>> administration is giving an update on the airbag recall. the head of the conference call still underway so far. an eighth u.s. fatality related to the airbag has now been identified by nitsa officials. they say it occurred during an accident that happened during july in the pittsburgh area, but it has only been in recent weeks that the agency was contacted by an attorney for the family of the victim. they are now into their preliminary investigations, have determined that it is "likely related to a rupture of the air bags contributing to that fatality." the other two headlines going forward, the pace of the recalls as far as people getting automobiles in for repair has accelerated dramatically. more than 950,000 plus nationwide as of early december compared to just 400,000 for the month before. also, the officials are saying that based on test data from three major manufacturers, it is

likely that the takata airbag recall will, in fact, be expanded. we don't have the numbers on that. that conference call is still underway. we'll get back to more details as soon as we have them. it is 4:00 p.m. at ab where i road, and squawk alley is live. ♪ ♪ >> welcome to squawk alley as a wednesday. also, this morning the founder and editor in chief at the

information. cnbc contributor jessica lessin. good morning to you. >> good morning, carl. >> got stocks at session highs here. dow is up 145. our first story this morning arks organized to the journal, the relationship between ups and amazon is going south in a hurry. amazon is the biggest account for ups, worth $1 billion with the company becoming increasingly unhappy with rising shipping costs. amazon is already looking to expand its open delivery infrastructure and is apparently hired over 40 ups executives in the last three years. jessica, the journal says they argue that ups's root structure is becoming obsolete. >> this is a classic case i think. the symbiosis not working out. amazon is a massive customer, needs to remain competitive in logistics. i'm sure that we'll always find a way to work together with the ups's of the world, but it's clear to me that they're going

to move in their own direction. they've already done that when it comes to logistics on the ground. they're paying $1 billion a we're to ups. bezos will, of course, come up with another plan. >> how seamless would a transition to amazon's own infrastructure be? we saw the trial and error of the lockers. now the journal reporting that they're even testing out using newspaper carriers. >> they're a tech company. i think that they try a lot of things. many of them won't work. given their clout and infrastructure and footprint, i think they're going to make some moves. i recently used google's rival to same-day shipping service and noticed it could get me books faster because it has a deal with barnes & noble in physical stores. how ironic that google can get me books within an hour in san francisco and amazon can't. they're going to close those gaps, no doubt. >> it's inevitable. what a lot of people don't

realize, amazon's shipping revenue is growing faster than their shipping costs. shipping costs are still growing all net shipping costs, but because third party retailers, people who are actually keeping their goods in amazon's warehouses, letting amazon handle logistics, because that's growing so fast, amazon is actually getting more revenue from transporting other people's goods than they used to, and that's growing faster. basically that's growing at 45% between 2013 and 2014 where shipping costs grew 31%. this is a business for amazon. it is in their interest to run this part as efficiently as possible. i would argue they're already in a transportation business and logistics business because of these sortation centers. we've seen the news rolling out about how they're buying these trailers for trackers. we've seen the news about them trying to buy planes. it's going to be deliberate, but it is absolutely coming. >> certainly as kayla says, it's not going to be completely without trial and error, but

it's not like 2013 or 2014 christmas seasons were without a hitch. a lot of this is because much the snafus we saw the last couple of years. >> it's not because it's going to be without the costs either. you are going to love what they did with infrastructure, john, even if the revenues are growing faster for shipping than the cost. you still have to invest in more sortation centers, more trucks, more air fleets, more foot soldiers. more, more, more. >> you do, but the shipping revenue was 5% of overall revenue in 2014. up from 4% we're before. it becomes more and more essential as they move to groceries and more perishable items that not only have to arrive quickly, but they have to arrive absolutely pristine. they need to be able to control the process. >> five times what it was worth ten years ago. that's how fast amazon has grown. >> next up, the most famous man in the world coming to streaming services everywhere. starting tomorrow the entire

beatles catalog will be available on services like spotify, apple music, and google play. unlike some is artists like taylor swift, the beatles will be available on free versions of services like spotify. as for pandora, the on-line radio service already has beatles tunes, but with restrictions. it's making a lot of general news headlines. i really hate to say that as a beatles fan, but it's anti-climactic. it seems like we're past this somehow. to be sure, it is a big deal in the fact that i'm sure a lot of people will love boogt up some beatles tunes this weekend, but they've been on itunes for, i think, six years now. i'm more interneted in just what's going on with these streaming platforms. it's so fragmented right now. i'm picking and choosing across them for different things. hooking them into my sonos. it feels like we're ripe for some kind of bigger shift on the technology sort of business side.

i'll probably listen to the beatles a bit. i'm sure other people will. this does not seem like a huge deal. >> here's what i think is the big deal. when beatles went to downloads it was a big thing for itunes because it validated downloads in a bigger way than they had been before. i think this time this could be big for amazon music because amazon music is getting the beatles. the reason where it's big is every prime subscriber actually has access to amazon music, but i'm betting most don't know they have access, so as of tomorrow every prime subscriber is basically going to have access to the entire beatles catalog, and amazon music, with most songs, you can download them to your device, play them in whatever order you want. >> does every topic come back to appear zon? >>tives the season. this is one that's potentially big for amazon. hey, mom, dad, you're mom subscribers. get the beatles catalog. >> how long before it gets more expensive? >> it already got more expensive. wron if they're going to hike

prices again immediately. they're already getting a decent amount of revenue. they put prime on sale a couple of times in the past year too. >> well, it's not just amazon. beatles are leaving no service behind. spotify apple music, google play, title. these are microsoft group. napster, rapsody. are you surprised they're just going all in and not choosing one or two of these services like most of the marquee artists have? >> well, that's the difference, kayla, and i think that i was surprised by that initially. i haven't heard of some of those services. i'm afraid to admit. i think it's a sign they're taking a different strategy, so it's hard to see one winner from this. john, i think you do make a good point. amazon, if you haven't thought to go to prime for media, i think that's changing. they're what i think we need to look for is how much amazon is going to market and promote it. you go to that amazon home page. there's a lot of stuff there. particularly this time of we're. i am really interested to see if

the beatles are going to be front and center. they definitely were on itunes back in the day. i think that will go a long way to whether consumers make the leap and spend more time with amazon media. >> that's a good point. it's not like you see an ad for man in the high castle when you are buying paper clips on amazon e-commerce. we'll see if that changes. >> you don't know you want the man in the high castle, eleanor rigby. >> i'm glad to hear you've been stocking up on your paper clips. >> i'm obsessed. let's move to nike where i. shares were rallying earlier on futures and earnings orders. now stock has turned around. down about 2%. nike where i continues to make a big bet on e-commerce. the company currently earns over $1 billion a year in that area and expects the number to rise to $7 billion over the next four years. on the call mark parker does d stay "driving the connection of miky.com to our broader digital strategy continues to be without a doubt, wuch our greatest opportunities." we hear from viewers even today, jessica, saying have you had custom sneakers made?

it's more addictive than getting chuck tailylors ever were. >> the customization is one of the wins. the digital wearable technology. they kind of pulled back from a little bit. they were early movers in that. this seems like a great idea. i'm sure e-commerce is going to grow mightily. if they're trying to knit together the on-line and offline in store payments, all that stuff is still experimental. it's nice to see them being ahead of it, but i wouldn't place any big bets on some of that future. you know, you walk you into a store, order something, et cetera, et cetera. i think we have a long way to go on that. >> i really like shopping directly with nike. i don't do it that often, but they're creating an experience. it's important i think that they're continuing to control that last mile to the consumer in a way that some other brands backed away from. you know, what jessica just said, what you just said, reminds me that maub they

stepped back too soon from that wearable market. i don't know if the apple watch has taken the world by so much storm that there's no room for a nike to do something to knock your socks off. underarmour is trying to fill that void by going more aggressively into wearables. >> that's back to the conversation we had last summer. tim cook on nike's board. were they really going to offer a competing product, right? >> maybe tim would have had to leave the board. i don't know. >> interesting to see nike where i say there are undersearched markets in digital. women, young athletes, and jordan. which are pretty high profile, high visibility markets. you wouldn't think that a company, jessica, as big as nike would be able to admit something like that. >> i think there's a lot. there's a lot of opportunity for everyone in e-commerce. in the last hour we're talking about amazon, and still has a very small percentage of shopping, which is shocking. i think there's big opportunities everywhere. nike has an awesome brand. i think that's going to serve

retailers well as we get to an area of more commo dot ization. i think it's going to be sort of sticking to basics and just still having great products and marketing. >> jessica, if we don't see you before the new year, happy holidays. good to see you, as always. >> happy holidays. >> jessica lessin with the information. >> in the meantime, markets are continuing to climb on some positive data this morning. new home sales for november, up 4.3%. michigan consumer confidence hitting a five-month high. it's really this move in oil after we got a draw down in inventory at 10:30 a.m. that has been continuing to move the market. that hit just a moment ago. we're seeing wti crude. it was up at $37.73. it's come off of the highs, but it's now up just about 3.5%. certainly something to watch today. cells of celogene solved a long-running patent distut on a cancer drug. stock currently up nearly 8%.

in the meantime, the top loser on the s&p, bed, bath, and beyond. shares falling after the company cut its quarterly guidance because of lower than expected sales. carl, the company said they had softer in store traffic even though digital sales rose 25%. >> all right. when we come back, the next big thing didn't show up this year. that's the headline from walt mossberg's look at this year in tech. walt will join us live to explain. plus, some new numbers from comscore show just how much mobile is dominating the holiday season. what you need to know from this exclusive data. and a closer look inside google's self-driving car strategy. the company that builds a key piece of google's car is with us to break it all down when "squawk alley" continues on this wednesday.

>> we saw periscope go live and saw taylor swift and adele stand up against streaming. walt mossberg joins us now with his year in review, and, walt, yeah, you say that the next big thing didn't really arrive in 2015. maybe a bit of a twist on that old samsung slogan that it's already here. maybe it's already been here, and it's not coming. do you have any sense that it might be coming in 2016? >> you know, jon, first of all, merry christmas to you and

everyone there. i do think we saw -- and i did say this in a portion of this column this morning. i think we saw progress on a number of important things that are going to be really big game changing deals, that are going to be the next big things, like a.i., like b.r., like driverless cars, like contact payments. all these things got better and moved along in 2015, but they didn't hit the mass market and the things that did hit the mass market i think had less impact than their creators had hoped. >> what about drones and payments? people are excited about drones, but they're going to run into a lot of regulatory issues? is that going to be a mass market trend, or do we just have to watch out for them on the ski

slopes and it's a niche issue? >> you know, i if i had to protect right now, i would say for at least the next five years from a consumer point of view it's a hobbyist thing. obviously there are commercial applications, and you see amazon very seriously trying to do that or develop that. we'll see how that works out. you'll see if people like having packages dropped from the air on their lawns or porches and see if it can be done accurately. in 2015 that's another one of those things which, you know, didn't become the next big thing, didn't kind of get delivered, but you can see it moving. i think that whether it's 2016 or 2017 or wherever, you can see the roots of some of these things. i think some of the things we thought would be big deals like the apple watch, which you

mentioned a few minutes ago in the nike context, i don't think have become really big game-changing, life-changing things. >> walt, you've been around long enough to see some big chapters written. pc, laptop, smartphone. characterize your degree of -- your sense of promise about technology where we are right now relative to past errors? >> i don't have any diminuitioon of promise. i think we're in a lull period where people are working on things that are longer range and harder maybe and the thirpgsz that have changed for the better and cost curve like smartphones, which are hardly done, by the

way, but those things are not making the leap that is they used to make every year or every six months starting with the iphone certainly, and laptops, which we all use and, you know, anybody can say laptops are unnecessary. they -- in a sense, they still help run the world, are really struggling because people just aren't replacing them very often, and the new designs particularly encouraged by microsoft and intel for, you know, flipping them around in six different ways and making them hybrids, i don't think are luring people to the stores in enough volume with enough frequency to really matter. >> sure. walt, there's a consumer behavior element of this, and i'm wondering where on some of these big issues, like a.i. or internet of things, consumer behavior just hasn't adapted there. >> well, i think wills two

separate things, kayla. i don't think consumers are rushing to it. i think there's a diy crowd, an enthusiast crowd that's doing it, but i don't think average people are doing it, and i think there's a reason. it's a mess, which was the wording i used. it's a mess. it's a bunch of different products. some of them -- apple has a thing called home kit. google has an android similar thing that attempts to tie these together, but all these many separate companies aren't really hooking into them to the degree we thought. i think that -- consumer behavior there is just not happening. on a.i., if -- go ahead. >> i was going to say i think we're out of time. i feel like my smartphone had to repeat kindergarten again in 2015. hopefully it actually gets a bit

smarter next year. walt mossberg. >> all right. >> thanks so much for joining us. >> happy holidays, everyone. >> happy holidays. merry christmas. up next, as 2015 comes to a close, what should you expect from the markets next year? we'll tell you in just a moment.

cnbc is it breaking out the 2016 playbook looking at how you can make money in the coming year, and we're focussing on what to expect from the stock market. here's bob pasani. >> when making predictions be bold and play against the consensus. first, the profit recession will finally end, but just barely. after four consecutive quarters of negative earnings growth, the s&p 500 will see earnings improve in the mid single digits. the key will be a modest turnaround in earnings for

energy companies after a 60% plunge in 2015. second, after years of playing growth and momentum names like apple, for example, investors will gravitate towards boring old value stocks. particularly energy names like exxonmobil and financials like citigroup and industrials like united technologies. finally, the proposed merger between dow chemical and dupont won't be the last in the beaten up materials space. there will be more in 2016. fertilizer giant potash tried and failed for german fertilizer giant k plus s, but management said consolidation was still on the board, so potash will be talking as well as those in the seed business, including syngenta and mondsantmonsanto. >> what's going to outperform? that's the big debate? you can see that going on today. look at the dow leaders. the biggest growth stock of 2016, argue blig bli, nike.

spectacular report. it's down today. that was a big winner. it's up about 30% so far this year. they're selling nike today. the big value names have all been losers this year, including caterpillar, including chevron, including exxon. the whole group is down los to 20%. they've been kicking on them for the last couple of days. you can see the trend playing out. the question is whether that goes into 2016. i personally think oil stabilizes, the dollar stabilizes. value could easily outperform in 2016. that's my bet. back to you. >> indeed, bob. thank you very much. europe is about to close. let's get to simon hobbs here and return to the post nine. >> carl, it is the last full trading day, of course, for both sides of the atlantic. wrurp shutting down ahead of christmas eve. check out the figures here. the weighted average is 2.5% gain. it's a very broad-based move. i would describe it as a markup more than a rally given the volume. the price action is what the price action is, and it's interesting.

those areas that have been beaten down in the market are those that are riding the most. energy clearly is one of the main gainers. i'm not sure if this is the shorts coming through, but clearly you can see that the energy stocks are higher. thames like bg, repsol, royal dutch shell are doing well on the session. bg, of course, you've had comments from bp during the course of the week about the merger. the mining stocks are also a stand-out. up 17% for the week, and angel wroe american is still up but still beaten down. this has lost three-quarters of its value during the course of the year. going into a period of event risk where there's just space in the calendar, one of the most dangerous positions to be arguably is short of a stock or short of the market.

i have no idea. it's relative active. still down from the holiday period and 18-year low for tesco. it's been a long time coming. finally, the swrermans rva and -- two big utilities have exited one of the local utilities in luxembourg. the government there buying them out in private equity. it's probably a half a billion dollar deal. i much bigger one, of course, will be whether the exhalta deal goes through. they still think it's on. though apparently it's looking for potential other partners. we will see whether that plays out next week. back to you. >> simon, thank you very much. >> when we come back, we knew that mobile was going to be big this year, but some exclusive data from comstore shows just how much it's dominating the holiday season. we'll tell you what you need to know. plus, the video you've got to see. a professional skier almost taken out by a drone on live television. we've got that for you. dow up 134.

the vix below 16 for the first time in a couple of weeks. back in a minute. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

i'm sharon eperson, and here's your cnbc news update at this hour. a leading london mom who had his business visa revoked as he is about to board a plane for new york is condemning the decision today. he says he has been invited to go -- he had been invited to go to new york to lead friday prayers at a local mosque. in another incident, an 11

member muslim family was allegedly barred from flying to disneyland from london. i understand wran prime minister modi arriving in moscow for a meeting with russian president putin. a private dinner is planned for tonight. russia wra and india have shared close ties since the cold war. israeli police believe wrun palestinian assailant was killed and a second badly wounded after a stabbing attack on israelis outside swrurl's old city. three israelis were wounded in the attack. and real housewife reality star theresa giudice arriving at her new jersey home after being released from the danbury correctional facility. had he will be on home confinement until february 5th. her husband is expected to start his three and a half year prison sentence in march. that's our cnbc news update for this hour. let's get back to squawk alley. >> thanks so much. sharon eperson back at headquarters. holiday shopping is showing weakness in brick and mortar stores, but is growing moerp mobile more than expected?

with us now tom, co-founder jan. it's great to have you. you guys are now showing that mobile is up between 50% and 60%. what's behind this increased push? >> well, it's not a surprise that it's been very, very strong season for mobile. we were expecting e-commerce sales to be up about 47% for the november-december period. we now expect it will be up slightly more than that, up to maybe 50% to 60%. a couple of things are driving it. first of all, the convenience of using these mobile devices whenever and wherever you are. that's a big, big push. the other fact this year compared to last year is the larger screen size on a lot of these mobile devices, which makes it easier, more comfortable for the consumer to buy off of a mobile device. then you've got more devices. you've got almost 200 million of these smartphones now and about

80 million, 90 million tablets out there. put all those factors together, and it's just powering growth. it's that the mix is possibly changing. is that correct? >> yeah, that's right. i think that the channel shift is really cannibalizing bricks and mortar, so you can't look at the on-line buying as being incremental to what consumers would have spent. now you have really fast-moving and buying additional shift and buying on mobile devices. we think this season that desk top buying will be up maybe about 7% to 8%. a little bit less than we had expected. we reported it would be about 9%. as we said, the e-commerce

sector is just on fire. where we thought it was going to be up 47%, now we think it's going to be well north of 50%. >> what changed? two years ago the knock on n-commerce is people have their phones, and they abandon the shopping carts. maybe it was the screen just isn't big enough to complete transactions, especially high dollar ones. is it the larger screen phones? is it the faster wireless connections? why are people completing those transactions now that they were abandoning a couple of years ago? >> i think the screen size is certainly one of the main drivers here. if you look at the kind of products that people buy as a function of convenient size, the more considered the purchase, the greater the likelihood that the screen has to be large, and the desk stop really still rules when are you talking about really expensive purchases. with the larger convenient sizes, especially on the iphone six, it does make it a lot ease wrer now for consumers to buy.

plus, remember, every year we have an additional segment of the population that's coming out of college totally well versed in mobile technology. they have spending power, and off they go and use these mobile devices. i think it's a trend that is actually accelerating, and i think for the next several years i don't expect it's going to slow down. >> jan, we're sort of in that period where phones are as large as they're going to get. i wonder if we're in this lull period. >> one of the other things that's happening is that the use of apps makes it much ease wrer for somebody to buy off a mobile device because you don't have to go through the detailed inputting of your credit card information, et cetera, et cetera, and it's pretty clear that the leading retailers have figured out the importance of apps and they've done a really nice job. especially lately some of the multi-channel retailers like

target and wal-mart. they are making it with these apps much, much ease wrer for the consumer to buy. i think that's a big driver. then finally, one of the things to remember, kind of an interesting statistic, is that about 70% of the use of these mobile devices actually occurs in the home and so they're on a secure wi-fi. they don't have a security aspect, and that makes it a lot ease wrer and more comfortable, if you will, for the consumer to buy off these mobile devices. >> it's so easy to think of this economy as amazon and everybody else. we did get a negative warning from bed, bath, and beyond. we're trying to think about winners and losers. i'm wondering who you think stands out this holiday season. >> i would have to say that it's a spectacular season for amazon based on all the metrics that we look at. the big multi-channel retailers like wal-mart and target have done especially well this season. especially well in mobile. as i said wrerl, i think that they have figured out the

importance of the apps, and they have got a lot of people using them. it makes it easier for people to then buy off of those particular retailer sites. i suspect for those retailer that is don't have a lot of apps on devices, they are the ones that are suffering a little this particular season. >> well, we certainly have seen a sprint to the finish line this year. we'll have more data points as the week closes out. we always appreciate you coming on. jan. >> thank you very much. >> up next, a rough day for micron. shares down about 4.5%. we'll tell you what's going on. first, rick santelli, what are you watching today? >> oh, there's a couple of things i'm watching. all of you out there are watching and listening and are thinking about this. where are the stock inteks going to close the year? i have some strong thoughts there, and some structural issues. low-hanging fruit. that may change the complexion of the economy in the next couple of years. all after the break.

did we just, start looking for a house? oh did you see that listing on zillow i sent you. you see that bathroom? did we just decide to buy house? i think so. yay! find your way home. zillow. coming up, we speak to one of the analyst who's just cut his price target on apple today. see what our traders think about cramer's shopping list for that company. plus, why someone on the street sees a possible red flag and nike's results. you'll hear from him live, and the 2016 outlook for stocks with the top strategist at ubs. see you in about 15 minutes or so. >> all right. sounds good, scott. thanks. meanwhile, we're going to take a look at shares of micron

falling los to 5%. the company reported a miss on first quarter sales. the big guide down for the current quarter. weak pc demand affected memory prices. while the company makes memory chips and flash storage that goes in your computer smartphones and other electronics. mostly took that hit on lower prices for deram chips. memory chips mostly used in computers. revenue for the quarter dropped 27%. the company did beat on the bottom line. the hope for those is that next year micron can push into enterprise flash, which is a bit more stable. the margins are a bit better too. as you can see, that stock had been struggling so far today. see how it turns out. >> yeah. good morning. revenue warning significant. they keep saying we're not going to build too much capacity.

we're not going to build too much capacity. wlerned from last time. then one moves. the rest of them move, and we end up in a situation like this. investors have come to somewhat expect it. we'll see if it eenz out. it usually does. >> on a day where a lot of the laggards are getting bought. micron is one that is not in that club. let's go to the cme group and check in with rick santelli. hey, rick. maybe we're seeing the beginningings of that right now. i have a pretty strong -- i eventually had it all year regarding where equities would close, and it's not that complicated. viewers, listeners on satellite radio, think. how many times have the dow and the s&p crisscrossed in and out of unchanged territory? now, we're going to take the nasdaq and move it off to the side. last i looked, the dow was down maybe a percent and a half on the year. the s&p literally is down a

whisker. very close to unchanged, but still down a bit. it hasn't had the same dynamics, and that's true many times where there's questions in the equity world. technology is always a great unknown. think tesla. much more willing to have faith in technology that maybe the industrials or some of the other sectors. as for interest rates, i thought one camp would be unchanged. looking at a floating higher interest rate environment and in my opinion that's because of the light volume nature of what we see in equities. finally, on low-hanging fruit, considering the season let's call it low-hanging sugar plums. investor class, like everybody else, sees things in a politicized way, but much less

so when it has to do with their money. everything in life has been much more highly politicized. my call for 2016 is watch politics. strip out social issues. strip out -- i'm not saying they're not important. climate change. immigration. you can put any candidate in this camp that you believe. i think we have so much low-hanging fruit. i believe some of the things weave talked about the last handful of wreerz. so many things that are subtle changes that could make it out sized difference even in the environment of a stronger dollar and gets stronger as the fed normalizes. the long and the short of it is, i think investors are going to be watching the pulse.

a great way to take business away from the rest of the globe. back to you. >> thank you. rick santelli in chicago. up next, real insight into how -- we'll talk to a company powering self-driving tech for google.

>> david hall is a ceo and co-founder of -- he joins us this morning. david, good morning. good to have you with us. >> good morning. >> we got this news -- reports i would say this morning of this partnership between google and ford, which has some people thinking that we're about to make a big turn in this evolution. how do you read it? is. >> well, isn't that a rumor? unfounded rumor at this point? >> we're going to find out. if you read yahoo autos. >> i can wait until then. so -- >> how do you then -- how do you characterize the evolution of this technology being right in the middle of it? >> yeah. well, first, i'm the inventor of the spinning thing that you see on top of the google cars and also the ones that are used in the ford cars, and i'm kind of

in the center of this whole movement, and so it's starting to become a very interesting movement as everybody is getting behind it and there's a lot of activity everywhere, and it's google, ford deciding to get together, then i think that's a sort of natural combination. you're going to see more of it in the future. >> do you have reason to believe it's not true? >> well, i don't speculate on these things. you know? i don't know. nobody tells me anything anyway because i blab it to everybody anyway. i'm the last person to know about these things. >> david, i'm curious where your technology is headed. the latest model that you put out. the smaller for mass production. do you expect the volumes of light r, the need to be able to understand the environment of an autonomous vehicle, whether it's a car or a drone to go up dramatically and what do you expect to drive that? is it going to be cars?

is it going to be drones? something else? >> well, the answer is yes because the product -- if you are a computer, i got the only solution that you really want to see. it's seen a lot of application both in making maps and other peripheral stuff outside of autonomous cars, but today i would say the interest in autonomous cars is now the number one driver behind the adoption of my technology. >> david, we still read about how there are some situations on the road that inevitably will need human judgment. the four-way stop, for instance, where you have to look around and read the actions of the other people in other cars. i'm wondering how a sensor like what you guys are producing can potentially solve for what would previously have required a human? >> well, there's really two

camps on that, and there's the people that were in the grand challenge, and then people who were not in the grand challenge, and all of us who were in the grand challenge or under the bringings that the car has to be driving 100% of the time under all circumstances and nothing short of that will do. that's google's policy and a few others. i'm kind of dedicated to making equipment that feeds into the concept of the car 100% of the time and a human can fall asleep and probably would be better off if they did so. >> when people ask you what the biggest engineering chal ebbing is, how do you -- what do you say to them? knowing you have to put it in terms that a lehman can understand. >> i don't see the technology as a barrier. i see the government as the barrier. you know, the government owns the roads right now. we're just trying to make a car that tries to dovetail into existing roads, and if the government doesn't want cars on

there, then they're not going to be on there. i think if the government were to say, hey, you guys can have your own lane, go wild with technology, i think we can build a really interesting transportation system of the future. >> is that -- do you think the challenge is going to be on the local sort of municipal level, or is this more an issue for the feds? >> well, you know, i mean, we need some insulation from liability because, you know, there are already lawyers lining up outside ready to sue us and throw us all in jail for every code error we ran. it's a little bit of a problem that -- some of it is maybe we just have to take this whole thing off shore and do it someplace that's more friendly than the united states. i'm a little disappointed that we would have to do that. certainly looking that may be the best way to get this done.

>> when we come back, google rolling out the robots this christmas. this is a video that you probably want to see. meantime, dow is up 119. twai.

>> carrying a broadcast camera crashes right behind it. the drone barely missed the defending champion by essentially a second or less. he wasn't aware of the crash and only found out about it at the end of the run. is this the future? that will teach him to order a book from amazon with one hour delivery. >> yeah. >> i think this has to be a warning sign for all broadcasters. i wouldn't be surprised if a lot of athletes are going to be raising concerns about the use of drones after seeing this video what other technology has raised that kind of concern. it is a big object floating out

there. >> we've talked about the difference between the extracurricular ten pound drones and the drones carrying cargo. amazon wants to carry up to 50 pounds. that's a heavy drone. >> ten pounds coming at you at speed velocity from 400 feet is going to hurt no matter what. there's no drone light enough that won't have some sort of damage. >> yes. especially on city streets when you have kids running around. there's plenty of safety work to be done. the dow up 132. not far from the session highs, but the turnaround is the most startling thing of the day. started out the morning at a record high after the futures coming ahead of expectations. midsession a turnaround and people feel 41% gain for the year. 227 points and change. it added to the dow so far this year. which is still down. s&p right now two points from break even. i know 2059 is the number that a

lot of people are watching today. whop ner has all of that and more. back to headquarters and the half. ♪ >> guys, thanks so much. welcome to the halftime show. let's meet our starting line-up for today. joe here and have a special guest trader with us here. tyler vernon, the ceo of biltmore capital. bull or bear? where does ubs see stocks heading in 2016? top strategist juliana manuel is with us live. just beware it. yes, the stock has turned around. why one man on the street is not so giddy now about nike's latest earnings report. he will tell you why straight ahead. we begin, though, with