it's monday, december 28th, 2015, and "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe. thursday i said happy holidays, not merry christmas. i was not trying to be pc. i do christmas. i know joe had a good christmas. you had a good christmas? >> i did. >> what's that, joe? >> you just can't help yourself. >> i was not trying to be pc. >> you weren't trying, you can't help yourself. >> you don't want to say that anywhere but here. >> as you know, i am loving you

so i try to incorporate all holidays. in the meantime, we have a developing story about deadly weather across central u.s. tornadoes, blizzards, heavy rain killing more than 20 people in three states. more bad weather coming. western oklahoma bracing for a foot of snow. blizzard warnings remain in texas and missouri. a little bit of travel trouble across the country. about 1500 flights canceled nationwide yesterday. another 6,000 planes are delayed. you're going to be getting a live report from the weather channel in just a bit. meantime, the global markets are open today. we are seeing some negative activity in the futures market because of some of the activity that we have seen in asia and in europe. in europe the u.k. and irish markets are closed for bank holiday observing boxing day. australia and new zealand closed for the same reason. in germany we are down

fractionally. down 1/4 of 1%. same for spain and groogs which we are still throwing in there for good measure down by 3/4 of 1%. in china stocks are suffering from their biggest loss in a month. among the reasons, ip overflow after they approved a proposal yesterday. ipos had been suspended for some time. there's a worry about putting more supply of new shares on the market when the demand forexisting shares is still on shaky ground. the reforms mean the company could move from an approval based system to a u.s. style setup. could potentially boost supply. that is the worry. you're seeing hong kong down by 1%. shanghai down by 2.5%. joe, we did see industrial profits in china negative for the sixth straight month. they did narrow because of growth in autos, growth in electricity. still, as we're trying to see exactly what we're set up for in growth in asia for next year, there are a lot of data points that don't look so positive.

>> yeah. i saw china earlier, it's been 46. the b share index has tumbled the most in four months. for some reason i feel like after christmas we're in 2016, we're not. we're in this weird netherworld. it reminds me more. i thought we could wipe the slate clean and do better next year. i feel like it's more of the same. oil is down, the futures are down, china's not doing very well either. there is still this really more of a bolo than a -- my tie. >> it's not leather. >> trying to join a boy band. >> bolos are cool. you can't go halfway. >> go for the full string. >> or the bolo. >> then we're going to talk about oil. this airlines stuff, people take to twitter, you know, some of them somewhat famous when this

happens. >> yeah. >> and they can't believe that flights get canceled because of weather when they're not near dallas. remember what we learned last week, if the dallas hub -- >> goes down, everything goes. >> it's a problem. you don't know where you might be because the planes can't get through there. it doesn't help when you're expecting relatives on christmas. >> did you have this issue? >> no. but i'm reading a lot of complaints on twitter. i read one that was opposite about the relatives who couldn't make it to christmas. >> people happy. >> it was a mother-in-law situation. >> that's nice. >> it's nice. i'm just -- >> again, this is a friend. >> it's early in the morning. >> to my family, very well may be awake, i had a great time in atlanta this weekend. >> no, we had the whole family. >> i'm totally confused. >> i was in atlanta. >> you're kayla, right? >> who are you? >> you're courtney. >> we're just bots sent here to

destroy you. >> i said that earlier, you are different people. >> we are. >> you're just millennial -- you're in all the -- >> we have three hours of this. >> yeah, you're in all the biz media. >> "cloudy with a chance of meatballs." >> you're the heroine? >> yeah. >> i'm going to get some grief for this. as for the broader markets, check out the oil prices. oil down. remember, it rolled. it was down to 34 or so. then it got a couple of bucks when it rolled. it's down 2.2% but still above 37 even though that's better than when we were looking to break under 34 at one point. it still had the equity markets down. 2.25 i saw earlier, 2.24. euro, 1-10. now 1.0987. we're going to take greece out and we're going to take gold out if it doesn't start doing

something. it's been right at about 1,070 for a while. >> you're still concerned with the bolo. >> ebola? >> no, the bolo. i thought you kept looking at the tie. you give me the glance. >> no, just me looking at you. >> thank you. i hope that's okay. >> are we going to talk about the jets and patriots? that was something. >> the panthers/falcons? >> yeah, that was a good one. >> did you watch movies this week? i have to catch up with you. a lot to do. >> i saw all the sports. this next week -- >> all the sports. >> i did. i did. i saw everything that happened. i saw what happened to poor green bay. that was ugly. you know who's a stud? aaron rodgers. why did he decide -- he was getting absolutely squished on every play and he wouldn't leave. he would not leave the game. they even had the guy warming up. he's -- anyway. >> we've got some other stories. >> we're talking with rob, the guy from nbc sports. >> yes, we are. >> coin flip on what happened. >> how screwed up was that? let's -- we will -- that's like

a tease of sorts. we should tell you we have a very light economical lender. the dallas fed survey comes out at 10:00. saudi arabia expected to reveal its budget today. and chipotle restaurant news near boston college now. the story there, it's reopened. this is the location where 136 customers became sick with noro virus. an unrelated water leak delayed the process until saturday. boston health inspector told a local newspaper that he plans to have lunch at chipotle. shares down 30% in the last few months. trading at $495. i passed one of these saturday or sunday? like virtually empty.

i know it was the holidays. >> i had chipotle last night. >> no way? >> are you fine? just tempting fate. >> it's got to be good. >> after that. >> schi poll tai's waiting for a green light from the cdc to start advertising. they don't want to be saying that everything is at all clear. >> when it's not. >> collateral damage over here. you're a little close. do you mind if i --? >> no, no, that's nice. in our corporate news this morning, "star wars", the force awakens crossing the billion dollar mark in ticket sales this weekend. just 12 days after its worldwide release. this makes it the fastest movie in history to top that milestone. the disney film also turning in the biggest christmas day box office of all time. $49.3 million in sales. had either of you seen it? >> i have not seen it yet.

we did two movies this weekend. we saw "giwodi." jennifer lawrence was awesome. another movie that joe would hate and i did not like. i'm a fan of will smith's, i saw "concussion" and it underwhelmed me. i apologize. >> that seems like it could be maybe a documentary more than an entertainment movie. same with big short. the documentary. and then "joy," i would get confused. >> "silver linings playbook" is an awesome movie. there is no confusion. when you walk in, it's not -- >> i would be confused. >> no. no. >> they do such a brilliant job acting. it could be compelling and you do compare them. >> we had grand ambitions to see "the big short" and couldn't make it out of our pajamas.

>> let's go see a movie about the mortgage crisis. >> on our day off. >> on our day off. >> driven by the latest "star wars" film and universal's "jurassic world" it is on track to smash box office sales. ticket sales up 7% from last year's records. rem track says the ticket sales are expected to top $11 billion. total admission below the recent peak year of 2002 but $11 billion nothing to sniff at. >> i heard this anecdotally that they could count it absolutely, positively will be there. it absolutely, positively was not there this time. holiday retail news, fedex did not deliver all of its packages by christmas. forced to run packages on december 25th. a spokesperson for the shipper blames unforeseen volume. it can always be even more than you thought.

it's a weird thing to say around christmas, we weren't expecting this type of volume. but also the weather didn't help. ups tells "the wall street journal" it finished all of its christmas deliveries on christmas eve. a.m. ma zorch says more than 3 million customers joined the prime service during the third week of december. e. commerce giant reports it shipped through 185 countries. it says 70% of the users shopped using a mobile device. shares of amazon, you can see, if you bought that january 1st, you'd think the stock market was great. i don't know what people did. 300 didn't seem like -- remember, it's supposed to be -- >> crazy. supposed to be 20 according to barrons. 660. the chipotle thing scares me. they have a guy saying -- do you remember the mayor in "jaws" telling everyone, go on, get in.

people are like -- after the slow attack, they put a big toe in the water. he's actually saying i'm going to being into chipotle. watch this. i'm going to survive. >> they've said they'll do certain things to improve the processes. >> they don't know what happened. >> boil certain things, shred the cheese. >> norovirus, e. coli in another, a different strain of e. coli in another. >> maybe the chance that it ever happens again -- >> jane wells had a very interesting anecdotal take. not a single employee at one of the chipotle locations got sick. >> they know whatnot to do. >> they get one free meal per shift. >> they do? >> yes. >> retail, christmas retailers are working hard to get the most out of holiday sales. courtney reagan is here. >> good morning, andrew. the gift giving holidays are in

the rear-view mirror. they're betting on returns for two reasons, recapturing the sale of unwanted items and reselling. returns could be more than $50 billion this season. in store and onplien shopping channels are blurred more than ever. if you're keeping score, returns game is one brick and mortar stores might win. 1/3 of all online purchases are returned. it's even more when it's clothing. the rate of return is higher for both during the holiday season. in store has the advantage of conversion or getting a customer to turn their trip to the store into a sale which is higher in stores than online. both still weaknesses for online retailers. plus, it's free to return most goods to stores. not always the case online.

those that offer free shipping for returns are absorbing the costs of that shipping and often without recapturing a sale. those who offer free shipping in both areas are encouraging people to reorder and thoechb return what you don't need. free shipping, free returns, i'll order seven pairs of shoes intending to only keep one. it's a problem for online retail. still has to work out those kinks. >> it's interesting because we think about foot traffic in stores, whether it's an accurate indicator for resulting in a sale for that company but you have to think that the rate of purchase and the lack of a return is higher than with some of these online retailers where you can't touch the item, can't feel it, can't see how big it is. >> roo right. >> i have to imagine that some of these online orders will result in a return.

>> 1/3 returned. 40% ordered online are returned. so much higher for online. a lot of those retailers absorbing the stock, retaking it back in. you don't have the impulse buy. you're not at the register waiting to return it. it's much more purposeful online. oh, maybe i'll pick this up as well. >> thank you. are you leaving now? >> i'll be back. don't you worry. >> courtney though. i'll be back. >> that's right. >> get you confused. >> should have name tags. >> i know. i'm uncomfortable with this. this final trading week of the year could offer key insights into the trading year ahead. joining us is allyson deans at aa deans advisory and cnbc contributor. covering the economy is lindsey pieg. detaught fixed income. i was saying earlier i feel like it's the new year and it's not

yet. i think, allyson, you think when we get in the new year it won't be any different. very similar for equities? >> very similar. slow global growth. improvement on the economic global growth because of the stronger dollar. energy prices doesn't do much. and while the fed has started to raise rates, i think because there's so much global uncertainty we're still going to keep wondering whether or not they're going to keep raising rates. it feels as if we're going to have a 2016 that looks a lot like -- >> lindsay, you can help us with the corporate profit picture. if we're still 2% gdp and we still have dollar strength and oil weakness, i don't see how we have great -- they might be better comps because it's just the same as we had this year but on an absolute basis it shouldn't be that much better than 2015 either. >> no, you're exactly right.

on the top line we're expecting the same. top line around the 2% trend activity level that we've seen since the end of the great recession and that most of that lack of growth has been driven by the hesitancy on the business side to invest. we saw another very disappointing durable goods report come in just last week. businesses still facing the same lingering themes as allyson mentioned, a heightened dollar, ample inventory overhang and lingering uncertainty about the u.s. economy, global picture, tax uncertainty, rising health care costs. all of these issues are going to stay with us into next year. really i see no catalyst to above trend growth at that point. >> we argue all the time about why we're in this kind of, i don't know, it's just -- what's that word? is it meh. seven years of meh. i don't get my news interest drudge report but i happened to see something on here.

i try to avoid it. it hits up twitter. the president is absolutely going to stave off any lame duck status. there's no way he's going to sit back no matter what congress does. he's going to squeeze every ounce of change that he can out of the way we used to do things around here. do you attribute some of our problems to a lot of regulation, obama care, whatever? is that what is still ailing the corporate sector, lindsey? >> absolutely. we've seen the federal reserve do everything they possibly can. zero interest rates for years, but those guys in washington seem to be shooting us in the foot with disconnect between monetary policy and fiscal policy. fiscal policy has been uncertainty about taxes. raising taxes. a.m. ample regulation. all of this negating what we should have seen from the zero interest rate policy. at this point it seems as if the fed has thrown up their hands and said, we can't get anything

out of zero rate interest policy, the government is not cooperating. it's time to tighten. >> on the other side, i'm going to say i don't agree with the regulation. if you look back in history -- >> you're not sure there's overregulation? >> i do think there's overregulation in certain areas, but now dealing with regulation and not doing anything to stimulate the economy -- >> we had a trillion dollar stimulus. >> i think it was a very cap haphearted stimulus. >> it didn't go to any shovel ready products. >> we nood to have clarity for long-term tax policy. corporations aren't going to do much if they don't know what the long-term policy is going to be. >> nothing will change on that probably. i mean, that would have been -- that's where you needed the bully pulpit to get that going, don't you think? >> yes. >> that wasn't a priority. well, all right. go ahead. >> it feels to me as if i'm not

sure how much coming out of the administration would have influenced congress. it seems there was a war between the two. >> i didn't mention congress. anyway, thank you, allyson and lindsey. thank you both. it doesn't matter what happens after the new year. it will be more of this slow grind. we'll see. maybe something different. you never know, right? something different could happen. >> the thing with paul ryan in congress was actually pretty good. maybe that's a step towards more compromise in the action and getting more effective change. more tired of nothing. there could be something out there. not going to kouchblt on it. >> some people didn't feel quite so great about it. where do you live, here in new york? >> yeah. >> all right. thanks. deadly weather across the central u.s. tornadoes, blizzards, heavy rain killing more than 20 people in three states. more bad weather is on the way. the weather channel's kelly cass joins us with the latest for

kaes. kelly? >> good morning, guys. we saw more tornado deaths this month of december than all the other months combined. so it has been an awful time these past couple of days. the threat in the east. new orleans still under tornado watch until 8:00. eastern arkansas, it's not just a severe threat with damaging winds, hail, isolated tornadoes. flash flood threat from arkansas all the way up through southern missouri and even up towards st. louis watching that mississippi river. for today you have the red zone. the danger zone from tennessee down towards the beaches and the florida panhandle could be nasty storms coming through. atlanta watching the western suburbs later on this evening and tonight. panama city still looking at the threat for severe thunderstorms. make sure you have a way to get the warnings. so many people traveling from

the holidays. by 95 looking at showers, thunderstorms, wintry weather moving through parts of upstate new york and tomorrow night into the day tomorrow. parts of maine could see several inches of snow while it's all rain through the carolinas. thank goodness the severe weather diminishes as we go through the day tomorrow. isolated severe weather and flooding is going to be a concern. over the last seven days we have been inundated with very heavy rain. the ground is saturated. we're still looking at an additional 2 to 3 inches and in some spots 3 to 5 inches of rain from birmingham to montgomery and tuscaloosa, alabama. it could be a flash flood day. watching parts 69 ohio river, 1 to 2 inches of rain there. further to the north to, say, chicago, we're talking about an icy threat. half an inch of ice and that could lead to power outages. back to you.

>> thank you for that, kelly. when we return, it's your money, your vote. we're 34 days away from the iowa caucuses. if you think things are interesting so far, you haven't seen anything yet. first, as we head to a break, here's a look back at this date in history.

welcome back to "squawk box" this morning. polite cam neical news, iowa ca are coming up in 34 days. john harwood will break down what's going to happen over the next 34 days. >> andrew, we have a real sprint over the next month. it will determine whether ted cruz can hold his lead. if he does that, that is a race changing event. that will be if he can defeat donald trump, hold that lead, then all of a sudden the guy who is running as the greatest, the winner, the one who always wins will be wounded. how long does he stay in the race? can he rebound in new hampshire? can he hold with an iowa loss his lead in new hampshire? that becomes the central dam ma. who becomes the alternative either to cruz as the outsider

candidate or to donald trump and ted cruz? that's where you've got the intense competition among chris christie, john kasich, marco rubio as the alternative as the mainstream figure. on the democratic side hillary clinton has a very comfortable lead in iowa. a lot can change in the last moment. she faces ativity race in new hampshire for bernie sanders. more difficult race for sanders is going to be is there another place that he can compete with hillary clinton beyond the state of new hampshire. natural territory for him. he's of course from vermont. when you have the competition move to big industrial states or to the south, that is not bernie sanders territory. those are really the two key questions is can bernie sanders find another place to win. can ted cruz really jump out and

hurt donald trump and then change the fundamental dynamic for the past six months which has been trump in the lead. >> the other question i had given in the holiday, is anything going to happen in the next week and a half? is everybody going on vacation? >> next week and a half doesn't matter which is different from the last couple of cycles. the reason is that this is the latest iowa caucus and new hampshire primary we've seen in 20 years. they've moved it back. in 2008, 2012 the iowa caucus was on january 3rd. that meant this was the very last week and it was a difficult week to campaign because people are traveling, people are district strakted by the holidays. no, not much of significant importance or decisive portions. trey goudy will hit the road for marco rubio.

he's a well liked conservative. that's a boost for marco rubio. don't know how effective that will be. no, this next week is fairly quiet time. the real sprint begins after new year's because then you've got four weeks to go, you've got a couple of debates including a debate the final week on january 28th on fox just before the iowa caucuses. those are really going to be the big events and the big moments in this race. >> john, i don't know if anybody else is recording it, but howard kirk is reporting trump is ready now. going to spend a lot of money in the third quarter. inded up spending nothing in 2015. supposedly he's working with florida advertisers and people are doubtful whether he is going to -- because he's his own super pac, i guess his own bank account, his own super pac. do you think he's going to step up and spend boucoup come dolla. supposedly he doesn't have to do

autobiographical because he's a celebrity. do you think that's true? do you think that's going to happen? >> i'll believe it when i see it. >> expensive. >> this is why people question his long-term commitment to this race even after taking early defeats. he has been able to surf media appearances without investing the money in organization and advertising that other people have done. now is it impossible to win the iowa caucuses if you don't invest in an organization the same way people do? yes, if your support is big enough, people will just come out. if your popularity is durable enough, then maybe you don't need television ads. that's kind of the theory, the established theory of the race that's going to be tested. if, in fact, he at that ikstake iowa, does the air come out of

the balloon and how fast does the air come out of the balloon? >> while i've got you i want to ask you a question. what do you think the clinton camp thinks about the behive or opening up the hornet's nest and trump is ready to go after bill clinton and all the pick ka dill lows. is that something that will back fire on trump or will that resonate with people if they bring up all the names of all the women? >> might resonate with some people. the radioactivity with those issues is so diminished by exposure, by the passage of time. the more women you mention, the more you're talking about hillary clinton as a victim figure. >> people don't think -- trump has a way of saying things that other people, you know, they would say, oh, no. >> that's true. >> no one would were say that. i mean, he could just go nuclear

on -- >> he could. he could. >> and then -- and then everyone will play it up because he may use some yiddish word that means something again. >> yeah. >> they'll play it up. all of a sudden it will be everywhere and all we'll be talking about is paula jones or something. >> first of all, that can't hurt hillary clinton in the democratic primary. donald trump goes after hillary clinton by using bill clinton and all of those issues, that -- that would be a polarizing event that would rally people to hillary clinton's side. if donald trump got in the general election with hillary clinton, would he have the capacity to bring attention to that in ways others can't? certainly he's proven that, but -- >> yeah. >> -- the idea that donald trump could be competitive with hillary clinton in a general election is pretty farfetched. so i can't see the clinton campaign trembling in their focus groups over that one.

>> yeah, i don't know about that last statement. you never know. you never know, right? but, anyway, we all have our thoughts of what's possible. >> merry christmas, joe. >> you, too. happy new year. coming up, it's going to be so much fun next year, harwood, as we know. the associated press says the china slowdown is the biggest story of the year. we'll have -- i love this. hearing this. as we head to break, a look at last week's s&p 500 winners and losers. ♪ ♪ conquer the weather. don't let it conquer you. with the capability and adaptability of lexus all-weather drive.

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first thing out of bed this morning. >> so hot to trot on this. >> that's why -- >> it's fascinating but it's not a 5:00 a.m. read. >> it's such a brilliantly written story. give the credit. jessica pressler new yorker magazine. there was a piece in the new york post about a guy who had spent $135,000 at scores. he was very upset and sued them. it turned out there was almost a cadre of two, three, maybe four

almost like a gang of strippers that were actually -- this guy had a real claim. not only him, lots of them for years, they were spiking guy's drinks with mali and keta -- what's the -- ketamine and taking and then just swiping their card. the guys would black out. $10,000 later they would never really want to call them on it because, of course, a lot of these gentlemen were married or other things. so they were making off like ban di dits. the police would say, i don't believe you, blah, blah, blah. with this one fella, they caught them on tape. it's a fascinating story. they call it a modern robin hood story. i don't know if that's the case. >> that figures, that's new york magazine. >> wall street -- >> no, from the stripper's

perspective. >> my first response, shod and freuda. it's not right. >> my first is whether scores management -- >> well, scores -- >> they had no idea. >> rogue strippers? >> other strip clubs. these women would go to high end hotels and restaurants, buy drinks for men and then say, hey, let's go -- let's like go parrot at t party at the strip club. >> they were employees of scores. >> they were freelance. >> escalades and things were waiting for them. they'd take them into the cars, bring them to the places and start swiping the cards. they would do it, by the way, day after day. some of the men thought they were dating the women it sounds like. they would try to take $10,000 one day? >> it all happened afterwards? >> they're not checking every day, at the end of the month. they grab it a couple of times at a shot and in fact in one case they were doing it off a debit card. the guy says he has to pay his

mortgage and he's trying to get the money back. on a chase debit card. terrible, terrible story. amazing story just from a story telling -- >> you can't control yourself. what do you mean terrible? >> terrible what happened to these gentlemen. i'm saying it was a fascinating story. >> written all over your face how sad you are for these guys. >> you know? you did mention guggenheim. >> why? >> because apparently one of the guys was from guggenheim. they would say they worked at guggenheim. >> oh, the firm? >> there may be lawsuits. the wall of worry as we're coming into the new year. what stocks could cause problems. as we head to break, check out some of the top business stories in 2015. associated press, china slow down, collapse of commodity prices, end be of free money and the volkswagen cheating scandal. we're back in a minute.

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you haven't so far. the next wave of the internet requires the next wave of security. we're ready. are you? analysts lowering earnings estimates according to facts that if the s&p 500 reports a decline it will mark the first time it's seen three consecutive quarters of year over year earnings since 2009. joining us for the earnings in 2016. zach, we ignore the fact that three consecutive quarters of declining earnings is an earnings recession. why aren't we talking about this? >> the primary reason is that market bulls will pin it to

ener energy. there's a lot of truth to that. the energy drag, if we take that out of the picture, there's not three consecutive quarters. q3 and q2 would be positive. that's perhaps in my judgment the primary reason why this earnings recession story hasn't really taken off as much. >> but you can't just x out whatever sector you don't like or whatever sector isn't growing the same way that we used to see thompson break out an earnings number. x financials when the banks were sluggish. we have to incorporate energy because it is a large employer of people and formerly large source of growth for the country. throwing energy in there, what should we expect for fourth quarter earnings growth? and has enough been telegraphed, in your opinion, about how weak

it could potentially be? >> i couldn't agree with you more. i'm not a big believer in xing this or that sector out. if we have to look at the market as a whole, we have to look at the aggregate index picture as a whole. when you look at the s&p 500 as a whole, total earnings for the index in q4 are expected to be down about 7.1% on roughly 3.3% lower revenues. and we classify the index a little bit different in turns of the constituent sectors. we have 16, the official s&p has 10. after 16 the sectors 11 will have lower earnings to the year earlier period. yes, energy is a big drag in q4 as well. even on an x energy basis it

will be modestly negative. they'll have year-over-year declines. overall a pretty grim earnings picture. >> overall earnings per share does improve when the number of shares outstanding decreases. normally we see the largest buy back activity in november and december which are represented by the fourth quarter. i'm wondering if you think we'll see buy back activity actually materially affect what some of these companies report? >> the buy backs have been a big driver of what we have been seeing at the bottom line eps number. the growth number that i are quoting and what we track here at zacks is the net income. we look beyond the eps. the goal is to adjust for the defect that the buy back activity has been having in the growth picture. so, yes, with buy backs the eps

picture will be slightly better, but a line above that, the net income level, it's not pretty. >> well, we'll get some data points in a couple of weeks' time. sheraz mian, we appreciate your time. >> thanks for having me. coming up, this is the time to return gifts. what consumers are bringing back and the high cost retailers are paying. "squawk box" will be right back.

welcome back to "squawk box". the holiday season begins the season of gift return. according to reverse logic company, last year returns cost u.s. retailers $920 billion. fascinating business. you don't think about the return business. our company is based on returns. is one season different from the next or is there a certain percentage that's always getting returned? >> a certain percentage is always getting returned. most people don't think about this. 10% of all goods get sold get returned. it cost retailers billions of dollars and often ending up with billions of pounds of waste. >> are there some type of

products that get returned more than others. are high priced products less returned? how do you see it? you work with the top ten retailers? >> 20 of the top 100 retailers in the country. >> is there a price point at which people won't return? >> general italy lower they are, once you get to one $10 people are less likely to return it because they value their time. higher value products they return more often. consumer electronics which are more complicated and expensive get returned a lot and clothing gets returned a lot especially online. >> do people return stuff that's broken or how often do people return stuff they have worn or broke themselves? what do you do about those people. >> so the goods that get returned are often not broken. people think they are broken items but majority of goods that get returned are fully functional and in like new conditions. some opened the box and ended up getting that samsung or iphone

and want to go back to the other platform. during the holidays you receive clothing that doesn't fit or the wrong color, not your style. >> tell us, though, about this return economy, if you will. when somebody returns and i temple that's normally sells or retails at $100 how much is that product now devalued at. >> so it depends on the type of good. but certain goods if it's a higher value product and a stronger brand like an ipad or iphone it will come back and we can resell it for, you know, 80% of the value if it's been opened box. however if it's a lower brand that's not as well-known and clothing and $20 originally it may be worth pennies on the dollar. >> what's the weakest part of the return chain. there's so much from the consumer side to make the return and print out the label and the retailers are trying to make it

easier but it's hard. >> it's pretty difficult. you look at a lot of traditional solutions that are in place for retailers and returning as a customer is just the beginning. these goods end up going back to a store front where a clerk processes it, the clerk will send it back to a distribution center where it sits then gets sent to a liquidator then to a smaller distribution center. >> what's the true cost for the return. has to be minimum five, ten bucks? >> right. a lot $10 to $20. because of the antiquated solutions. they end up throwing away the goods doesn't make sense to send it through this reverse supply chain or reverse logistics. >> last question before we go. when you look at all the retailers who is doing it the best? is it amazon.

are they the best on the return end? is there somebody else beating them? >> amazon is great at it. you know, being an online retailer they get more returns in general. the return retail spikes more. they had to get good at it. best buy has focused on it a lot. they are cfo has put a big focus on it. those are two of the better people. >> thank you for coming in. fascinating stuff. >> coming up this morning's top stories plus we'll welcome today's guest host private equity power player scott sperling.

checking out the listing on zillow i sent you? yeah, i like it. this place has a great backyard. i can't believe we're finally doing this. all of this... stacey, benjamin... this is daniel. you're not just looking for a house. you're looking for a place for your life to happen. zillow.

>> providing a rare glimpse at its prime membership numbers but will millions of new prime subscribers translate to a boost in the company's bottom line. record year for m and a with global volume topping $4.3 trillion. scott sperling joins us to talk about the appetite for deals in the new year. extreme weather alert. deadly tornadoes rip through texas over the weekend. the central u.s. getting slammed by high winds and heavy snow. the latest on the storm owes path as the second hour of "squawk box" begins right now. >> welcome back. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with reed

sorenson and kayla tausche. becky quick is off. we have a developing story. deadly weather across the center u.s. things like tornadoes, blizzards, heavy rain. killing more than 20 people in three states, more bad weather is on the way. western oklahoma is bracing for about a foot of snow today. blizzard warnings remain in effect in many parts of texas. and missouri is likely to see more heavy rain and flooding as a result. there's travel trouble across the country. about 1500 flights were cancelled nationwide yesterday, another 6,000 planes were delayed. we'll bring you a live report from the weather channel's mike seidel and he's down in texas. he's in the snowy part of texas. he was on the news last night and wearing goggles and getting blown around. it was dramatic. >> same here. next week. >> or next year at this rate. >> next week. >> amazon says more than 3

million customers joined its prime service during the third week of december alone. nearly 70% of amazon users shopped using a mobile device and analyst estimates that amazon will capture more than half the e commerce growth in the united states this year. shares of amazon have been up slightly in the pre-market. unchanged from when we checked them an hour ago but they are up just about.03%. we'll talk to victor anthony at the bottom of the hour. fedex did not deliver all its packages by christmas and was forced to run deliveries on december 25th to clear its backlog. a spokeswoman for the shipper blames unforeseen volume and severe weather. u.p.s. telling the "wall street journal" it finished all its deliveries on christmas eve. it did not have to make any deliveries on the holiday. certainly an interesting development for all those people who did not get their packages very sad for those kids who

thought santa would deliver by christmas day. let's get a check in on the markets this morning. u.s. equity futures have been in negative territory. still are. dow would open into the red by 84 points if it opened right now. s&p by eight points. the nasdaq by 17. we did have a negative finish or mixed finish. nasdaq was up on christmas eve on a shortened trading day. oil down 2.5%. brent down 2% as well. brent right now one. . cent above crude. >> don't you think it's more amazing most of the time santa is able, one person to deliver all those packages. so when weather hits or something and maybe it doesn't work i think people can understand it's a very difficult thing to pull off. >> i agree. but the sale of these companies is so huge that three percentage of their packages, 10 million packages. >> you can cut santa a little slack. you try it. >> i couldn't get around the world.

>> what about the chimneys. he's fat. >> i never tried. but i should. >> plus it's carcinogenic. 2015 has bean record breaking year around the world for mergers and acquisitions more than $1.3 trillion deals topping the previous high setback in 2007. that was not a goodyear, though. so will 2016 be another big year for m and a. scott sperling is here. he's a board member of madison square garden. and joe fineman is here. is 2007 analogous to 2015? what does this important tend for 2016. >> for the reasons you cited i hope not. what we've seen in the m and a market has been a movement to

acquire revenue growth when organic revenue growth is very hard to come by. and it is being powered by the fact that the cost of capital is at a point where you can pay reasonably high prices and have creative transactions. what we saw starting about two years ago was that the stock price of acquirers started to go up when they announced the deal and that's something we didn't see in 2007, that's something we hadn't seen in a very long time. that's continued until very recently and part of it is affected by the overall market conditions. i think as we look into 2016, i'm not sure organic revenue growth is any easier to come by. i don't know if we're late cycle or mid-cycle. it's very hard to call. if you look at duration we're late cycle. so it's a very hard market to call. but the one thing that i'm pretty sure about is that

organic revenue growth will continue to be something that companies struggle with and they are going to look for acquisitions, particularly acquisitions where they can then refocus. if you look at dow, dupont, you look at a number of these acquisitions, it's acquire, cut into entities that are more efficient and then go forward and try to have better organic revenue growth because you're more efficient competitor in a more focused area. >> isn't there something fundamentally wrong with the economy these deals aren't being done from any sense of strength, it's done from a sense of weakness. it makes it harder for your business. >> it does highlight something we've seen more broadly which is businesses have been pretty sluggish in doing capital spending. they got taking much more of their money, buying back their stock, doing things like that. there's not a lot of great investment opportunities out there. it does worry us a little bit

because cap x that ultimately is the source of a lot of productivity growth and productivity growth has been sluggish in the last couple of years. maybe that's something -- >> what's your take on what will happen in 2016 broadly speaking? >> the economy is okay. we'll see a continuation of what we've been seeing. moderate growth by the standards of past cycles but by current cycles enough to continue this gradual progress. we'll get further interest rate increases by the fed. so there's cost of capital being very low. stay fairly low on the front end. >> i just alluded to it. private equity struggled to make a lot of deals in the past even though there's a lot of deals mostly strategic. a, harder to get a loan. that's one of the things we've seen in the past couple of months. >> i would say clearly the amount of debt that you can put on any individual transaction has now been limited by the regulators pressure on the banks to stay within approximately six

times total debt to the dow or gross cash flow if you will of the company. that in and of itself hasn't st. that's not necessarily a bad thing for our industry. i think that's a good thing. so as i look at it it's a great time to sell. most of us have had very significant realizations in the last few years and you can find interesting transactions but they are smallerer and takes a lot longer to put them together. >> when you guys exit, though, a lot of these companies end up being ipos and then you put them out from wall street to main street to try to get people to buy into the shares. would you say that private equity is rushing to the exits means that you're saying don't buy this. >> so, an ipo is almost never an exit for us. an ipo is an enabling event that

allows us to delever the company and then hold that company for a number of years in most cases. sometimes sales of companies and companies we've held for reasonable amounts of time. we path company out for an ipo. we use the cash that comes in usually to delever the company. you have a conferencecy for acquisitions. then over some period of time so for us nielsen, are ao mark are two examples of great companies that had enormous growth during our ownership period, public and took us a number of years to actually sell our stock because we thought that the growth there was still good. >> rates stay low, cost of capital is cheap. multiples are high. it offsets it. that should be an indication to guys buying back stock. you're not doing a lot. multiples are high. >> again, our job is to find things that are not competitive in that big universe and so for private equity it means how far to work a little harder, you

have to take longer, how far to put things together, you have to look for more complexity so it's a less simple story that's attractive. and that's really the point that we're at today in today's market. >> one of the things i hear a lot of private equity market guys talk about if they make acquisitions in 2016 they may start looking more internationally than they have in the past year because for the opportunity. from your perspective as an economist is there an area where you say to your self, you know what the value is just there? >> there are parts of the world where you've gotten beaten up a lot and where the prospects -- maybe early stage of the u.s. business cycle. while we think it will continue it's a more mature phase. other parts of the world even in developed parts like europe, maybe earlier phase, greater opportunity, maybe valuations aren't quite as high. >> you're sticking around. >> josh, thank you for being

here. >> thank you. >> a lot more to discuss in just a little bit. >> coming up your playbook for the new year. a look at biotech and drug pricing for 2016. prediction for currency and commodity markets. and a wrap up of the big holiday retailers and challenges they will face in the new year. "squawk box" will be right back. sure, tv has evolved over the years.

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as 2015 draws to a close cnbc is breaking out the 2016 playbook looking at ways you can make money next year. there are no guarantees, ways that we think you might be able to make money next year. right? we don't guarantee that these are going to work. >> some ideas. >> some ideas. this hour a closer look at biotech and pharma. here's meg. >> reporter: 2015 was a rocky year for pharma and biotech. it started off strong but hit a slow down in the second half. here's what to expect for 2016. ipos may slow but m and a is expected to continue. while 2015 saw some massive mergers, 2016 may see drug makers focusing more on building pipelines.

analysts expect drug giants to deploy some of their serious cash hoards while incyte is a target. ipos slow their pace. biotech has seen hundreds of new companies entering the public market in the last few years. experts say if this run ends it will be more due to lack of supply than lack of demand. and biotech gets binary. the coming year will bring a number of events that could make-or-break certain biotech stocks. so, a lot has changed after the big bull run we've seen in the last five years. people are saying it's a stock pickers market. >> usually people that manage

money and pick stocks, they are the guys that say it's a stock pickers market. most say that. every year, isn't it? every year. >> supposedly. >> meg, stick around. >> sure will. >> for more on the pharma playbook for 2016 we're joined by barbara ryan. i told andrew i was going to channel -- >> i'm afraid, very afraid about what's to happen. >> barbara, we're in the political season. we got things like -- we got a lot of drugs that cost $100,000 a year. we see another story from mainstream media their monthly expense might be $15, $20, $25,000. you think there are rogue players that abuse the system and in general it's not abused

is that right? >> there's two different things. there's the price of innovation of new drugs and then there's the inflation. so that's where i sort of point to the rogue players so what's been pointed to wihere an old drug has increased in price by multiples. that's not really what we're seeing the industry do. by the same token we have a lot of drugs coming to market which provide tremendous value to patients and are expensive. >> the value is a relative term. most patients couldn't pay for the drugs that -- what's the hepatitis. >> $84,000. >> here's my point. so we want innovation to continue. we want people to be able to recoup their huge investment in 12 years. still if you have 12 years with

no competition what is to say that that is the actual price? why not go 150? >> you're talking about no competition. >> it's is going to be paid by -- >> bless you. >> it's going to be paid by medicare where you can't even negotiate prices with medicare. >> i made so much progress. i feel -- >> i think there's no doubt that the pharmaceutical industry, biopharmaceutical industry needs to do a better job of documents what the true value of its medicines are. so it's very easy for politicians to point to $1,000 a pill. what needs to be discussed is your avoiding a liver transplant. >> there's even more. you would hope that these companies given this 12 year

would plow it back into research. yet many plow it back to marketing the doctor or advertising, plow it back into getting extended release version where they don't develop anything new. they just market an extended release version to extend their patent protection. >> most of the large companies spend billions and billions and billions of dollars, multibillions of dollars developing new drugs. >> i know. >> yes, they have marketing expenditures as well. but not at the exclusion of investing. one of the thing that's driven the success of the sector that meg just talked about has been innovation. so one of the reasons that the biotech/ipo market has been strong, right, is because there's a lot of innovation. those companies are developing new drugs. they are not marketing. >> when did statins, when did they develop statins? >> in 1984.

>> for 30 years we saw these guys live off statins. not developing any new -- >> each statin was more potent than the one that came before. >> the other point that barbara is making is that the cost of failure is very high in this industry and there's lots of failures so there's a lot of drugs that go into development and various stages of testing that don't make it and that money gets effectively flushed although some of the basic research may be available for some other things they do. so when they do have a blockbuster then they are really looking at how do we recoup so that overall we can afford to pay for all the ones -- >> some seem -- >> you make a great point. how many industries would invest the money that this industry has with a 93% failure rate. 93%. >> there's a low probability and some of the markets we want them to work on have very small

populations. so the cost per to amortize becomes -- >> my question for you is when you look at valeant, he would occur the pfizers of the world don't do r and d. they outsource r and d and pick-off the big ones and the other guys lose. >> well, i think there clearly is an inverse relationship between efficiency and size, right in the industry and i think that we've seen that. i think that the pharmaceutical company of today and the future looks at it from a portfolio perspective, so if i'm pfizer i don't care if it came from my bench or somebody else's bench

what i'm looking to do is invest the next dollar in the best opportunity i see. >> should we lament the idea that the big guys are not plowing the money back into research but plowing it into acquisition or marketing piece. >> at the end of the day they are investing capital. >> they are doing both. >> is there any truth to the notion that by setting 12 years -- >> buy exclusivity. >> for a big pharma company if there wasn't that protection you would have all these other people coming in. >> money chases returns. if you make that equation then the returns are lower and there will be less money invested in it. that's the bottom line. >> normally market forces work to bring in competition and innovation. >> there is competition. you know new innovative drugs are competing with existing

drugs. there's price competition. >> we don't set that type of drugs in any other area and seem to do okay in terms of getting innovation. >> do you argue why drug prices should be so high because there's that patent protection? >> i decided to take that side today. i don't know why. i usually don't. >> i'm keeping my mouth shut. >> thank you very much. >> thank you. it's been wonderful. coming up, when we return the central united states bracing for blizzard conditions following tornadoes and floods over the holiday weekend. we'll get a live report from the weather channel's mike seidel in texas right after the break.

deadly tornadoes in the central united states over the "weekend now" being followed by a blizzard. the weather channel's mike seidel joins us from amarillo, texas with more where just a few hours away from you, mike, it's seemingly tropical but quite a different story from amarillo. >> reporter: yes. over the weekend, dallas hit hard. the east side on saturday evening, 11 deaths from tornadoes there. following the deaths we had on christmas eve down in the deep south in mississippi and the

state of arkansas. so we got more severe weather this morning along the gulf coast, another tornado watch is out. it's not quite as potent but all heading across the deep south. meanwhile the flood and the flood threat continues. millions under flash flood warnings or flash flood watches. we had 13 fatalities from flash flooding from the midwest to arkansas. that's a continued story today. ice and snow, chicago under a winter storm warning, just heard they put out a groundstop for o'hare international. we had as much as two feet of snow in new mexico. lubbock, texas had 11 inches of snow. that's more they get in an entire winter. 82 mile-per-hour winds. all that being blown around to shut down interstates, interstate 40 westbound from here to new mexico. the i-40 eastbound to oklahoma city and parts of i 27. these rods will get back open

today. kids have gusted here in amarillo, 50 to 60 miles per hour over the past day or so are now running about 25 to 30 miles per hour. travel today not great across the midwest. then back east all heading towards the eastern seaboard over the next 24 to 36 hours. big change in the temperatures. many of you have had record warmth in december. we know that. new york city 72 christmas eve. 66 christmas day. as we get to the first of january latter part of the week everybody will cool down to average or below average. so the honeymoon is over. on a small business note i can pass along that here in amarillo just down the road the waffle house was closed last night. i couldn't get dinner. i've never ever seen a waffle house close except a category 3, 4, 5 hurricane barreling into town. >> i've never seen a waffle house close. christmas day one of the biggest days of the year for waffle

house. that's quite a telling anecdote. treacherous in a lot of the country. stay safe. a lot of people have been lamenting the lack of snow. you have to remember them the winter is long. >> it is. waffle house indicator is a real thing in small towns that suffer events like a tornado when the waffle house re-opens you know you're on your way back to normality or normalcy. i myself have not complained. i love this. if we can have south carolina weather -- >> all year round. >> what if the low for the year was like 48? >> weird. my kids want to go sledding. >> i love people saying they love ties and snow and 5 degrees. >> once or twice a season. >> hitting your head against the wall. just to know you can't enjoy the sun -- >> you want to be out on the golf course. >> no. i haven't done that all fall.

i just like it. el nino. >> coming up, preparing your portfolio for 2016. boris strasburg has a rundown of what to watch. take a look at u.s. equity futures.

checking out the listing on zillow i sent you? yeah, i like it. this place has a great backyard. i can't believe we're finally doing this. all of this... stacey, benjamin... this is daniel. you're not just looking for a house. you're looking for a place for your life to happen. zillow.

it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv.

♪ welcome back to "squawk box" right here on cnbc first in business worldwide. saudi arabia posting a 2015 state budget deficit of $367 billi billion. one of the kingdom's officials say this number is considered an acceptable figure under the circumstances given the price of oil. holiday sales rising 8% during the traditional black friday to christmas eve shopping season according to new data from this

morning coming out of mastercard. chipotle near boston college is re-opened. this is a location where 136 customers became sick with the norovirus. the ceo plans to have lunch at the restaurant today as a show of confidence. >> big holiday weekend at the box office. "star wars: the force awakens" crossing the billion dollar mark in ticket sales 12 days after the worldwide release and that was the fastest in history for a movie to top that milestone. disney's film turning in the biggest christmas day box office of all time with 49.3 million in sales and second place this weekend the comedy "daddy's home" starring will farrell and mark wahlberg and that brought in 28 million in its debut weekend. all the culture flicks that andrew goes to see that just shows you where we are in time. "daddy's home."

what was the other one that mark wahlberg was in. "ted." >> crushing "joy." >> "room" is still the best film of the whole year by a square mile. if you have not seen "room" -- >> it looks dark. >> it's dark but a physical, emotional roller coaster. it's a journey. >> andrew's entire emotional instrument was unclogged during that pup cried. wasn't it? >> i cried. my heart came out of my chest. i laughed. it's one of those movies where you just disappear for two hours. >> he's exhausted. >> i was dragged to "star wars" by my wife. >> and? >> it's good. i'm a "star trek" fan. >> you can like them both. >> what is age appropriate on

"star wars"? we put on the first, for a 5-year-old and my guys -- they know the story. 20 minutes in they look at me like, this is boring. and i was so depressed. i didn't know what to do about it. >> in the very first one? which one. >> "new hope." >> very first one. i thought we would start then. >> i just watched it a week ago and i loved it. i have a hard time staying awake during any movie and i loved it. >> it's great film. >> i've never been a lover. >> next generation or regular "star trek"? >> regular. i'm looking forward to the one that's coming out. i'm psychiatred up for that. >> boris, you're here to talk about currencies and the move in crude oil.

what should we expect in 2016, pretty much every currency trade is really crowded at this point. >> it is. it's definitely very crowded. i am of the camp that i think the fed is much more likely to do one and done than do this normalization cycle that everybody seems to be in concert with. my partner dug up a quote by bridgewater which i thought was interesting. in 1937 when the fed tightened rates and created the second great depression, made a huge mistake. bridgewater brought it clear when the first hike was not detrimental it was the second and third one three months later and six months later that destroyed the economy in '37. sent the stock market down 50%. created the second great depression. i'm not anticipating that kind of response from the economy but i think the fed is much more cognizant of the vulnerablity.

>> the fed hassing eight meetings next year. you don't think one single meeting they will raise rates. >> at best they may do six months into the year another hike if the economy is on a smooth trajectory up. will they staop before the election. >> up don't expect the unemployment rate to continue to go down. >> i think it's -- everything that we're looking around, look at the businessmen that come on your show. they say demand is not there. i don't zmoosh -- >> we got the five. >> best news in employment is behind us. we won't see massive organic growth going. we still have momentum. 200,000 a month is the best scenario. >> what's the ten year. >> that's it. i always say the fixed income markets are the smartest ones in the world.

they are not believing fed. where are the rates? the other thing that my friend pointed out which makes a lot of sense everybody is forecasting $20 oil. that's inconceivable with higher rates. if you have $20 oil there's no way we have higher rates and no way we have fed hiking. we go to $20 oil but it's clear oil is not going to 50 at this point. oil at best will be bouncing around the bottom. you see a commodity situation that's depressed hard to believe the fed is in a hiking cycle. which means all the dollar trades will be suppressed. i don't think the $will collapse in any way, shape or form but it won't rally and you won't see europe parity. >> every strategist in january and february of this year said we would see euro parity by tend of this year. >> right. i'm always on the opposite side of convention and that's been a relatively decent --

>> huge global warming. >> that's the one trade. >> you seem to be -- i don't understand why we're still in this 2% horrible economy that you're talking about here after all you're in charge. why are we still growing slow. >> if you go back to the depression. the lesson of the depression when you have a deflationary event -- we have massive wealth constructions. did you see "the big short"? >> no. >> when you blow up tremendous amount of wealth it takes far, far longer than you think to recover from the economy and monetary the stimulus alone will never do it. give me a couple trillion in fiscal spending. we are seeing actually this budget is better than it was the year before. >> you want government stimulus not private-sector stimulus. you wouldn't unyeeincomeunencum

private -- >> who is going to build that? >> none of the trading went to that. >> we need that. >> how do we know it will go there this time. >> if we have good congress we would. >> congress' fault last time. all right. you do have contrarian thinking. >> we'll never agree. >> nice to see you sir. >> when we return clicks versus bricks a look at the holiday retailer results for retailers like amazon and spending at shopping malls.

retailers are crunching their holiday sales numbers but there are still three days left to book those sales. courtney regan is here about what's so important about this final week of the year for retailers. >> most of the attention for the holiday season is targeted between thanksgiving and christmas but this week is still a very important one. last burst of shopper traffic and spending before the quieter winter months set in. the day after christmas is

expected to rank as the third busiest day. but only the 10th for dollars spent. national retail federation reveals 40% of holiday shoppers plan to stop in stores this week. 43% plan to shop online. earlier on "squawk box" we focused on the business of holiday returns which son lie one part of this week's shopping surge. there's in season merchandise always left after christmas passes and retailers want to move it. they are slashing prices online and in store to do that. apparel the most discounted. this year's warm weather is making 75% off much less of a rarity. many americans make shopping the first days after christmas as much as a tradition as shopping the days around thanksgiving to take advantage of those deals or in some cases cash and gift cards. gift cards, laws prohibit expiration dates. retailers hope they cash in cards quickly. retailers can't recognize that

revenue until used. only 20% plan to use gift cards right away. >> stay around. stick around. we'll continue talking about it. record breaking holiday season for amazon. more than 3 million customers joined join joined many amazon prime. he raised his price target up from $727, now you're at 797. it's going to keep going up. is there a time you'll say -- will we have an apple moment with amazon? >> amazon is in the early point of consolidating the retail segment of the u.s. and outside of the u.s. the value proposition amazon provides is unmatched by any retailer online or offline.

they don't get credit for customer service. there's not another retailer that can provide what amazon provides. >> when is the moment where they turn the dial on prices and what happens when they turn the dial in prices? do people stick with. yes you will get some real profits. however, do people actually go to any of these other services at that point? >> well, you know, i don't think -- low prices is really part of the mantra what they've done for the past 20 years what they will continue to do for the next 20, 30, 40 years from now. i don't anticipate amazon will turn around tomorrow and say we're going raise prices. it's a combination of all the different services they provide together. i think they figured out how to own customers and that's, you know, something that i think entire retail industry hasn't been able to figure out how to do. >> one thing they got into was

media. one of the things they have been touting over the weekend they have a new show called "the man in the high castle." they say it's the most watched thing ever on amazon. they are knocking out the numbers. what do you make of that kind of thing? >> that prime video, they are investing, spent considerable amount of morgan to try to get that service to compete with netflix. >> do you believe that people actually are subscribing to prime because they want the video or do you think -- >> they want the beatles song? >> initially the shipping but then the video keeps them. it's a retention tool. so the video, the music as well. all retention tools that keep customers locked into the amazon eco system. >> amazon never has told us how many prime customers they have. but times they release

information we added 3 million in the last week of december. last year they said they added 10 million. what does that mean to you. >> you have to be careful where weekend those amazon press releases around christmas. so i've learned from my mistakes of interpreting those press releases. they do have around 50 million amazon prime users globally. >> if amazon prime, you go on your smart tv and you can find amazon to watch this -- >> you can watch this show and others. >> they would know that we are? >> you put in your password. >> log in your e-mail. >> on this device. i can watch this. >> you can watch this show. available to you. watch it on your phone, tv, watch it wherever you like. >> i think other people can benefit from my enlightenment. thank you. that's interesting. what's it about," man in the

high castle fts? >> it is about, if i understand, it's if the nazis actually won and what the world would be like if they had won in world war ii. >> there's a sense you bundle the media, the songs which the company is touting the fact theft the beatles catalog. to roll it up into something where you get free shipping on something you're ordering. at what point, victor do they have to keep raising the price of this thing? the price of prime. >> you know, i think they raised it and, you know, their term was low. it wasn't much turn. but i think there's a lot of runaway. probably over the next several years will raise it again. >> airplanes, they are buying

airplanes or leasing airplanes they want to be the next fedex. does that make sense to you >> it does. nothing surprises me what comes out of amazon these days. last year was drones. so, you know, right now when you look at, they've had logistic issues over the past several years with u.p.s. and fedex. >> you think it's a negotiating ploy so they can compete better or get better pricing from fedex and u.p.s. or they just want to be in the logistics business. >> amazon wants to be in the logistics business. >> we got to go. >> they do it and break even they will be at $1,200 a share. never have normal metrics based on bottom line. they may never need that. >> they do have it. you do have -- stock price really supported by aws which is

their primes about, fast growing business. 50% margin business. roughly half of amazon valuation is supported which can be $100 billion revenue business within the next five, eight years. >> coming up a controversial coin toss call for all the monday morning quarterbacks but it's not on a player it's on that gentleman, coach bill belichick. sports is next. .

patriots lost to new york jets in overtime yesterday following a controversial coin toss. patriots captain wide receiver matt slater correctly called heads on the toss and made the controversial call of kicking the ball. jets scored a touchdown to win the game. here's patriots coach bill belichick after the game. >> why did you let them kick on the coin toss. >> i thought that was the best thing to do. >> slater said after the game that the decision to kick came from the top down and the only confusion that he had was to which part the direction was going to be. if you watch it you can see that's what he was saying don't we get a choice in which way we kick? at the beginning of the game no one questions deferring ever because you think maybe -- >> when you defer you get to decide which side you're on. that's why i think he was

confused. >> i understand that. monday morning quarterback that's where it comes from. if they shut down the jets all they needed was a field goal. >> all fourth quarter they shut them down. the theory is you keep them bottled up in their own side of the field, they kick the ball, you have the best kicker in the patriots, have the best kicker in football. get to the 35 yard line and you win the game. >> media is dying for a story and they wanted it that slater got it wrong. once we found out it was belichick. >> belichick has done this before. he's made this call before. i do like the patriots. >> i like the patriots too. but with adelman out it's hard. the jets kicked your ass yesterday they did in all respects at the line. you couldn't run. the jets were amazing yesterday and fitzpatrick is for real.

>> you're missing two safeties which makes a big difference. >> but they won from the snap all the way through it was the jets. the patriots are not as good as they were in previous years unless they get those guys back and the defense is not as good as the jets defense. >> i made the mistake of turning from that game in the third quarter to watch packers-cardinals. >> that was a pretty unsione si game. >> i grew up in st. louis i'll never forget the cardinals for moving. .

"squawk" goes shopping. new numbers this morning on just how much consumers spent this holiday season plus one of the year's hottest gifts gone wrong. videos of hover board failures going viral. "the force awakens" at the box office, 2015 on track for the biggest year ever driven by the latest installments of the "star wars" and jurassic franchises. >> flag on the play. peyton manning speaking out strongly denying a report he used human growth hormones. final hour of "squawk box" kicks off right now.

♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box". good morning welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin, joe kernen and kayla tausche. becky has the morning. we've spent the morning with scott sperling. now joining the mix is bob doll. we're now less than 90 minutes away from the opening bell on wall street. futures right now in the red. dow looks to open off about 96 points, s&p 500 opens down 11 points and nasdaq looking to open down about 19 points. check out the oil boards real quick. you'll see wti crude there, looking out 36.92. saudi arabia will have a pretty big deficit to deal with as they announce this morning. >> here are the stories investors will be talking about

today. holiday sales rising nearly 1% during traditional black friday to christmas eve shopping season according to new data this morning from mastercard spending pulse. fedex didn't deliver all of its packages by christmas and forced to run deliveries on december 25th to clear that backlog. the company blames unforeseen volume and severe weather. u.p.s. for its part said it did finish all its deliveries on christmas eve and did not make any deliveries on the holiday. developing story this morning, deadly weather across the central u.s. tornadoes, blizzards, heavy rain, killing more than 20 people in three states. more bad weather is on the way. western oklahoma is bracing for about a foot of snow today. blizzard warnings remain in effect in many parts of texas and missouri is likely to see more heavy rain and flooding. as a result, travel trouble across the country. flight aware reports nearly 900 flights have been cancelled today.

nearly 2,000 delayed. of course very popular if not the most popular travel week of the year, joe, it will cause quite a disruption. >> yes. move on to this. weather comes and goes. it's tough to run an airline, andrew. nice to able to finally make a little money. >> we want them to earn some money. >> yeah. >> fair profit. >> they didn't build that. s&p and nasdaq positive for the year. nasdaq a little more -- do you like that? that's something bob doll would say. s&p is positive for the year. >> seven years in a row. >> .1% and going down today to negative. >> he's talking about the dividends. >> the dow is down 1.5%. look ahead to 2016. our guest for the next hour is bob doll. bob doll and scott sperling

sticks with us. so, bob, looking at your forecast for 2015 i take issue with a couple of these things and it's kind of -- it's not your fault. it's not your fault. a lot of the things, the specific things you were right about, but one thing that you put here at the beginning of the year you said sir john templeton said bull markets are grow on pessimism. in 2015 we expect transition from skepticism to optimism. >> sure didn't happen. >> no that didn't happen. we'll try to figure out why it didn't happen. you look for solid momentum in the u.s. economy and low inflation. solid to relative firm. that's correct. pick up in consumer spending based on job growth. >> absolutely right. that's coming next year. >> you look for solid earnings. do we call 2015 solid >> absolutely not. >> except for oil. >> backed the oil and dollar

out. >> stimulus from low, commodity prices and financing costs, but i don't know how much stimulus we saw. still good liquidity environment, aided by stimulus. you grade yourself on some of these. you graded yourself on a curve because -- >> probably did. >> you talk about oil. you expected oil to be above where it started the year and it started at 53. you say that you're half correct on that. that's not half correct. you're off by 60%. >> you forgot the first half of the prediction they would fall further. >> but then close. >> we got that half wrong. >> that's why the other stuff didn't pan out miscalculation. >> same problem for next year if oil doesn't stabilize we'll have another problem. >> weird because we thought it was a tax cut for the economy. >> my view of oil will stabilize at a low level. and we will see some of the

consumer dividend get spent next year. consumer will be a little bit better. oil is less of a head wind. we'll be okay. >> as far as u.s. equities enjoy another good but volatile year you give yourself a question mark. too close to call. terrible year. >> we'll have a big rally this week. >> starting tomorrow. >> it's bean tough year. and you think similar next year. that doesn't -- that's not something to write home about? >> it's not. we're in a mature stage and ageing stage of the bull market. doesn't mean it's over. but we're in the latter stages, latter stages of a bull market tend to be bumpier, less breadth participation and some years they are up a little bit and some years now. >> but you don't see the exit that the fed is trying to orchestrate in a graceful way, you don't see that turning out badly.

you don't see -- we hear the real bears say we're 50% too high right now. you don't see anything like a 30% or 40% reconing? >> i don't as long as earnings are okay. china seems to be stabilizing. that was a big bugaboo. >> we've had like the best of all worlds for the past year in terms of oil prices, low interest rates, low inflation. what can improve next year to make it better. >> oil is the problem. it's the fall. it fell so fast the negatives associated with people losing their jobs in the energy patch, capital spending getting slashed in the energy patch. that overwhelmed the positive that yet still will come from consumer spending.

to u.s. lower illinois prices is still a big positive. we have this many consumers and this many producers. the producers got hit so hard and the consumers haven't spent money yet. >> the journal says people who didn't spend the money were people ememployed by producers, hours reduced, nerves on edge. what tells you that will ♪ >> less than 1% of americans work for the energy patch. the other 99% benefit from lower oil prices so if that 1% goes to zero i'm not. >> one of the things we lose you think 5% unemployment rate but labor participation rate is basically all time lows. we have enormous parts of our country where people are feeling uncertainties that are not dissimilar to what people felt back in the '08-'09 time frame. so we're not addressing some of the fundamental there's. when people talk about infrastructure spending and we go back to roads and bridges the

benefit from that at least in my view is not that significant. we need to invest for this next century and that remains retraining people so they can fill the jobs that aren't being trained that technically required greater technical skills. >> that takes a lot of years. >> we're not doing anything right now to do that. >> and where you guys stand on washington. i understand, you got eight years. you can't sit there bitching about it for eight years you don't get what you want. you got network within that environment. but there's perhaps another environment coming, you know, in this next election. do you think that the demand that people say is missing because of the financial crisis, is that really what's causing our problems or can we do things in the terms of unencumbering the private-sector? >> regulatory environment is a

choke. it doesn't push us. >> how about corporate tax policies. >> if you can dwell me in 2017 we will pass corporate tax reform -- >> if we can take dollars addressing some of the regulatory issues that have grown over the last few years and plow that back into investing in more productive parts of the economy, that would have an enormous stimulus effect, i believe. >> would begin to improve the sentiment that's so sloppy. this is the least believed economic recovery, least believed bull market. >> green span did research much said it's government activism. not just fiscal but also the fed. the fed has allowed these guys not to make any future investments by buying back stocks. get them out of the way as well. let the private-sector do what they do. do you believe that would work? >> again, from massachusetts --

>> i'm a little more agnostic on the fed. i'm not holding them for slowing down the economy. they did what they had to do. there are many things from a government policy perspective. >> not infrastructure, just -- >> again infrastructure in a different way. again, when we look -- in china when they build roads or railroads they create enormous new functionality because they are connecting things that aren't connected and do it at one-tenth of the cost that we do. a dollar of spending of fixing a road will not have the payoff for us when china spend that. >> they are not spending money they have. they are in debt. >> in both cases yes. >> we've been doing the same thing. >> they are building the first road new york to boston. >> that's hugely productive, increases. so we now need to invest -- our infrastructure technologically is not what you get in korea or

other places and that's a bit of a shame. democrats don't think that's the kind of infrastructure they are looking for. >> their rationale only last two centuries it was an anomaly. >> we do have a quick piece of breaking news. we'll do this after the break. got to come back after the break because we do have some breaking news for you. >> stay with us. >> coming up. valeant announcing mike pearson on a medical leave of absence after being hospitalized on a severe case of pneumonia. and ringing up the winners and losers from holiday retail sales when "squawk box" returns in just a moment.

tablets. keep it all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberry apple scones smell about done. ahh, you're good. i like to bake. get expert advice for your small business at att.com/small business.

welcome back to "squawk box". this morning, valeant pharmaceuticals announcing its ceo, j. michael pearson on medical leave. he was hospitalized with severe case of pneumonia on friday. valea valeant's board created a ceo

for the interim. >> he was in the studio just a week or two weeks ago. we certainly wish him well. we'll bring you more updates. valeant stock is moving on that news. problems for shippers. morgan brennan joins us with that story. >> we're going to call this role reversal fedex not delivering all its planned packages in time for christmas, severe storms in south. partly to blame. the company saying during the last week leading up to christmas it handled volume at quote far exceeded all previous records including unprecedented surge of last minute e commerce shipments. not disclosing how many ship. s missed christmas morning. extra operations on saturday as well. u.p.s. on the other hand does seem to have done better last week getting all of its packages delivered by 8:00 p.m. thursday. that was a big win for that company after two rocky holiday

seasons. we should get more info. we're starting round two of peak shipping season. e commerce returns and gift card purchases you guys have been talking about. guys, in other shipping news one last thing check this out. this is the cma benjamin franklin. biggest very well out of port. it docked saturday in l.a. has capacity for 18,000 containers. it's about double the average ship that calls at l.a. with a vessel longer than the empire state building tall, wider than a football field and 20 stories high. this arrival is a test run but it ushers in a new era of mega ships to the u.s. >> morgan present unanimous here in house. post-holiday shopping spiebtd online but brick-and-mortar stores didn't do so well. how did cyber retail finish out the season. cory pearson joins us now.

what type of data your company harnesses and how you get it. >> it's a predictive marketing platform for retailers that means we analyze the customer and purchase behavior data that these retailers have to help them anticipate customer preferences and automate more effective and intelligent marketing programs. we have our hands on 200 retailers data. we analyzed about $100 billion in transaction volume and 500 million customers in the past few years. >> where is the bulk of the traffic coming. is it people typing amazon.com into their search bar or coming from some other place. >> so it's a mix of things. we sometimes refer to google as the gateway of online shopping still. about 40% of transactions are driven from people who go into google, type in a search word and then go in to make a purchase. some from the organic search results that show up on the

screen. roughly 20% of the orders are driven straight from e-mail. as consumers we get a lot of ea e-mail. >> people don't go through and mass delete. >> it's true. it's one of the things we work with retailers quite a bit how to improve the he less vancy of that retail particularly in the holiday season. on black friday up to 25% of online orders came directly from consumers looking at what the deals of the day were in their in box. >> that's incredible because here we thought the age of direct to consumer marketing was dead that it would come from social media, it would come from pinterest or facebook or twitter. but you're saying that's not the case? >> definitely not the case. the marketers have embraced marketing on these new digital mediums. if you look at social it has a place earlier in the purchase funnel. so, for example, only about 2%,

even less than 2% of orders come from a user clicking on an ad on facebook or clicking on something on pinterest and immediately making an order. brands are using these social channels more for brand awareness right now. that's where they are having the most impact. >> what can you tell us about where sales for your clients have gone this holiday season? >> yes. so overall we're seeing that revenue, similar to some of the other stats that are being put out, about 13% year-over-year growth this year. also of note what we found this year more and more revenue shifting towards the tail end of the holiday season goes along with the shipping story you just told. if you look at thanksgiving weekend, that thursday through monday, cyber monday, that represents about 20% of all online revenue that comes over the holidays. but theweek or two leading up to christmas is another 25% of that revenue.

retailers are recognizing we consumers are procastinators. >> so it doesn't work, does it. click on things. i've never done that. >> which click on things. >> it doesn't work. people don't click. how do you build brand by just hailing the name of the thing. no one is clicking on a commercial or watching a video to build the brand. the name is there. i don't think this -- it's going nowhere. >> there's some merit to what you're saying. >> really? >> what you're seeing brands trying to figure out now is, you know, the first challenge is how do we get our brand in front of everyone on these digital mediums. it's a bit noisy. brands are going back to the basics. >> i find i look at the ads on instagram. a lot of them are for new apps

and you can get the app right there. i'm hitting the button. >> free? >> free. some of them cost money. >> app advertising is another big thing but as far as retail sales, retailers haven't seen a lot of revenue coming from those apps as of yet. while i think it's true it's not that there's no effective advertising on the social platform. >> wouldn't you prefer a live commercial on "squawk box"? isn't that the way to do it? >> i want free anything. >> the data, i think, is pretty conclusive. ad agencies move their customers into digital because it was the thing to do. most of it doesn't work. what works is search. >> search is very effective. e-mail marketing is effective. affiliate marketing is still effective. it's just been harder for retailers to out how to drive the click to conversion, immediate click to conversion on

the social platforms. it's still in its infancy. >> i want to find 20 celebrities that have plastic surgery. you see first one. you go the next one. every time i hit something an ad comes up. i only know one celebrity that has a lot of plastic surgery because i don't get through it. that irritates me. i won't buy their products. >> absolutely. that's the challenge that retailers face right now. >> do you know the other 19 that are well-known? >> i don't. >> you don't know. nobody knows. you can't see them. >> marketers have to fine ways to make the marketing smarter on each of these digital challenges. >> cory, happy holidays. >> blame you for this. >> we're working to fix it. >> coming up, hover board, the batteries they go on fire. not the only thing parents are worried about. the cautionary viral blood pressurer reel right after the break.

when we come back one of the year's hottest gifts gone wrong. hover board failures going viral. apple store downloads a big winner among holiday gadgets the. as we take a break look at equity futures at this hour. we're still in the red. "squawk box" will be right back.

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this morning. fit bit's app was one of the most downloaded apple's free app. shares rising. big news. valeant pharmaceutical says it's ceo will be on medical leave of absence. he was hospitalized with a severe case of pneumonia on friday. valeant's board is creating an office of the ceo to serve in an interim capacity. shares of valeant under pressure in pre-market trading. we just had him on the show two weeks ago and they have been under pressure beyond michael's health issues. alibaba buying a stake in a chinese online food delivery service. makes you wonder about, had pneumonia. makes you wonder about drug resistance, doesn't it? >> antibiotic? it takes a couple of days for it to work. >> you worry whether it works, whether there's resistant

strains. >> he might have -- a lot of people with pneumonia don't know they have pneumonia. >> the very stirs statement said it was a swar case. >> elderly people more than people in early life. want to get rid of a christmas tree in san francisco feed to it a goat. residents can bring their trees to a landscaping company city grazing where a herd of 80 goats will take care of the disposal. they will eat anything. chew on your clothes. i love them. they are so docile and very peaceful. the company says the trees provide vitamins and minerals to the goats and help prevent intestinal warms. they are limited to two degrees a day. they say goats will eat anything. talking about dwarf goats. >> maybe when i was younger at a

petting zoo. >> i would sit there in the middle and they all come up. they are very sweet and docile. you feel very relaxed. >> that's what you do during your free time? >> analysts are goats. >> all right. one of the most popular items this holiday season, hover boards. nbc's kerry sanders report on the videos of first time users going viral. >> reporter: hover boards one of the hottest christmas gifts, hard to get and hard to stay on. the self balancing scooter causing riders of all ages to lose their balance. since christmas, the videos are all over social media showing would be riders have more than a little trouble. falls ranging from funny. to down right dangerous.

one florida congressman said he tried one and ended up in the hospital. this 12-year-old took a spill and broke his arm. others on social media reporting a similar fate, count me in, #hoverboardfailed. bruised ribs. my poor father fell off the hover board and ice in the hospital. leading up to the holidays the consumer protection agency warned about the hover board about injuries that required a trip to hospital. that government agency encourages use towers always wear a helmet and proper padding when attempting to hover. but it's advice not everyone is heeding. >> hover board is on fire. >> reporter: federal safety regulators are investigating the boards after several caught fire. amazon recently pulled most brands from its site. overstock.com stopped selling them. still they are truly a hot item that many rider just can't seem to get enough of.

kerry sanders, nbc news. >> beware with those hover boards. holidays are a busy time at the box office. this year the movies were bigger than ever. julie boorstin has a look what's breaking records. i have to believe it might be "star wars". >> another day another "star wars" record. this was the biggest movie going week in u.s. history with a gross of $300 million and second biggest weekend ever following last weekend according to rent track. "star wars" fork awakens think it $1 billion global market record 12 days on sunday helping to drive the year-to-date box office up 7% over last year so far. plus some strong "star wars" alternatives. paramount comedy "daddy's home" grossing $39 million in the u.s. "joy" grossing $17.5 million.

"concussion" grossed $11 million. but paramount "the big short," it expanded out of limited release with $16 million in the u.s. total. while the holiday weekend broke records on the $basis the number of tickets sold in the u.s. for the year is down from a peak in 2002 when tickets were less expensive. we won't know how much of a decline in total number of tickets are sold until the average ticket price for 2015 is calculated early next year. >> from the big screen to a new screen. companies hoping that disney and others betting virtual reality will spring to life investing in vr start ups. from online gaming to sports. the business behind it is to ill

miscellaneous. virtual reality companies raised $400 million. let's get a glance into the new realm of vr with david cohen. you brought head gear for us. tell us what kind of stuff you're broadcasting. >> we've covered the nba season opener live nationwide. we covered the krn first democratic debate live to the world. viewers from over 121 countries. we tested with nascar, with baseball, football. we've done music. we have a coldplay concert. fashion week. a lot of content. what we try to do is go where the largest fan bases are. so people who couldn't ordinarily go to an nba game or soccer match. >> let's do two technical issues. first you have the head gear. >> that's right. >> this gear requires you to put

your phone -- this is the samsung phone. uses a samsung phone. are all of these -- when you look out into future how we'll use this gear it's all going to be using the front in front of something or are they going to have it built in. >> mobile is a big part of the market. there's an estimated 80 million android phones on the market that's vr ready right now. but coming to market soon in the next six months, there's products for pcs and for the sony playstation. the sony playstation vr will plug into the 30 million playstations that are are already in the market. >> do you see apple being a part of it. >> apple hasn't announced their vr project yet but there's smoke coming out of the smoke tax. they've done hiring and acquisitions and patent filing. >> what's the cost of production when it comes to vr? if you go to a coldplay concert or an nba game, you know, currently if nbc is broadcasting

it they have to have dozen cameras, there's a certain cost. >> that's right. >> i assume with yours there's probably even a higher cost? >> it turns out it's a lower cost. it's a lot like an electronic news gathering crew. cameras are set up and forget it. no camera operator or focus puller or anything you have in a sports production. the cameras are set up and basically there's a life guard there to make sure the action on the court doesn't run into the camera. transmission looks like your transmission of television. >> can you bring up coldplay. you brought up coldplay. i brought up coldplay again. in terms of how quick you think this gets adopted and the shared experience, there's something to be said now in terms of sports families watch around a tv. do you imagine a day where everybody is either sitting independently with one of these head gear things on their heads. >> no reason why this couldn't be a social experience for viewing sports. we have a process for you to

bring votes in and talk to them. it's voice right now. but that's stage one. eventually you can bring your friends in virtually from anywhere and see them inside the experience like they are sitting in the arena with you. >> one thing to have a coldplay concert or have a democratic debate or have the content available but how many people are actually using this. >> so there are about a million users globally right now but projections is there will be 10 million by tend of 2016. includes mobile, pc and sony playstation. >> the model is more immersive version. >> it looks like over the top content delivery models. subscription, pay for view, ala carte. >> have you had them on? >> i tried them. >> i was in "jurassic park" and

there's a dinosaur. you look around and there's something behind you on the ground. it's going to be huge. no down in my bind. i don't know if i would do political debates. that may not be my top choice. i like to look at maybe some of the republicans. really close up. bernie might be interesting. >> we also shot the republican debate. >> did you? >> it's available. >> one of the interesting things about the debate was that some of the coverage referred to, the reporters being there when they were watching it in vr. we found that interesting. the memory was they had the experience of being there in the room. >> second surprise being at the democratic debate twice. be second prize for me anyway. david, thank you. coming up we'll head to the

trading desk in chicago for what looks like it's going drive the day's session. stay tune. you're watching "squawk box" on cnbc, first in business worldwide.

oil prices are down sharply this morning. joining us from the cme to talk about this. jim we saw saudi arabia is projecting an $87 billion deficit. how did this change the game so much when we saw crude up 5.5%

last week. we thought we turned a corner. >> we're reminded every once in a while that the saudis don't care about cutting production because they didn't do what they've set out to do and that's to drive the competitors out. that's what's happening. we know we have a lot of oil. look at the stock market blaming it on oil and champion. that seems fair to me. reality is there's a lot of people short oil. the chart looks awful. nobody wants to be the first person to step in and buy it. that settles back above 40 to me it seems like we could get some short sweating a little bit. same thing is true for is stock market. since july we had series of highs that's lower than before. we have volatility in the stock market and that doesn't change until we settle above 28 as well. >> what about the fact we saw this surprise draw down in supply last week. short-lived? was that a one time thing? >> the prices you're telling me today is short-lived and i think

they want to see more of it. reality is particularly when you look at oil, when you go to the oil curve and realize that there's a ton of oil out there looking for a place to be stored i think it's very difficult to get any kind of substantial price -- short term price move to the upside. until that starts to take care of itself over time, you know, there's no reason to buy oil right now. i won't be the first guy to step in and buy oil. >> said light week for economic data, jim. before we go anything you watching? dallas fund pending home sales, kay schiller? >> the lack of participation in this week sometimes worries the heck out of me because we've seen some nasty volatile days because a lot of times there's not a two way participation to keep a market in order. i'm watching all those things. i really think, though, if we see some weakness in the next two days we probably -- the next two days after that will be weak as well and head down towards

those levels in the s&p. >> we'll see what happens. jim always good to see you. when we return we got a big weekend in sports to talk about. drama over a coin flip in new jersey. panthers are undefeated no more and the cardinals put the hurt on the packers. we'll be talking about all that --

it was a busy weekend in sports and we are really honestly just getting started. joining us now to break down the action, senior vice president of nbc sports ventures, and what we saw yesterday, rob, was all over the place interesting. i thought. you can see if you're good on the line in southern arizona, that was unbelievable to watch. although they didn't have first string guys in on the offensive line. >> i wouldn't bet against arizona right now in any game. i like them. you know, they would have been in this position last year if they hadn't lost carson palmer. he got hurt. here they are back with him healthy. if you look at the way they played in the nfc, of course

carolina just lost their first game yesterday, but if you look at who they've beaten and how they've beaten them, arizona has played better than anybody in the league. >> patriots have a lot of injuries. but they looked very beatable yesterday. the jets won that game from the opening kickoff. >> the patriots, the offensive line is a complete jigsaw puzzle. every time you look up, there's another guy guarding tom brady. the pressure the jets were able to get on him is key. the coin flip is an odd situation. >> if it worked out, it wouldn't have been. if they stopped the jets and kicked the field goal, it wouldn't have been odd. >> belichick thought he would be in better shape with his defense going on the field first. hopefully getting a three and out. he was upset when that pats interference call was made. i think he realized i got a problem. i did not get the three and out i hoped i would get. that set the jets up for the drive in the game.

but belichick did not have confidence in his offense. >> who's back in time for the -- is it edelman who gets back? any of those guys get back from the playoffs? >> from what i understand, amendola will be ready, don't know about edelman. if you have rod gronkowski, tom brady and a healthy offensive line, you have a chance to win. >> even gronkowski and brady, unbelievable. >> he was tremendous down the stretch in that game yesterday. i think the patriots, you can't count them out. in the afc, it's the kansas city chiefs who have not lost a game since mid-october. they are on fire. they still got a chance, depending on what happens with the broncos tonight to win that division. >> i'm not taking the bengals. how many points do i need to give you for you to take the bengals? in prime time? >> not a lot. >> seriously? >> you're not from cincinnati. >> it's not the playoffs yet.

>> it's prime time, the lights are on, someone might be watching. >> i think the bengals have a chance. the broncos have issue. >> what is 1968 to now? how long is that? that's how long -- we had season tickets when i was a kid. i jettisoned them last year. what do you want to talk about? >> can we mention coughlin. >> i want to mention peyton manning. m >> mention him. >> it was reported he was using drugs. he said he was furious and disgusted by the statement. >> al jazeera is such a liberal force for american football. >> americans love al jazeera. >> i'm just reading the report whether it was far or untrue. >> if you were reading it from a guy who was an intern and wasn't even there. >> he was an intern in 2013.

>> not in 2011 when they're talking about it. >> give peyton manning credit for the swiftness and strength of his denial. from a pr standpoint that was well executed. people heard that denial before they heard about the story in a lot of cases, which is sort of textbook on how you handle a situation like this. >> the reporter walked it back, too. >> the reporter walked it back? >> not walked it back -- >> one of the people who made the claims from the institute recanted everything he said on the tape. >> the whole story has sort of fallen apart quickly. we'll see. peyton manning has a sterling reputation. not much else to say except there's not much there. >> unless he has a lawsuit. do you think? >> there's been conversations about that. that's a decision for him and his camp to make. sometimes the lawsuit extends the story, right? if you want the story to go away, maybe just let it go away. >> tom coughlin has a lot of

goodwill from past years, obviously. that was bad yesterday, no? >> it was bad. yesterday was irrelevant. when you look at the season in total from the opening game of the week, the way they've lost games week in and week out. >> it's pretty good. >> every coach has to have an end point at some point. tom coughlin has been a legendary coach. he deserves essentially to be a lifetime coach, but nobody gets to be a lifetime coach. this may be his time. >> who is the best out of the four this week for college? >> best team? >> who will win? who do you think? >> it's tough to bet against alabama. i think michigan state will give them a game. i do. i think they're a nine-point underdog. i don't think that's warranted. i don't like anybody on a match-up basis against alabama. it's tough to go against them. >> notre dame/ohio state? >> good game. >> what do you think? >> i think ohio state.

they seem bigger and badder. but notre dame is big this year. >> that's a good game. of the non-semifinal games to watch, it's the most interesting. >> i like stanford, too. >> that's also big. love their coach. >> yes. awesome. >> a guy who could be in the nfl, could clearly be coaching any program anywhere right now, but he's a stanford guy. loves it there. >> maybe the best academic school in the country and they are totally top -- sixth i think. >> duke winning the bowl game for the first time since the '60s. i know it wasn't a big game. duke/indiana in a college football game. seemed like it should have been final four. >> all right, rob.

welcome back to red sox red sox, our guest host this morning, scott sperling and bob doull. you guys have anything good to say? you guys have been down today. >> i don't think we have. oil prices are done going down at the pace they were going down. consumer doing okay. spend more money next year. we'll be okay. it won't be record setting but we'll be okay.

>> again, i think we're in this mild growth scenario that we have been in for quite awhile. i don't see anything from a fundamental economic perspective that will disrupt that. however we live in a dangerous world as we know. >> you talked about selling during this period for private equity. any opportunity to buy? >> look, there are always opportunities to buy. you just have to be disciplined about it. the deals will be smaller. you won't see the multi tens of billion dollar deals that we saw in the '07 period. so it will be back to business as it was for most of our history, which is you're buying companies that are interesting, but you have to do something with them. make them better, you will make some money. >> you're fully invested? >> well, i have some portfolios that have to be. the ones that aren't -- >> you do, more than normal? >> more than normal. >> may i ask why you guys are here this week? why aren't you on a beach.

>> what's wrong with us? >> i have grown-up kids who have significant others and are traveling and we wait around for them to show up. that's the entirety of our life. >> bob got a chance to be on sidewa squawk box squawk on the street is next. we are live from the new york stock exchange. carl and jim have the day off. let's look at futures as we set up for a shortened trading week.