that the fly in the ointment was something we thought was a positive, oil prices. >> yeah. >> thought that flowed through the consumer, but we forgot how much of the economy is based on -- >> that's right. i bet you we'll realize 40 oil is good because you don't bankrupt 20% of the energy sector, but 30%, a fifth of the

oil sector goes bankruptcy. >> talking about energy, in the first half of next year, more of the energy loans are going to go bad, and you're talking about the financial sector of which 16% is through the energy sector, and how do you see the fed hiking when the high yield bond market is in greater trouble? >> yeah. >> i just think the whole thing is unrealistic to keep saying they are going to raise four times in 2015 when the market is suggesting something very different. >> would be hard to imagine they get a clean exit from so much dislocation and accommodation. >> exactly. >> thank you, joe. >> thank you. >> you okay? >> you might see me in a cast, you know. >> might be bruised. >> you have insurance for that? >> he has a week to be right. >> that's right. >> maybe i'll be like opec and

use another year, and i'll say 2055, you know? >> yeah. okay. coming up when we return, thank you for that, we will see you, happy holidays, a new movie bringing attention to the football concussion problem. nfl and athletic companies spending millions to keep players safe. details next. also, talking gift cards. they are no longer last refuge of the desperate shopper, expected to sell millions of gift cards in the next 48 hours. a report card on the shopping season so far. we'll talk winners and losers from 2015 and predictions of the new year, and, of course, walter in a minute. back in a bit. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ [ birds squawking ] my mom makes airplane engines that can talk.

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♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪ xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. welcome back to "squawk box," everyone. futures this morning, and, yeah, maybe santa is showing up just in time for the holiday. dow futures indicated up by 116 points, s&p up by 13, and nasdaq up by 28, and this comes after a gain of 165 points yesterday for the dow. the new movie "concussion" bringing more public attention to player safety in football, but the nfl's been working on the problem for years, investing millions in research and technology with high profile partners, and kate rogers joins us with more on the future of football which is bright, but then there's this. >> yeah, absolutely, joe.

an ongoing problem, part of the partnership with ge and underarmour, investing $65 million over four years awarding entrepreneurs cash to bring ideas to market receiving 500 ideas from 19 countries, narrowing down to three winners for the head health challenge. they turned to invo vaters to solve the concussion issue. the company based from university of washington thinks the key is in the helmet. >> today's helmets just have a hard outer layer and padding underneath. we have a multilayered solution. outer layers work together to deform and slow the impact forces, and the inner layers provide improved fit and comfort. >> another winner is focusing on safer playing fields adding a plastic layer to cushion impact. >> it's a technology that we have been developing, and it actually started in automotive.

the product has been used on 65% of the vehicles for head impact protection and taking that technology and applying it to synthetic turf and military for impact and blast protection for soldiers and war fighters. >> the nfl thinks by partnering with these companies, they can help bring products to market more quickly and make the game safer sooner. back to you guys. >> all right. yeah. helmets. you figure that might be -- i had not thought of that, make them less -- make them so that they protect you better, but maybe not quite as hard. >> brain rattles in there. >> absolutely. >> you feel like you have -- when you have a helmet on, you feel you have the ability to hit harder. >> this one with the multilayered approach, guys, and there's another company working on tethers, not allowing your head to basically hit the ground as quickly, softening impacts as well.

there's many approaches here seeing entrepreneurs take, and hopefully by partnering with the nfl they work on it and resolve it quickly. >> one question for you, kate. is -- would this be good to a company with some rule changes? >> i'm sorry? >> with some rule changes, about how the game is played, how tackling is done, you can do that in conjunction with better helmet technology. >> absolutely. this particular initiative is focused on the intentrepreneursd technology they have, rule changes are not a part of it, but it's what advocates continue to fight for. >> do you think you want to do those two things together? >> yeah. >> you say -- >> you want technology and rules to work together. >> i don't know what additional rules you can put in. >> let's ask -- kate, thank you. >> is there a rule change you think that's in order? >> you see some of the high schools and some even colleges trying to figure it out. there's a harvard study going on. kevin plank is looking at it.

i don't know. i mean, i think that as you look at helmet technology, you don't have helmet-to-helmet, but rules on tackling and what to do. >> do you think the game is under siege? >> yes. it's under siege because, you know, i was talking to one -- i won't say who, but one of your producers talking about this segment, and it was, like, my husband plays football. i got a young son. we want him to play football, but we don't want him to play football. there's so many people talking about being torn here. that's why you want to make it a safer game. >> no shortage of guys who want to play. >> i know. but you want a to be a safer game. >> absolutely. not saying that, but this siege is occurring at the same time of pique popularity across all other sports. >> right. >> head and shoulders above all other sports. baseball has local markets. nba has, you know, curry, and hockey with high depth and 75-inch screens, but football is -- i mean, it's more a

staple -- it's that time of year, too. i mean, i'm looking at the games coming up for -- >> it just got eliminated from the playoffs, so we new orleans people are now, like, change the rules. >> what you have not seen in the whole debate around concussions and everything else is sponsors have not left the nfl or objected. even though there's a huge cultural discussion happening about safety in the nfl, when it comes to money, the money has not walked away or threatened to leave. >> i don't think the game is threatened in any way. >> okay. >> the people who are saying, all right, we have to fix this part of it. >> right. you wonder about the future. i feel the same way. i like watches, but i don't want my kids to play. >> it's a fixable problem. we're not talking about the end of the football here. >> the people -- >> no shortage of talent. >> there have been people who have said, does football go the way of boxing? >> no. i just said it. they said it in the answer's

absolutely not. say whatever you want. i mean, it's -- >> joe -- >> it's -- >> say it a hundred times, doesn't mean there's validity to it or probability of it happening. >> right. >> okay. >> think of extreme sports or nascar or think of -- look at what they do in the suits. you're going to see point break? people do things in sports that are dangerous. >> far more extreme. >> we can go to flag football if you want, andrew. >> yeah, yeah, but -- >> revenue might go down a little. >> look at the people who have been affected by concussions. >> right. >> you do not want that to happen. >> much better environment now in terms of you got to sit out if there's any question whatsoever. the helmet technology is better, not allowed to speer. you're going to get flipped, heads hilt the ground. it's not just head to head contact either. >> right. >> i still would say that, man, it's very, very popular.

i can't wait for the college game. can you believe the two -- no new orleans teams anywhere, really. >> well, we have the sugar bowl coming up. >> right. >> i'm going to be down there for it. lsu had a bad year. >> did he stay? >> i think it's -- i don't know. i should look it up. keep reading headlines about whether or not he's going to stay. >> yeah. great years. anyway, it's not been that long since they won a title. right? where o'dell is from too. >> right. we'll be back. we're the saints. >> a quick pause, coming back, and talking to walter about the economy, politics, technology, a lot of things to do. coming up, losing a key legal battle, may be coming to america. details next. a squawk sports update on maybe the best basketball team from a jesuit school in the country.

welcome back to "squawk box" this morning. a new zealand court ruling that kim.com, his real name -- well, changed to that, but eligible to be extradited to the united states to face charges of money

lau laundering. he was founder of megaupload, and he encourage and paid users to generate profit, and new zealand's justice minister decides whether to hand dotcom over to the u.s. in college basketball, i talked about this yesterday, okay, and so on the 21st, there was a piece out that said xavier might be the best team in college basketball. no, really. yesterday, they were 11-0, playing wake forest, saying the demons would take it to xu last night. i was -- i couldn't watch, espn2, i just watched updates on my phone. at the half, it was 43-28, wake forest. >> oh, gosh. >> down by 15. in the second half, the guys came back and beat wake forest 50-27 in the second half to win by eight points, shot 60% from the floor, five guys. thing with college hoops, you know, there are stars, but five guys that know how to play

together in each score in double digits, and you can get butler, and the small schools, you know, you recruit the guys, and it's just another thing, and there's no concussions, usually, either, and anyway, the musketeers are 12-0, were six before this, and demons were 8-2, and now 8-3. i went to st. xavier high school. they split, and my dad was a graduate of xu. it's like a big homer for these guys, but you should see the five guys they got, and the freshman scored 21. >> exciting to see a team play together. >> next stop, villanova, new year's eve. >> i know what you're doing. >> actually, it's at noon. >> oh, good. good. >> all right. >> a scary moment in the mountains of italy. four time defending world cup champion marcel, austrian in the

second run of the event, when a drone crashed bind him. watch that. almost smashed him. missed him by a matter of a second. he was not aware of the crash while going down the slalom and only found out about it at the end of the run. >> anywhere we're walking. >> i saw it happen to a woman. >> the chances are small it'll hit you. >> do you want it over your head? >> no. from the amazon cargo planes. we said that, drones -- >> i'm in favor of amazon starting boeing planes they are using, not with the drones. more about that in just a little bit. when we come back, it is no longer the last resort of the desperate shopper. the gift card is the most popular holiday gifts. we have stats on which company sells the most cards before christmas. we'll get to that story next. right now, though, as we head to

break, look at this viral video, a christmas card by boston dynamics, a robotics company part of google x. ♪ >> happy holidays from boston dynamics. ♪

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welcome back to "squawk box" here on cnbc, first in business worldwide, among the stories front and center, mortgage applications jumped last week, new figures from the mortgage bankers association. that was led by nearly 11% jump in refinancing activity. also, the u.s. postal service is handling a bigger slice of holiday deliveries than ever before. the service handles 40% of packages this year up from last year's 35%, and four square's

value may have been cut now more than half over the last two years. brief code reporting the maker of the popular check-in -- it was popular, now discussing a funding round that raises $20 million to $40 million with a new investor to value it, and it's an estimate of $650 million back in 2013. >> people flock to the apps and flock away. >> and can start a new one tomorrow. >> no longer seen as an afterthought, gift cards are a last minute option for procrastinators out there. mary thompson has a look at this season's gift card giving, and it's not just procrastinators? >> no, no, not at all. we read the other day where starbucks hoped to sell more than 2.5 million on christmas eve alone exceeding last year's record. however, even though it's a lot of cards, it's not enough to put

them in the top five gift cards for 2015. starbucks is the seventh most popular card. the top gift card this year, according to card hub is visa followed by amazon and american express. now, this year, card hub is forecasting annual spending on gift cards up 6% to 131 billion. giftcards.com say that's good news for retail rs and restaurants because they spend 20% more than they were gifted. general purpose cards probably because they use wherever they want to. the most popular place to spend them is at restaurant. then gas and electronics, and apparel and other general purpose. walmart a popular choice for branded gift cards, it's the top destination for general purpose cards with under 5% taking them to the nation's largest retailer

followed by mcdonalds and jcp. with all the concerns about the fraud in the card industry, how gift cards are safer from loss and theft later today. >> all right, mary, thank you. >> did you buy gift cards? >> i'm not a fan. just -- >> they are not personal. >> i forget to use them. i found, actually, like 25 i got. >> the average american, statistic is they have $100 in unused gift cards. >> you can get the money back online by selling them. >> you can give to charity. >> right. >> i saw one in seven people in the country will get a starbucks gift card. amazing. >> in their stocking. >> by the end of christmas, donate them back. >> i shouldn't say i don't like them, i just am bad about using them. that's the biggest problem. >> jamming the wallet. >> i notice in the card where

it's sort of a mast eercard but can transfer and add money to it, so it's almost somewhat close to giving cash. >> the other thing is the digital gift cards, if you put them on a mobile wallet, that makes them more accessible, and that's digital gift cards. >> i just don't remember i have them half the time and walked in the store where i have them and buy stuff without using them. >> well, you know, you think about walmart.com with the mobile walmart, if gifted a walmart gift card, walk in the store, check in, they say, assuming you have your gift card, it works. >> that's the next thing to be disruptive is a financial tech thing where, you know, like the next generation where you give money, put on your phone, give a gift, puts it on the phone, all aggregates there and circumvent complexities of cards and banking accounts. >> right.

>> i just want it all on the phone. >> money used at one place and forget you have it. >> unless it's a visa or american express or mastercard. >> that's true. >> you get loyalty points. somebody just aggregate it, take all points you earned on american express, hilton, and gift cards you are given, and put it into a wallet in the phone, and you just touch everything. >> not sure it's that far way. >> that's right. that's next year's big story, a year from today. >> mary, thank you. >> sure. joining us to wrap up the year in retail looking ahead to 2016 is janua, ceo of worldwide enterprises, and this has been a difficult year for many retailers, particularly department stores, anybody who's trying to sell apparel, partly the weather, but is there a bigger change taking place? >> for sure there's a bigger change taking place. the weather has been totally uncooperative. i've been all over the country looking at stores. average temperature is 20 degrees above normal. i left my coat in the car. anybody have one this morning?

no. is that a problem? absolutely. that is hurting sales. it's causing inventories to be too high. there's a lot of issues selling everywhere, inventories in scarv scarves, mittens, and sweaters, a big deal. however, another big deal, of course, is penetration of online and depenetration of off price. as i said to somebody, next year, the weather's going to be better for sales, but the penetration of online is going to be higher, and penetration of out of price is going to be higher. it's still going to be a difficult year for brick and mortar retailers. omnichannel retailing will be no longer be called that, and things that are not omnichannelling are odd balls. that's come. i predicted in things for 2016 we would stop saying "om "omnichannel" because it's just online. people not playing at the same time with global inventories, shop where you want, return wherever you want, they are odd

balls and people losing market share. >> you wonder around shopping malls the past couple weeks, right? it seems that people hanging around malls is down. >> about 11% in the fourth quarter, at least 9% when we are finished. biggest selling day, this year, was this past saturday. it will not be between now and christmas, and day after christmas is human because it's a saturday. last year was a friday. we'll see continued traffic, but i don't think we can be better than 9% down in mall traffic, the worst quarter of the year, and it was last year. when you're down 8 or 9 on top of 8 or 9 and down the prior year, it's going to be very, very difficult if you're one of the malls in america. it's not a problem if you're garden state plaza or roosevelt field or king of prussia or south coast plaza, the top ten malls in america, but if you're

a b-minus, count-plus. >> seeing decline of shopping malls? withering away? >> there's 111 closed malls. we only need 800 enclosed malls. yes, there will be lower end malls going away. the other thing that will happen, this explosion we've seen of outlet malls, i think this is the year we start to see them not explode anymore. i don't think we need more malls. we don't need a lot more enclosed malls or outlet malls. we have plenty out there now. >> you know, the front page of the "wall street journal" has a storytracking, and you have too. amazon seeks ties with ups. stories about how amazon's thinking about drones now, looking at its own boeings to lease to deliver its own things. is amazon going to become its

own logistics and fulfillment center all the way to the doorstep? >> they are not making money in retail, but they a smart retailer. and as we look at retailing over all these years, if you depend on a third party to provide all services, it's hard to know if you get a good deal unless it's competitively bid. if you run part of that yourself, which is what they are going to do, you're much better negotiator on getting the best deal on that service. i don't think their intention is necessarily to run all themselves, but they want to run enough nelthemselves so say, wen ramp you up, phase you down, put pressure on the pricing. they can do things like cover points when they are too busy, which we see this time of the year. i thought it was a smart move. i also think, though, it's another good evidence that amazon does not try to make money in the current year. they just always reinvest for the future. this is another case where they are going to buy airplanes or

lease a bunch of airplanes and invest for the future. no current earnings. >> another company for you, i root for him, but i don't know how well they are doing, j. crew, a company struggling over the past few years after what felt like a new york rise for a period. what happened? >> huge fan. i think he changed the face of retailing. he's legendary merchant prints. he's not doing well at j. crew right now. the j. crew business is not strong. he knows it. i heard him talk about it regularly. it's clearly out of its pricing. there's competition from low end guys. >> selling the company aier or two ago. >> he had an opportunity to sell to me a few years ago too. it was before mickey, but we looked at the business, j. crew, is legendary, right? we knew it was an entree for online retailing because you can sell it online, and, yes, i was a little surprised they didn't sell it years ago because i

think, you know, from what i heard him talk about, they have seen the handwriting on the wall. they know it's getting tougher. i mean, you saw what les did? exited apparel retailing, sticking with bed and body works and with victoria's secret. well, mickey's right in the heart of the problem, right? it's women's apparel for not teens, just the heart of the business, and that's getting hit really, really hard by fast fashion and off price. that's not going away. unless you're so much better than everybody else, it's hard to make it in that sector. i mean, you know, that's the same place where ann taylor and loft is and white house black market. they are in there just getting creamed by the fast fashion guys. do i think he's a world's greatest retailer? i do. do i think it's working right now, j. crew? i don't. >> thanks for coming in. >> wwe. you named your company worldwide

enterprises. that's a big name. you know what was taken, wwe. have you heard of that? >> after a few drinks, but it worked out great, you know? >> worldwide is big. >> absolutely. i have clients in new york, philadelphia, hong kong, nassau, san francisco, chicago, st. louis. >> wow. >> it is worldwide. all right.

welcome back to "squawk box" this morning. small business turning to alternative financing for loans after being turned away by big banks. it fell 16% from 2008. the next is the ckayak of small business lending, providing $1 billion in financing to over 26,000 small businesses since 2005. joining us right now is steven, founder, good morning to you. >> morning. >> what's happening here? why doesn't jp morgan or bank of america want to give a loan to a small business anymore? >> well, two reasons, time and efficiency. it's not economically efficient. >> it's a bad business model to make a $30,000 loan. we process our applications in five minutes.

jp morgan can't. we're automated. on the platform, we have a much wider array of lenders with people with different credit boxes so it's not just modelling to one -- >> you're part of the thin tech community. you talk about how it's -- >> big thing next year. >> up end banking across the board. i'm surprised that the big banks have not tried to buy you or buy firms that can make that loan in five minutes the way you can. why haven't they tried to do that, you think? >> i think this 2016, you'll see more collaboration than you see now. jp morgan chase did a deal with on deck and cabbage with ing, and sometimes it's easier for them to work with and collaborate than necessarily buy or build. >> are standards looser? harder? >> on our platform, people come in every day with looser standard products and tighter standard products. we integrated with 45 companies now, and people and better and

better credits, talking now of national banks who want to be a part of the program trying to figure out how to make a loan without being face to face in do it automated. >> do you have hedge funds and others on the platform not making loans? >> buying secondary. >> nobody's trying to jump in? >> that's correct. >> because you see the other sites where you have hedge funds on the other end of the loan directly. >> that's right. >> what type of new technologies like distributed ledgers might totally disrupt this industry? >> big data that allows to get the key strokes to the merchants. our ability to access people's quick books accounts are zero, and someone we're working with, that type of technology will be disruptive because it allows us to really speed up that process to make that front end of the system so much easier for our user. >> things like the block chain that would help people get into

the world, that's disruptive? >> somewhat. a little outside of our space. we're b2b. >> industry-wise, in terms of new kind of companies, is there one space you see more things spring up? >> we're seeing people pop up in the medical space. to finance folks in the medical space. >> technology oriented companies tradition traditionally? >> finance companies coming in who understand that and want to finance the receivables with the new regulation and legislation that's coming in on insurance side. doctors wait so long to get paid that cash flow is becoming a real item for them, and are hsaing thes, they just want to access the information. >> is there an industry, maybe energy, where you see defaults? >> energy and related sectors in the ecosystem is something we are really looking at carefully. much like we did real estate five, six years ago. >> what's the default rates

like? >> 6%. >> thank you. happy holidays, appreciate it. >> thank you. >> good luck. >> good luck. coming up this morning's big movers, stocks to watch next. proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.

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selling prices of the chips. shares of cellgene boosting, u.s. patent litigation, and that's up 6%. church and dwight replaces altera. it's being acquired by intel. >> okay. it's the season for planes, trains, and automobiles. nearly one in three people in the united states expect to travel between today and january 3, and more than 91 million will be on the road, and 6 million will fly. total holiday travelers this season top 100 million for the first time. when we come back this morning, top strategists from citi and deutsche bank have predictions for the new year. tobias and david on set after the commercial break. we'll be right back.

can santa make it to town in

time for christmas? european, early traying, futures positive on the last trading day. walking you what through what to expect with the chief equity strategist. >> breaking news on the economy, key data that could move market 30 minutes away. breaking down the numbers and talk about the health of the economy. >> better believe it, the mentalist wowed "america's got talent." >> got it? say hello to ms. oprah. >> wow. >> joining us with the unique story on how he left wall street to read minds as the final hour of "squawk box" begins right now.

the futures, dow, opening higher, 117 points high, and that has d nasdaq higher as well, and s&p up 12 higher. europe overnight, where things stand now, dax up -- everything up across the board, dax up 2%, cac up 2%, and ftse up over 2%. >> the top stories this morning. mortgage applications, rising 7% as fed moved on rates. driven by 11% increase in prefinancing activity. oil outlook, among the headlines, reports suggest that

prices will take decades to recover. will still not reach peaks seep in recent years. wti up by 63 cents. 36.79, does not sound like a lot, but above lows we've seen of $34 and change earlier this week. big news for beetles fans today. the fab four's music available on streaming music services starting christmas eve. reports unlike taylor swift, the beatles' songs available on free versions like spotify. nike's earnings topping estimates, revenue fell short, but futures orders surging 20%, blowing past consensus. drivers are strong demand in north america and china. >> shares of bed bath & beyond under pressure. a great name. >> infinity and beyond. >> how much better is that than linens and things, bed, bath, and beyond, they could sell

anything. cutting the earnings and sales forecast, citing softer in-store transactions. next rainy day, we go again. right? >> shopping together? >> yes. >> we could spend hours in there. >> bed bath & beyond. >> love to watch that. >> start on one side, but sometimes we don't make it halfway through the store. >> comeback of the malls we are worried about. >> the duvets. >> all the quilts they have. >> the demonstrations of how the water goes through the filters. >> wear cameras while doing it so we can see it. >> we should do that. >> periscope it. >> it's done. set a date. >> all right. another rally for the dow. the index gaining triple digits for the second straight session, 2% away from turning positive for the year. joining us now is tobias, citi's chief executive strategist, and david is deutsche bank's

strategist. great to see you both. triple digit gains for a couple days for the dow, potentially, if we stick with the futures this morning, but it's a down year. that stinks, david. >> down as of now. we've been cautious on market all yearlong for 2015, the market has a further rally, santa claus rally to get to flat, up for 2015 slightly. more positive for 2016, but from my perspective only because of health care and technology stocks, which i expect to generate strong gains, i'm not happy about energy, industrials, or materials. >> you don't think that turns around, oil prices do not rebound 20% and that pays off? >> if they rebound 20%, that's app oil price in the low 40s. you need $50 a barrel to make energy stocks fairly valued. >> tobias, tom lee was on saying if this is a down or flat year, that means that we are five times more likely to see app up year next year than a down year, what do you think about that?

>> so, i look at the number of instances that we go back and that's one of the problems within the studies, there are not that many periods with two years down, and say, hey, a good year after that. you know, it's statistically shaky. our model, something we spend time on sentiment, generating 60% probability of up market next year. we did not start 2015 with that signal from our metrics. that gives us comfort looking out to the year. i guess i differ with david a little bit on -- i'd rather be trading energy, not health care. health care is too popular view on the street. energy is the most held in contempt group, and in terms of what predicts prices, this is more subject, but when we back up to quantitatively, energy, particularly, integrated, splarsplar services look interesting, and health care just does not.

>> david, what do you say to that? >> well, a couple things. i guess we agree on the idea that even if it's a flat year in 2015, hard to know what happens in 2016. it's rare for the market to be flat or down two years in a row outside of a recession. >> right. >> if there's a recession, market is down, will be down, and in 2016. >> recession? >> highly unlikely, although u.s. growth is slow, focused on terms of how much the s&p goes up next year, earnings growth. avoid another year of a profit recession. we have to see better sales in earnings growth from the s&p. i think the s&p can get close to 5% earnings growth, but at these oil prices, it's a reach. now, the point about, you know, where is the, you know, risk-reward? we just see all risks at the energy sector. when i worry about earnings disappointing, i'm terribly worry about energy and also industrials. >> look, i don't know where oil prices are going to go. no one does. >> sure. >> if up 20%, doesn't that, low

oil prices, by itself help out energy earnings on a relative basis? >> on my math, about $45 oil prices translate to a pe multiple of 25. i don't want to pay anything more than 15 times earnings, normalized earnings of the energy sector, prices need to be close to 60 to justify that. buying energy now is making the assumption that oil prices rally towards 60 in the next 12 months, not unreasonable, but i don't like the risk-reward. >> can i ask a broader question on oil prices? we said it four or five times today. yes, i know how it affects energy stocks, but what is the great price for oil to help the economy? i mean, it's gone down a little bit too much, maybe 34, 35, but if it gets back to 45 or 50, is that too high for the overall equity market? >> as a member of the united ward. >> well, look at amazon. >> a lot of that is oil prices.

>> look at united airlines, it's orio oil prices. if you are just rooting for america, where do you want oil prices to land? >> sorry, go ahead. >> it's a complicated one. what's the good and fair price for oil? my rough guess is $60 where energy kpcompanies make a good profit, better cap x in the space than we have now, but pointing out that in this stage, near the correlation, the degree to which oil prices signal what's happening in the economy, that's washed out. oil prices are no longer a signal of what's happening there. >> it's a signal, supply, not demand. signal of something. >> it's mostly supply. >> okay. >> i don't think it's telling you much dr. >> about demand. >> global demand is down. >> right. >> china and brazil. >> the point is it's down 20%. >> thinking about growth. >> right. oil price situation is about

supply. i'm focused on the euro at this stage. i want to see what the euro does. closer to 1.10 year end, we are more comfortable in the idea earnings are up next year, particularly health care and tech. >> i look at this another way. $35 or so, even the most attractive shell projects can't really get off the ground. 45, more expensive shell projects can start lifting. somewhere in that -- 40-60 range is where prices filter around simply because of that supply dynamic we are talking about. then, you know, depends where you are in the country, if you're north dakota, you want higher oil prices, man hat p, you want them lower for purposes of, you know, having consumer spending power. you know, it's only 6% of the s&p 500 earnings now, down from 12% a year ago. >> yeah, but every company in america is affected by oil prices somehow. >> to some degree. >> up or down. >> it's capacity issue. if you're an airline, and there's tight capacity, raise

prices at the same time that your costs are coming down. if you're a trucker, you pull fuel sur challenges coming in or off -- >> somebody pays the prices. >> sure. >> the passenger or the person taking delivery of the product. >> like the weather currently, right? bad if you sell sweaters and shoves, but great for lower heating bills to spend money elsewhere and fill stuff under your tree. >> overall, looking at 2016, the markets right now, upyear? >> up year, earnings up 7% with the market pretty much giving the same return. >> 7%. you? >> high single digits, but expected 15% gains out of health care and tech and most of the rest of the market low single digits. >> all right. great to see you both. thank you. >> happy holidays. >> you too. coming up, federal reserve in the cross hairs as sieb r attacks come. laterest warnings from the inspector general and what's at risk and later, the deadline passed for your presents to arrive by the 25th.

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dow opening up 111 higher, nasdaq up 25 points, and s&p up about 12 points. neck news this morning, google building a messaging application, saying the company trying to compete with facebook and other rivals. they are expected to use artificial intelligence expertise integrating software programs that answer questions inside the messaging app so you are sent a message and predict what your answer should or likely would be. >> ask about oil prices. >> ask siri. >> let's try. >> good experiment. warning from the inspector general for the federal reserve about the central bank's cyber security risks. we are joined now from washington. >> reporter: good morning, becky. yeah, that warning comes from the inspector general of the federal reserve, released in some reform only yesterday. they said the information in the

actual report was simply to too dangerous to put out publicly, so they put out a summary saying the federal reserve has taken a number of steps to tighten up cyber security, praising for that, but the star data base system used by the federal reserve has a number of as a rule nermts that need to be tightened up, citing six areas where improvements are needed in terms of cyber security for that system. what is this system? they said the star data base system in question here processes data for statistical reports. they said that da 15 is used then to construct public reports and among those public reports are the monthly consumer credit numbers and weekly report on reserves of deposit institutions. that potentially threatened here by cyber attackers who might get access to the data if the areas are not tightened up. the fed, we asked them for their take on this. this is what they said.

they said, we have accepted recommendations of the office of inspector general and are addressing all of them. so, guys, it's unclear here how much danger the fed would be in if this system was braeached. experts yesterday said one of the things they are seeing in cyber roogt night now is hacker more sophisticated than the old breed who stole data and profited from it. others go in into various data bases, corporate and otherwise, manipulate the data for an untoward end. that's the concern with this system over at the fed, and, of course, cyber security is a concern, joe, at the fed for a long time. they had an incident back in 2013 as well in which anonymous stole data from the fed. something to watch. a warning shot across the bout here to the fed from the inspector general, joe. >> yes. trying to think of how you could -- hack into the fed, how you could -- i guess you could mess things up. they have done a good job, some say -- >> expand the balance sheet.

>> yeah. >> expand the balance sheet. from, like, $600 billion to $5 trillion. >> can you imagine? what happens then? >> yeah. all right, thanks. >> you bet. sitting here thinking, because, you know, walter issacson is here, our guest host. aspen institute president and ceo. also cnbc contributor, and i want to be of good cheer, i'm trying, i'm trying, but -- you're a big thinker, you know, ideas, all that stuff at the aspen institute. just looking around at the current whatever you want to call it, and just a couple of things that -- before i ask you a question. washington post today, the quiet impact of obama's christian faith. the president's convictions led him to believe he could unite a divided country, and why he failed. i would say not just failed, but more divided than we were seven years ago.

yesterday, brett stevens, a republican basically, wrote a piece in the journal said elect hillary clinton now because the gop has been moved so far right for whatever reasons on immigration it's almost going to happen, like, night fall is day, they are going to run someone who is going to lose, just do it now so that the republicans can complain for another eight years. a piece today, walter, talking about the greatest republican revolt. the angriest people in america are the middle americans, white guys without a college degree. they are suicide, horrifying rates of suicide, substance abuse. they have the most fatalistic view of their future in the history of the country. how did we get here in the election season we are in now? >> all connected. the most important thing is the last thing you said, which is it used to be in this country that you could play by the rules, get a job, know your kids were better off than you. we had app agriculture economy.

you know, 120 years ago, 20%, 80% of the people worked, you knew you had a job, then moved to the industrial economy. people said, okay, move from the farms to the cities. they got the jobs in the factories, worked, pensions, sick leave, put the kids through college. nowadays, there is a total hollowing out of the middle and working class. >> so these people -- so for everyone across the board, and in other parts of the world as well. better than it's ever been in terms of convenience, in terms of safety, security, maybe not, you know, obviously, there's isis, but in terms of, you know, even leave time, not many people starving at in point. when we moved and -- >> we moved a lot of people out of poverty. >> we did, but as we move from -- as technology moves us from jobs being destroyed every

time, there could be reason for hope with technology. this is going to end up -- we're going to export to the world and that everybody's level of existence is higher. why a view that i think we're going to be replaced by machines or artificial intelligence? >> well, i don't share that view. i think technology is always driven new jobs. >> why is it hollowed out then? >> work and regular corporate jobs are hallowed out in america. what we need to do, and people like tim cook have said how we need more engineers to train. somebody elsier on the show talked about college degrees. we don't need to turn out that many more engineers because they are not engineering jobs, and -- no, that's not true. if you turned out more people who could do manufacturing, figure out jenengineering, more skills in the work force, more vocational and technical training, that creates more jobs in the country and technology makes us productive. >> these are the same guys mad

about immigration, that see immigration -- >> of course you're mad about immigration. >> all ties to the. >> correct. >> i just have one argument, which is that the middle class that we keep talking about sort of the lever it to beaver middle class panacea people talk about, i argue to you historical aberration. a big problem where we live today. the middle class labor unions, all the rise in the middle class, 1940s, '50s, check the box, it worked out. it only worked because the country was without business after world war i, and we used that power to raise the middle class, but i'm not sure, arguably, it's a sustainable middle class. >> you can argue it was more than a century. >> because today -- go back to the 1920s, forget about it.

>> we were driving the industrial revolution. >> poverty did not exist in the same way. there was debt taken on during that period, and the only thing i say -- the suggestion i'm trying to make is now that you're living in a competitive global environment, the next 50 years, i argue, in the developing countries are going to lose rather than gain, and that's the great challenge. >> strictly, you know, urban areas that you are talking about where you see the scourge of poverty and no opportunity, that's one thing, but drive across the country, and drive through kansas, and there's people up every day going to work, going to baseball games, going to see the chiefs play at arrow head. there's still middle class, people that have jobs, 5% unemployment, still there. people are employed, but there's something that feels bad in this country right now. >> you don't feel like you're going to have that same job for 20 years or ten years. >> by the way, that's right. that's why i think the poison in the politics and even the rise

-- >> that's what i'm getting at where we are now. >> will recede. people in this country are basically kind, basically generous, join the rotary club, part of the pta, and in the end, they are not mean and -- >> the problem is it's a wage stagnation story is what it is, and that started in 1979. that's when wages started stagnating and the rest of the world came online. >> i don't think that's all the story. >> that and insecurity of getting a job. wage stagnation was bad, also in the fact we're in the time life building. i joined time inc 32 years i worked there of the it is impossible for most people with a college degree to say, i'll have a 32 year career at one company. >> we're in the time life building, but time life is no longer here. >> that's another signal. >> right. yeah. >> we got to go. continue the conversation, it's a good one. when we come back, is t-mobile interfering with youtube's

traffic? more after the break. seeing is believing. went from working on wall street to reading minds and performing magic joining us for what i'm calling one of the best segments of the year. you do not want to miss this. stay here. we're coming back with those. you're watching "squawk box" on cnbc, first in business worldwide. slp

welcome back, everybody. youtube accusing t-mobile of interfering with video traffic. the wireless network operator recently began offering a program delivering video at lower quality in exchange for waiving related data fees. youtube says t-mobile reduced quality of videos that are not part of the program including youtube clips. >> a man from the bahamas arrested and charged with hacking at least 130 sleb celebrities, held without bail, accused of selling and attempting to sell unsold scripts, sex tape, and e-mail, the hacking victims include movie and tv actors, a casting director, popular singer/song writer, and a hip hop artist. >> wait a minute, celebrity sex tapes? >> he has. >> uh-oh. >> getting nervous? >> if i were a celebrity -- thank god we're below radar.

>> was not a male. >> all right. >> morning tv anchor. >> we're safe? >> yeah. >> he's going after the fed next. coming up, economic data that moves markets in minutes. heading to break, look at u.s. equity futures up 122. (politely) wait, wait, wait! you can't put it in like that,

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we're just seconds away from durable goods and personal income data. rick santelli is standing by at the cme in chicago. rick, take it away. >> all right. even though anything with .gov was out, we have the no read on durable goods, and orders were expected to be down .60 on give back to last month, but a strong 2.9, unchanged, unchanged in this instance, 0.0 is a good thing, down .10 stripping down transportation. down .40, not a good thing. last month, shaving 1.3 by half up .60. shipments versus orders, news is

worse, expected up half a percent, but down 1%. you know, this is not good, especially if the average it together, headline expectation, and even though bea.gov did release data preliminary early, i don't know, all details, but give it to the people that did not visit the website. income up .30, spending up.30, close to expectations, no revisions. what are we left with? basically 2.25 on the ten and close to 2.17 last year, two basis points under 3% in the third year closing at 2.75 last year. 1.71, and closing at 1.66 last year. up 8 .5% on the year, and andrew, do you want to see what makes the middle class tick, come out to the suburbs of chicago for a firsthand view.

>> i would love that, sir. i'd be happy to come to the windy city. >> we have too many people trying to get in the psyche of the middle class. that's me getting in the psyche of harvard professors that live in an ivory tower. >> yeah. people live in cocoons. i mean, how would you if you're surrounded by manhattan 24 hours a day, it's hard to understand any life east of the hudson. >> leave it to beaver is foreign to areas of manhattan and california, but they are not foreign in between. they are not. they are the real deal! >> right. i know. until i'm blue in the face. thanks, rick. more reaction under the data. steve leisman joining us now with our guest host, wall ter issacson. >> focus on the consumer, it be the christmas season and the consumer being all important. cue the christmas music.

♪ >> following a strong .4%. only way to make it interesting. here's what's interesting about this. wages and salaries have a second good month. we're at .6% in october, up .5%, and, again, they are not spending as much as they are earning here, so the savings rate in the country remains relatively high. we did 5.5% in november. consumption up .3%. more to save, and consumers are out there, they are spending and benefitting from lower or relatively modest prices. feds' preferred inflation indicator, the pce priced index, overall unchanged. year on year, the core rate up 1.3%, and the same as last month, and 1.3%, which means, by the way, that your real spending number, inflation number up .3% after being unchanged. that's good. i can't say such good stuff,

however, about what's going on in the durable goods department there, and i lost my table. bottom line is it looks like it was beating if rick reported correctly because of the surge in defense spending. other stuff was negative to down. x defense minus 1.5, metals minus 2%. communications up. electrical appliances up, sign of decent home building, people buying appliances, motor vehicles up 1.5%. key spending down .4%. we have a divergence in the manufacturing and services sector. i put together a clahart showin that. there's an manufacturing one. you see that manufacturing index falling. that shows up in the durable goods numbers today. services are pretty flat and off the highs, but still at a strong level. what happens in the economy when you have this divergence?

i look back to 1998. there's been three times it's happened. once preceded recession, one in the middle of the recession, and once nothing to do with recession. the question i throw to walter, we were challenging the manufacturing sector, hear it from the people who do it all the time, because of the strong dollar, because of weak overseas growth, can the economy with stand this, and, uply, manufacturers, the small part of the economy, does that bring it down? >> you know, i think that it would be good for a long term plan to bring manufacturing back to the country. you know, as joe mentioned, good points about business, job creation being demonizedemonize. if you had great productivity gains, i think that would help the manufacturing sector. >> one thing seen is equipment spending was changed in the first part of the year, coming back a little bit, and journal put it nicely with a great game

of chicken going on between businesses and consumer. each is waiting for the other to do break-out spending, and businesses do not spend because they are not sure the consumer is there, and consumers are not spending because you pointed it out, they are not sure their jobs will be there. there's economic uncertainty, and how do you put that away? >> you know, there's so many reasons for the uncertainty, but, you know, it's looking better this year. i think that as we go into next year, you'll see wage growth. you'll see people calming down as long as there's not great extra shock. one of the great things in washington is even in washington now, you get budget deals, transportation bills passed, and i think that whole notion that we're going to go under, that we're sinking, has receded, and i assume that comes bag in terms of confidence. >> everybody we talk to says the normal one thing to do is tax reform, and you heard from democrats and heard from the republican, and as far as i can tell, the difference between

republicans and democrats is 3%. >> right. >> one guy wants 28%, another 20%, another wants 25%. in the old days, settle in the middle, but they can't do that anymore. >> paul ryan will get you there more easily than they had before. he's somebody who wants to make things right. >> is that enough to do it, though? for example, the yuan in china is deappreciated against the dollar, so things are getting more than rather than less for the american manufacturer. >> yes. you know, currency fluctuations are not going to drive everything to the next two or three years. i think it's bad now, but i think if we can get both our fiscal house a limttle bit more in order, that takes a year or two in order to get through the election, and rise in manufacturing, rise in wages, america's still, by far, the strongest economy with, you know, the best work force. >> we have a challenge that when it comes to productivity, and that's really the key to how we

live, and the question is whether or not we're measuring productivity correctly or investing in the stuff that gives us productivity, and that's an issue to look for in 2016. >> it would be nice to have more investment on things turned on investment, even government investment on air traffic control, airports, on highways, on our infrastructure, on our schools, especially with money being this cheap, if it gave a good return on investment, made for more efficiency in the economy, and that would -- it would seem logical to have that, and i think you're seeing some of that more in washington now. >> cool. happy holidays. >> optimist. >> joe pushed me of all things. pushedoptimistic. >> no. >> i'll give you optimism. we have the coolest segment coming up. >> i know. >> a one time financial wizard ready to leave you speechless. i promise this will happen. we list you do not want to miss this. amazing. back in a second.

welcome back to "squawk box," the wall street mentalist, disappearing act, he has a client list like politics, celebrities, fortune 500 ceos. joining us now the "america's got talent" finalist, and i've seen you in several venue, and you blow me away. i don't want to oversell it to the audience, but you do this thing. >> it's mutual. >> first of all, so we understand, you were on wall

street? >> wall street. former merrill guy. you and me both. >> that's right. >> you have a trick? >> wall street mentalist, a fan of you guys as well. >> thank you. >> reason is, joe, day in, day out, stocks on the mind, morning, noon, and night. you are deep analysis, past quarterly earnings reports. past the fundamentals. think a company. something big. i want large cap. large cap. right now, go ahead, yell out the company on your mind, and, by the way, consumer spending is up. i brought you a gift. i do not show up empty handed to "squawk box." yell out the company. >> okay. i'm worried about it. >> are you? >> about how much i owe. american express! >> folks, american express. >> how did he do that? joe, did i ask you right before you came on to change your mind, think of any company. >> could have done anything. >> now, the key here is people ask for stock tips all the time. if you do this, tell me the stock. problem is the market's vast. what i'm good at is reading

people. you get me in the room with yellen, i koicould tell you abo the hike. pretend you run the fed -- >> during a commercial break, he said pick a number. any number. we have not told each other. >> did you write it, say it, anything? >> nothing. >> imagine it's in bright lights, you see the lights. okay. andrew. what is that digit you're seeing? >> i saw 2. >> ladies first. >> what was your number? >> 3. >> yeah. 3. >> yeah. >> if you ran the fed, they would be killing my bill because we'd have a 3.2% interest rate hike. >> how did you know that? >> that's crazy. >> what are you doing to the mortgage? a quarter point, you go 3.2. for you to keep, matches the dress lovely. >> what else? >> what else do i have? i'm going to see -- >> did you know we wouldn't change your minds. >> i was hoping so. are you kidding? i have 80,000 of these all over

my body, these gifts. joe, attempt to read becky's mind. >> okay. >> okay. >> becky's like, i don't know want him to know. >> we're not going in deep thoughts. it's a feeling. >> i always feel like i'm naked. >> naked? let's keep it cnbc. >> we've known each other a long time. tickle on the cheek, it's like you are connected twins, feel a brush on the cheek. >> okay. >> if i give you a tap on the shoulder. did you feel anything joe. >> no. >> do you know why? >> because i'm not country city. why would you have felt that? lock eyes. lock eyes. turn you a hair. joe, close your eyes. did i tell you anything about this moment? what you would feel? what you would do? did we set it up? >> no. >> it's like with you yawn and somebody else yawns. have you felt anything yet? >> no. >> whatever i do to becky, it should have traveled through the air waves to you, joe, and if

you don't mind, wake up, open your eyes. what did you feel? >> on my chin. >> are you kidding me? >> no, i did. yeah. >> he didn't touch you. >> use it wisely. these two guys in the panel to get out of line, have them shake hands, smack one of the two. aisle give you the power. >> really? >> you believe that? >> no, i did. >> he did not come anywhere near you. >> right. did he touch your chin? >> yeah. >> i brushed her chin with the card. >> the card. >> he did not come near you. >> i saw it in a restaurant, looked at her, made eye contact, massaged my own shoulders. >> wow. >> you felt that? >> i did. >> do that to me. >> i got to leave you something for next thyme. next time. >> what else? one more? do something else. >> one more, huh? >> that was good. >> no more cards. >> just reading the minds. how about this -- >> okay. >> you thought of a number. >> yeah. >> let's make it bigger and better. >> okay. >> one digit. >> one digit. >> step up the game.

andrew, pick a number, 1-100. like multiples. think of a number, but this time, change your mind. >> okay. >> last time, change my mind, do whatever you want. >> i got a number. >> meaning, becky, joe, could they clue me in? >> no. >> no. he's not going with 2 again. he's going to go higher. i go with this. grab the pen. two digits this time. >> yes. >> i knew it. they were not the same. not doing 66. what did you go with? tell me. what was the number in your head? >> tell you sm. >> i hope i'm close. >> 88. >> did i call that with the two digits. >> 88. >> i wrote down 88. >> how did you know that? >> oh, my god. >> this time, andrew, look at me. think of your atm pin code and social security number right now, absolutely, we're in business. let me grab it. pen back. just sit there. be amazed.

>> this is not ridiculous stuff -- >> she's worried about what else i know. >> a little. >> his pin code? 1234. >> that was it. >> i want to know how you felt that. >> when he did that, did he go -- >> didn't touch you. >> further away from you than he is right now. >> all right. you know what. i believe in lot of stuff. >> did you hiptize him? >> i did. i drugged his coffee earlier today. >> joe's going to fall asleep at 4:00 a.m. >> it's the kris mchristmas sea. >> at the last moment, you went 88. >> i said 88 in my head, in my head. you just -- right in front of us. >> you're predictable. >> i don't know about me, but you are. >> consumer spending. >> keep the paper. >> joe watched him write it.

>> no, i did not see him write that. i don't know how he did that. >> i don't know when you would have written it. >> app drew's going to watch this over and over again all day. i love it. i got inside his head, a splinter in the brain. >> i'm officially inviting him back in 2016. >> i'm coming back. >> yeah. >> hypnotize me next time. >> 100%. >> okay. >> amazing. >> a successful stockbroker. >> i think so. >> that's the take away. >> a scary thing. >> yeah. >> yeah. >> wow. >> next time, more tricks up my sleeve. this time, i had to leave you wanting more. >> you did. thank you. thank you for that. >> to think of what you could get awe with with this. >> the ring is on. i'm a good boy. i'm a good boy. >> you said how you landed her. does she know that? >> joe, show me how to do it, but not the shoulders. i see that. >> we have to go. thank you very much. >> thank you very much. >> have a merry christmas. >> happy holidays. >> happy and healthy. >> i can't believe it. >> have you done it where it does not work? >> absolutely. no risk, no reward.

on "america's got talent," across the street, radio music hall -- >> it didn't work? >> it worked, but by the skin of my teeth. >> when we return, cramer taking risk in the new york stock exchange. look at futures as we go to break. dow opening up 115 points higher, maybe the mentalist makes it go higher later. company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.

to discover the best shows friends together and movies with xfinity's winter watchlist. later on, we'll conspire ♪ ♪ as we dream by the fire ♪ a beautiful sight, we're happy tonight ♪ ♪ watching in a winter watchlist land, ♪ ♪ watching in a winter watchlist land! ♪

xfinity's winter watchlist. watch now with xfinity on demand- your home for the best entertainment this holiday season. ♪ >> kept going. >> right. >> in the commercial break. he ask med to think of someone, write it down. i did. you guys saw that. he wrote wish robin a happy birthday for me. >> zippered inside a thing. >> i have no idea how he did it. amazing. >> amazing. >> i wasn't going to change -- i have no idea. norfolk southern rejected a revised takeover proposal from canadian pacific saying it is grossly inadequate and doesn't address possible regulatory issues with the deal.

the improved bid had the same cash and stock terms as a prior offer but had added the right for shareholders to convert some of that stock to cash. does it ever go from grossly inadequate to -- is it always grossly? >> a legal term of art. >> is that what it is? let's get down to the new york stock exchange where jim cramer joins us now. you love nike. you love kevin plank, too. that's going to be a battle to watch for the ages in the future, isn't it? >> the new cfo at under armour, people thought that was some sort of a hangover, that's what was keeping people from buying it nike put on a clinic last night. their conference call was almost as good as the starbucks conference call. mark parker is amazing. a great american manufacturer, the stuff plays well in china, western europe. it's such an amazing company you

have to really respect what they do with technology. they are a technology company that makes shoes. >> internationally. the diversification of starting with sneakers, now -- i mean, the sky's the limit, i think. i guess we want assume we'll get in any part of the world with any type of whatever we refer to as apparel or sports wear. >> what brand am i thinking of within the nike family? >> get the mentalist out here. >> we watch, but we don't know how he did any of it. let me think. >> it's a name of a country at the same time. >> jordan? >> yes! >> boom. >> that's pretty good. >> how do you do that, man? >> he's a mentalist. >> the producer whispered in my ear. >> oh. well, yes, the jordan franchise is 30 years old. i'm not saying it's going strong, i'm saying it's

accelerating. jordan went over to hong kong, taiwan, wowed people. this is some story. nike is what we do best which is make digital technology, turn it into the best sneakers. park parker is such a nonpromoter. we don't hear about him. kevin plank does a great job, too. your show this morning, rocketing. >> are you a villanova fan? >> yes, i am. i watched the xavier thing. i had a villanova graduate in my office this morning, soon to graduate. we don't have a lot of teams in philadelphia to root for. nova is always a highlight. >> they made it to the third round of the tournamentment last couple of years. remember skip proser, always great. but they -- >> i do two fantasy pools. one of them i always put nova at the top, so when it does happen i will feel fabulous about it. >> december 31st, xavier villanova at noon. we have to put some money on

that maybe, okay? >> not a problem. >> not cramer money. >> i can tell you that villanova is our only bright spot if you're from philadelphia. we are the worst sports town in america. >> except the greatest cable company in the world is based there. >> yeah. entirely. >> don't forget that. >> not even an issue. >> unbelievable management down the line. >> merry christmas. >> see you in a couple minutes. coming up, stocks to watch including the reason that cable vision is trading lower right now. stay tuned,s "squawk box."

bob dylan. to improve my language skills, i've read all of your lyrics. 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. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? do be bop. be bop do. do be do be do. do do do be do.

amazon apparently seeking to cut back its ties to u.p.s. this was probably to fit in a one-column headline they had to do to fit this. they are seeking alternatives to deal with increasing packages, and higher costs. those who own shares of u.p.s. could be concerned about this cable vision trading lower after the "wall street journal"

reports that alte steel is facing trouble in new york city. want to thank walter isaacson for being here today. >> happy holidays. >> merry christmas. >> i will see you -- >> monday. >> next week. >> no. >> whoa. >> we'll see you after the new year. >> bye, everybody. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures are up. though off of the highs of the morning. pretty good news for a holiday shortened week including nike and micron. got a warning from bed bath, celgene in the news. europe with good news. back home, durable goods