"carol." i said, we'll see "carol" too. he said, yeah, but relationships matter, dad. >> very mature. >> i ask why the bear didn't get nominated. >> thank you, julia boorstin. i don't really like the oscars very much. >> powerballs. make sure you join us tomorrow. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. it gets interesting. the dow, s&p and nasdaq join one another in correction territory. europe's actions no good after japan sells off overnight. we are watching the ten-year once again which got a few basis points away from a one handle.

oil is steady above 31, closed above brent yesterday. our road map begins with, we'll take a look at the aftermath of yesterday's selloff. where do we go from here? >> more bad news for gopro. shares sliding after lower guidance and plans to cut its workforce. >> shake shack out with a new menu item. is it enough to boost that suffering stock? we are going to talk to the ceo in the first on cnbc interview. >> keeping the eye on the situation in jakarta as well. several explosions overnight as terrorists launched attacks in the indonesian capital. they believe the perpetrators have links to isis. at least seven dead, including five of the attackers. we are going to continue to follow developments on that following an explosion at the pakistani consulate in kabul yesterday. a lot of geopolitical news around the world. >> we mentioned a lot of the major indices in correction territory. one bright spot is jpmorgan, reporting fourth quarter results above estimates.

jamie dimon on the call saying the bank generated strong loan growth and credit quality except for some stress in energy. the nasdaq down 9.6. the s&p down 7.5. the dow down 7.3. rare we get this kind of concentrated selloff. history tells us, bounce will come. >> it is unreletting. yesterday was the day they took out all the stocks that had been such great performers in 2015. a brutal and horrible day yesterday. for people that have no money in the market. they must have said, hey, listen, this is my chance. if you had money in the market, you said, hey, i have to get out. jpmorgan, they dramatically reduced the balance sheet by $220 billion. trading, they said, so far, in 2016, good. tons of loans. beat expectations and cost reduction. oil and gas, not a big ish crew. if this stock goes down today -- >> i think you are probably

right. by almost all accounts, it was a very strong quarter. the conference call with analysts is ongoing. kayla was on the media call that they typically have. very positive in answering every question. also asked the question of, well, metlife is trying to desieve if you will. what about you? there are no effects on us whatsoever. we run a completely different business. the balance sheet is down purposefully to take it down and also because of market conditions. it may move up a bit, skrjim. many people believe a very strong quarter for the biggest bank by assets that are out there even with that $200 billion reduction. yesterday, though, i can't tell you. i've talked to a number of very large investors over the last 24 hours, let's call it. most of the conversation goes like this. we are getting slaughtered. >> get me out of here.

ip getting slaughtered. the kind of things you do not see at the top. >> i watched yesterday. very good. only a handful of times that it went through that, 2008. bull bear obviously, huge. a lot of money on the stock lines but we need someone from the federal reserve and say, listen, maybe we made a mistake. >> you don't think that is going to happen? >> well, you need toee oil go higher and china not just pop up the market. they came in yesterday. they are very good-byeers. in terms of the chart where they came in. it is incredible. they were like, wow. mao, i never pegged him as a chartist. this new guy, he is trying to create a golden cross or something. i'm not kidding. the chinese are getting much better about trying to prop the market up, not that it wouldn't

be better for them to just let it happen. i have to tell you. when i look at the earnings, you look at general motors, the largest auto company and jpmorgan and what you should be saying is, geez, these are pretty good. inste instead, we look at chs and say, shame on you for buying the stock. >> gm and ford, approaching 5 or above 5. >> these are buys but when you say they are a buy and they go to 6% yield, do you have more conviction? i think that g.m. put out a forecast and people don't believe it, because it sells at five times earnings. when the stock sells at five times earnings, people think the earnings could be cut in half and it is really ten times earnings. i want people to be very careful. when you see netflix and amazon get taken to the woodshed. that's what happens. in all the great bottoms, they take the last ones and still crush them. >> to your point, down 2.5% on

the s&p. on a day when we got decent data out of china, when oil was not the story. today, it is above 31 perhaps. talking about yield, high yield started to become an issue. that said, you have to keep an eye on credit right now as well. >> i have have been researching. i want the fire drill for chess apiece and freeport. i warnt the fint the fire drill. >> what does happen? >> heaven forbid, they say, we have to restructure. the companies will tell you they don't. there are analysts saying, don't worry about it. we have reassurances of a different era, where if we weren't ready and something bad

happened, we weren't as good as if we were ready. i hope oil goes up, gas goes up, copper goes up. the interest rates stabilize. i hope all those things happen. chesapeake and freeport are the single greatest buys of our lifetime. what if they are not. >> on jpmorgan, jamie dimon is going to join us next wednesday from davos. >> a little time lag between now and then. >> on this program. >> this actual program? >> well, 10:30 is not this hour but close enough, yes. >> what, he waits until i leave? >> we are very happy to have jamie dimon joining us on this program. >> i'm staying late. i'm sticking around, changing my schedule.

in the meantime, it is getting worse for gopro, the action cameramaker, sliding in the premarket after a lowered fourth quarter sales guidance and announced plans to cut 7% of the workforce. sales for the holiday quarter down 31% from a yearing a. shares have plummeted almost 80% over the past six months. in a letter to his employees about the job cuts, gopro ceo nick woodman wrote this was a difficult and deeply emotional decision for the greater good of gopro. stock was once $98. it comes on the heels of reports of nick woodman buying that 180-foot yacht. >> yachts, people at it again. gopro, negative preannouncement anticipated according to jpmorgan. this was one of the most negative ones ever. a drastic guide low. david, you had what, a no buypro. >> in, byepro. >> remember, during the peak,

that was when they put the goat on the surf board. they had the pig on the surf board. >> when the goat went on, you got negative. >> i went to hawaii in october of 2014. the holy grail of surfing right there. i went and i said, i just saw a pig with a gopro. >> they said, wait until you see the goat. the stock was at 89. everything that could ever be on a surf board. >> a lesson is learned, whenever you see the goat, short the stock. >> that was the takeaway. >> where do you go from here? they have been trying to develop this media business. >> you have been positive on ambrela, right? >> yes, better than gopro. >> if this hadn't happen and that hadn't happen, the way we ran our business, we would have had 44%, 45% knock-out margins.

we actually didn't. instead, we had 34.5 to 35.35%. >> the groupons. >> because we screwed up on price protection and we made too many hero. people would like to hear that. that vertical one. >> so everything everybody said early on, which is just consumer products company that's going to have its day and pass on and it has a certain audience. once they are going to meet that demand, it is not going to be beyond that. they try to get people interested in developing this in the media business. licensing the content from gopro users and things like that. >> the ecosystem didn't take off and best buy didn't do any favors. they didn't do the bulls any favors by saying cell phone weakness. this is a back drop again today. i would love to have something

other than jpmorgan to hang my hat on. >> but jpmorgan is skrchjpmorga. gopro fits into it 100 times. >> we need to see oil, fed. one of the big four has to change. >> you have been talking about the august lows holding. nasdaq came within 14 points. >> i thought that was important. a lot of the crash lows are there. we are at the flash crash lows. so china holds at 3,000 and oil goes above 31, 32, better earnings. they are not going to reverse. no governor is going to say, wow, look at the destruction we have had in everything, not just stock market since we did that increase. we ought to wait. that's what you and i would do. we would all have to do that.

we would have to come on air and say, that's bad. maybe we bought gopro at 90 and we have to cut our losses. they are not going to ever do that. >> they have not done that yet. >> it would be good. >> jim mentions best buy. a holiday season to forget. chicken playing a bigger role in shake shack's strategy. we'll talk to randy garutti. it is the worst month since may of 2010. that was the month of the flash crash, the big one. we are back in just a moment.

st. louis president bullard about to speak on the economy. let's get details from steve liesman. >> james bullard, one of those fed officials that might be rethinking his stance. he says, recent oil price movements are very substantial. bullard, who is a voter this year, says the oil price decline has implications for monetary policy. he now says that stabilization of oil could take longer than expected. the idea that oil and the dollar would stabilize are central parts of the fed's forecast, leading them to rate hikes.

this is an important point for a fed official. bullard says that u.s. inflation expectation appear to befalling and not some brief market move. lower u.s. inflation expectations are worrisome and low oil prices are net positive for the u.s. economy. bullard, back in november, had expressed confidence that inflation would move back towards 2%. the upshot of this is pretty much the way i think policy is going to work out. january rate hike was probably not on the table. march, now becomes, less likely, depending upon what happens. i want to show you guys a chart that i made of what's happened to interest rates since the fed hiked december 17th. you can see that the fed hike and rates plunged. two-year down 9 basis points. the 5 year, 1.5. the 10-year down 17. fundamentally, the market is not buying what the fed is selling about rates going up, carl. >> steve liesman, thank you so much for that kre interesting.

jim, you were just basically saying about as dovish a comment as we have gotten from williams and everybody else. >> i was ready to hear more of the same, continue to hike, forget what you see. that was the exact opposite. is that the fed blinking or a notorious hawk blinking. >> maybe he just called a bottom in crude. i will take that too. >> he is a man who when i saw that he was going to speak, we are going to have a real flip-down when he speaks. that's what will happen. one person does not control the market. i have. i follow everybody. that's different. it is more dovish. to ignore it is to ignore this man's history, which is during a

very crucial period, august 24th, he was a little more hawkish. i am trying to stay away from that, because i am a real good boy tonight. all work and no play makes jim a very dull boy. >> it certainly flies in the face of what harold ham says he expects oil prices to do. >> i got hit with people saying i wasn't nice about harold bringing some of the more personal stuff in. i apologize. >> he is so wrong but that's okay. >> he is looking for a double. >> everyone has a right to be wrong. it is in the first amendment. you can be wrong with all. >> you can say it is going to 80 when it is at 40 and 90 when it is at 306789 if it just goes to 30 too, you are going to get a rally. >> he with will get cramer's mad dash and count down to the opening bell. a lot more "squawk on the street" from the nysc straight ahead. those new glasses?

they are. do i look smarter? yeah, a little. you're making money now, are you investing? well, i've been doing some research. let me introduce you to our broker. how much does he charge? i don't know. okay. uh, do you get your fees back if you're not happy? (dad laughs) wow, you're laughing. that's not the way the world works. well, the world's changing. are you asking enough questions about the way your wealth is managed? wealth management, at charles schwab.

the u.s. chamber of commerce ceo on the challenges facing investors, on squa"squawk alley cnbc. it's time for a mad dash. we have a little bit of time for the opening bell. a little less than 9 minutes. chipotle has been in the news yesterday. they had a very good day in the stock market. this is really important, david. it says that the management team here is one of the top ceos. they don't put themselves often

to say, this is exactly how much it is going to cost us. it is going to be big. we are going to get hit. we are going to come back. clsa says the all-clear is imminent. deutsche ya bank says, be careful, there is no all clear. you can tell who is winning. when the stock comes out, they will say, they are not all that bad. be aware the presentation was very well received. these people are viewed as being long-term thinkers. >> do the customers all come back. we are talking about double digit declines and same store sales. they have done so much improved safety. >> everything is so anecdotal

with this. >> if you get it off the front page, the stock will be higher. i don't want this to be a situation where people say, hold it, it is all clear. you never know. >> there will always be some sort of discount in the name. >> taco bell finally had an all-clear and they came back. i do point out that this meeting, the credibility of the company was very high yesterday is my point. they haven't lost credibility among the analyst community. i think that's important to let people know at home. >> speaking of food, i am seeing chicken sandwiches making their way around. >> i am doing a cleanse. last night, i had thin gruel and quinoa stuffed -- empanada

stuffed with quinoa. you don't want my diet. >> we have another six minutes before the opening bell. we will be back on "squawk on the street" right before it opens. of course, a very difficult open to this year. let's see what happens today. we're back after this. it's hard to find time to keep up on my shows. that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come!

can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. performance... ...reimagined. style... ...reinvented. sophistication... ...redefined. introducing the all-new lexus rx and rx hybrid. agile handling. available 12.3-inch navigation screen and panorama glass roof. never has luxury been this expressive. this is the pursuit of perfection.

here at the td ameritrade they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade.

you are watching cnbc "squawk on the street." there is danny myer of shake shack as they ring the opening bell at the big board trying to find some stability after that 364-point drop on the dow yesterday. jpmorgan is going to help. we have talked about their quarter quite a bit. we have talked to kayla tausche about what jamie has said on the call. dimon is saying, the american economy is going to get worse and looking at energy exposure on a name by name basis. >> this kind of dovetails with a lot of the negativity.

this was a fantastic quarter. what jamie dimon said, i'm going to talk about all the stuff that's bad. when you look at the sum of evidence, it is so positive. it just shows you he has so much going for him, that he can afford to talk about the possible stress of oil and gas. to me, the context is not bad. >> the context, of course, is -- what are they doing? >> some clapping here. on oil and gas, importantly, he said something you said. they have reduced their cost by almost 50% in a lot of these producers. >> we are talking about $11, $12 for a lot of the guys. they still make money. >> above the fold on page one of "usa today" all about the pain being inflicted on the economy because of oil. not about gas prices anymore.

>> no. again, everyone is in a bear market mode. jp market as we got to the open. it is important to remember that at a certain point, you'll have discounted some of these high-yield losses. they are not there yet. it is ridiculous to think that oil is going down. >> a year of relatively low oil prices. we have yet to see the real benefit, the real spend from consumers. they seem to have been saving more than they are spending. or other expenses. it hasn't made its way into the broader economy. they didn't go to best buy. amazon couldn't have been 100% of it. they finally got colder weather. it is really important to point out. there is a reason why the market is going down. that ir is credit risk. besides the fed, there are bonds. the bonds are going down every

day. there is nothing on this. >> a lot of hedge funds suffering pain and worrying about redemption. >> that's where it is really hard. >> they are down 20% this year alone. williams, yelp, pandora, and alcoa. >> there are companies that you can't even hit them up. you can't believe where they are. that often is a sign again when you say sign of a bottom, doesn't mean it is a bottom. when you can't look at stocks, that tends to be getting closer to a bottom. oh, my god, i can't look at that. no more statements open. all that kind of stuff. >> there is the opening bell. shake shack celebrating its first listing anniversary saying their new shake shack is going to go wide.

>> the esquire network celebrating the premier of a new season of friday night hikes next tuesday. >> you mentioned best buy. holiday comps down 1.2. appliances and home theaters okay. mobile phones weak after another weak year for p.c.s for 2015. >> intel reports, let's hear what they have to say. they are saying, listen, we are dog better than the average in the industry. it reminds me of game stop saying, we are doing better than you think. the market is not buying it. i think that yesterday was a real give in a lot of the companies that sell into best buy from the technology side. it is a give-up. the give-ups tend to be things like bio marin. the stock goes down, down, down. then, they issue a release saying the fda did not approve

the muscular dystrophy drug and the stock goes up. that's very important. at a bottom, pot toms have no bad news, good news. this is the worst news possible. the stock is up. worst news possible. let's keep it in mind that some stocks anticipate the bad. csx didn't. i thought csx in that might have. the stock was 25. i was down five yesterday. i am looking for that stock when it reports to bounce. that would tell me the bad news is in. we don't have bad news in yet in a lot of stocks. a lot of people think, we are getti getting slaughtered. another 5%-10%, i canned i kept help but buy. >> a friend came to me and said,

listen, if you haven't bought anything at all, would you b something? yeah, clear your head. give me something to buy. i managed to avoid this. i didn't buy it. it was a fang. she went on and on. i haven't bought a thing. i have some money. yeah, you know what, that's the first perspective. the year is not over yet. >> the year is far from over. that is an accurate statement. i may not make many of them but that's one. >> if oil goes up and bullard's comments get reverberated, you are going to say, what was i thinking on that horrible day when jpmorgan didn't go up. i can tell you, there was nothing bad about them. >> on that point, wells is higher. usv, of course, got a report later in the week. b of a. suntrust, have they set the bar

okay. >> morgan was down 10% on nothing. the much-coveted index was up 7%. people are looking at where the bonds are now and saying it is not going to happen. quarter loans up 16%. if that stock finishes at 55, then you are going to say, okay, we are not done. watch jpmorgan and oil. you don't have to look at anything else. you are calling in from the road. you can figure out this market entirely. >> what are you practicing your be bernstein. >> trying to get your attention. >> i am here trying to look at the broader market. >> i am seeing what is happening that i may be able to opine on. we could all go home at 9:34 and end the show.

look at the market. do i have a beer? >> it is a little early. the same as it is a little early to buy gopro. >> way too early to buy gopro. >> they have not put a bear market together but now it has. it's down 22% on the year, year to date. well below that. that's not good. >> we were talking about twitter last night. when is twitter going to bottom. >> typically, year-end. i finally heard a guy saying that. now, we are starting to talk about price starts. >> what i'm saying is that the discussion from people that are

very informed are really fed up, saying that stock doesn't bottom. it used to be within 5%, 10%, now, you are like, cut in half. these are signs that the givups are occurring. the give-up. >> you just saw a twitter four-way team that has been cut in half. jpmorgan just wrapping up its earnings call. kay kayla tau shi has some highlights. they weren't growing their business lines. they were cutting costs. the one thing that analysts were wo worried about, this he only set

off a certain on the oil and gas space. there was a sense they were estimating. jamie dimon was asking, will you get caught flat footed and have to overcompensate? >> we try to be very conservative. i put up more if i could. county rules dictate what you can do. these are baskets. the real risk is in reducing wells, cash flows are down. surprisingly, the cost to get the oil out of the ground has dropped dramatically. >> he said the oil companies have been surprisingly resilient. they are lending against assets. just because the loan, itself, goes bad. the credit cycle appears healthy. commercial real estate, middle market loans, better than ever. the credit cycle could get.

the recession would only go up by a couple points. he did know that the credit cycle could get weaker. they did say the rate benefit will. as you guys were noting, a strong quarter for jp market. >> as we said earlier, jamie dimon on this program next wednesday from davos. the dow has gone negative quickly. bob pisani on the floor. >> very sim story. we are positive almost every day. major shareholders announced they would not be selling stock any time soon. >> the big concern is that some might be selling early on despite what the authorities said. that caused a bit of a rally over in china.

over in europe, germany was up early but sort of sold off there. there was a reuters story out that the ecb would not be interested in more qe. i think that disappointed the market. that came out very early there for them. you see it moved to the down side. over here in the states, we turned down. just about the time that jpmorgan came out, around 6:45 in the morning, we rallied off of our bottom there. jpmorgan trading on the up side sector here in the united states. they were up just about four or five minutes. we have turned to the down side here. on best buy, everybody is focused on the computing and mobile phone sector. you can see it is down here. a new 52-week low. appliances were quite strong, up 13%. consumer electronics, health and

wearables, home theater, put up the full screen. online was up 12.6% overall. everybody is focused on the computing and mobile phone numbers which are down 7.2%. let's move on here. this concern that global business activity is deteriorating. we have been talking about that for a while. a number of companies that have reported earnings so far. there are 24 of them in the s&p. missed revenues. nike, costco. autozone and general mills all missed here. i think a lot of analysts are underestimating the impact of a strong dollar. revenues up 5.2%. if you do constant currency, it is up 9%. you are going to hear this a lot. this was a big story the last two quarters. a lot of people thought the way to avoid the dollar strength was buy small capps and state in the united states. that isn't working. the rust is the worst performing. the bottom line is, everybody is

miserable at this point. even the etf isn't working well. wisdom tree, fabulously successful. etf business with the hedge. >> thank you very much, bob pisani. >> let's get to the bond pits with rick santelli. good morning, rick. >> good morning, carl. a lot of talk about the fed getting to the whitehorse and ride together rescue. i don't think there are any whitehorses. a lot of looking and a lot of inquiries regarding the curve. rates are going down. tens minus twos, we have been copying july of 2012. this 117 is a threshold we are now comping back to the summer of 2008 as you see on the chart. two-year note yields have come

down. where did they end, 2014? let's show a chart starting on december 31st of 2014. they ended at 66 basis points. we saw a get ready period as we led in to what was advertised for that. the ten-year, we are moving lower again. right around the area we are trading today, we are still coming back to the 27th of october as you see on the chart. foreign exchange, the pound versus the dollar, bank of england, not doing anything, as expected. no matter how you slice it, their currency is reflecting and giving you great detail as to what they think the bank will be versus the u.s. that path may not be that. the dollar is at the best level since may of 2010. a lot of talk about the canadian

economy like the australian and a lot of commodity economies is not doing all that well. the dollar versus canada, haven't seen these levels since able 1st. two double knot three. >> when we come back, shake shack's randy garutti going big with the chicken strategy almost a year after going public. jpmorgan still in the green. a lot has gone in the red. we're back in a minute. in new york state, we believe tomorrow starts today.

all across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained. and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at business.ny.gov

take a look at shares of shake shack one year after going public. a new growth strategy, chicken. joining us i randy garutti. good to have you back. good morning. >> thanks, carl. good morning. >> what is it with this category? why are people going crazy over chicken? >> we are excited about it. if you look at it in 2004, you try to change what people's notion was the classic american

burger. we are doing the same with chicken. whoever wrote the rule that you can't have a fresh, no hormone, no antibiotic, cage free product. we hand batter and cook it to order crisp fried. for so many reasons, it is good for our business. most of all, our guests are loving it. >> mcdonald's, i think they sell more chicken than they do beef. >> certainly, internationally. a good portion of our business is international. >> is the market fatter here? >> generally, we believe the chicken, hard to say we launched it in july in look lynn at three shake shacks. since then, a top five seller. it has generally been with most line items. people are loving it and coming back. my wife, perfect example, who doesn't want to eat red meat now that often now says she is going to get at shake shack different.

that's happening. it has a lot of life. >> we were talking about gasoline comes down. the consumer has a little bit more money. the restaurant stocks have actually been terrible, other than mcdonald's, where there is a transformation. >> it has been a volatile year, jim, for everybody. what hasn't been volatile has been our results? you look at our q-2 and q-3 results. we have posted the strongest numbers that we have ever posted, over 30% operator profit at the shack level when our last quarter reported. stellar sales. the highest auchltvs. we have a lot of big news. we are opening in los angeles for the first time ever, scott dale, arizona. we are going to hit houston, dallas, minneapolis. a really big year for us. so many premier sites. people are continuing to enjoy coming to the shack. internationally, we did a deal

in korea for 25 shacks in the next ten years for a great partner in spc. so much good on the who are lie zon. we are going to be here for decades to many could. we are going to be the burger joint for my kids generation, who say, i don't eat fast food anyone. i still love a good burger. when i do it, it is going to be shake shack. >> you are that for my kids. they are there almost weekly. >> why are we not eating? >> what's the sauce there? >> we make a beautiful buttermilk herb mayo. the chicken is first slow cooked in buttermilk and then we hand batter, hand bread and fry. >> how long did it take to develop this sandwich?

>> about a two-year develop and a six-month test before we were able to roll it out. >> is there an employee learning curve? >> if you had secretly been looking in our shack over the last month or so, we haved thousands of employees across the united states training nonstop to figure out how to make this. it is a great addition. it is a trade up. if you have a shack burger that was $5.29. you may get this for $6.29. it changes the menu mix. that's been so much of our success, some of the ltos the way we have shifted mix and driven traffic. in our last quarter in q-3, we had 8% traffic. >> you might have arguably more if people didn't think about the line. do i want to wait this long? is it different in other cities? >> through put is, we want you to wait about five, six minutes after you order. we can't control how many people show up. we are thankful people continue to show up in droves. as yogi berra said, this place

is so popular, nobody comes here anymore. we are working hard to take care of every person that shows up and wants to wait in line at shake shack. most times of day, you can get in and out of shake shack pretty quickly. >> when chipotle was 50, danny myer came on and says, this company does all these great things. there is a perception that because of what happened, perhaps this natural organic is also more prone, true or not true? >> i don't know that is accurate. we feel for everybody who has been affected, steve and monte and the team at chipotle are some of the greatest operators. i have eaten a lot of burritos and i will continue to. they are going to come out just fine. it gives everybody a chance to say, what are we thinking about food safety? what has mattered in all that is that chipotle and us and companies like us have shifted the supply chain. we have now had ranchers in business making cattle with no

hormones or antibiotics. this piece of chicken is running cage-free. those are the biggest difference in our industry. we have 11 years ago never intended to be sitting with you guys today. >> you can tell me where everything comes from in that sandwich? >> absolutely. >> i can tell you where it is going to if i weren't on the cleanse. >> get rid of the cleanse. >> it doesn't end until february. i'm down to a 31 waist. i'm down from 33. >> you are going to disappear. >> the cleanse ends when i go to brooklyn. >> we'll be there for you. >> randy, it is good to see you. congratulations. flock this way is their new tag line on the chicken shack. come back again. >> randy garutti joining us with shake shack. the dow is down about 11 points. don't go away.

when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use. insurance coverage has expanded nationally

and you may now be covered. contact your health plan for the latest information.

it's time for cramer in stock trading. >> this is what happens with the momentum stock. under armour is down. i will tell you one of these things. lulu is below where it was when

it announced. i like under armour but not short-term. lulu short-term, i like it. under armour is pulling down lulu. you have guy to buy lulu. >> nike right above the 200 day. >> a lot of bad stuff lurking out there. fang is being crushed before you get a bottom. >> what's on "mad". >> the better mousetrap. it is a biotech stock. look at the biotech stocks. they are obliterated in front of your eyes. when that happens, again, no the over in a day. biotech was not destroyed in a day. it takes multiple days. we are in that period. it has only been the beginning of the year. >> always tough to time, though. >> you just scarfed that thing down. >> it was delicious.

>> will you swim an extra two miles tomorrow? >> not tomorrow, today. >> meanwhile. >> just go do your cleanse and try not to give the wife too much grief. >> she is killing me. >> jim, we will see you tonight. when we return, massachusetts governor, charlie baker, his state luring ge away from connecticut. dow is down 24 points. we are back after a break.

iall across the state belthe economy is growing,day. with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov and ca"super food?" is that recommend sya real thing?cedar? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.

good thursday morning. welcome back to "squawk on the street." i'm carl qintanilla. the dow is down nearly 32 points. >> jpmorgan trading higher after its fourth quarter results. beat the street. find out what you should be doing with banking stocks now. plus, g.e. moving its headquarters to boston. the governor of massachusetts will join us live first on cnbc interview toll us what it means

for the state. >> also, ahead, it has been a slow ski season here on the east coast. the places in the west are seeing big numbers. the ceo of vail will talk to us about the consumer. >> let's talk about these markets. in the red. reversing an earlier gain. oil prices still rising a bit. bank earnings looking strong from jpmorgan. what sector should investors be focusing on and what is with the market gloom. let's bring in art hogan and michelle girard. art, you put it well. you say we have transitioned from buy to sell the rallies. this kind offer thought process, how does it end? >> it ends when we get clarity on any one of three things. we believe china is going to make some type of policy mistakes. so we are trying to price that in. they haven't yet but they are new at this. we have to wait and see. we need stability in the energy market. we haven't seen that yet. if we were to get either one of

those things or both or some hint towards one of those things, the market can do a lot better. without any clarity there, the fed remains as aggressive as they have been or talked about. entering an earnings season, it is difficult to say, it is safe to get back in. that sell the rally mentality, which has been the road map for this entire year continues until we get more clarity. sometime at the end of the month heading into february. >> you have heard the laundry list of bearish factors. is any changing the estimation of growth for this country and the global economy this year? >> quite honestly, i continue to be confounded by the fact that as energy prices come down, we are getting more and more negative about the growth outlook. there is no question that there is a negative impact from lower energy prices on some sectors. more consumers, more companies, more countries benefit from

lower energy prices. i don't think the weakness in energy. i don't think anyone thinks it is predominantly a demand story from these new lower levels. moving down below 40. i'm not nearly as gloomy. i would go back to what art said. in terms of the fed, if you saw stabilization in energy, if you saw confidence in terms of china stabilizing and expectations which have been so reduced about what the fed can deliver i think would change pretty quickly in terms of markets believing that they will be able to move very gradually. this year, the hikes is very gradual though we think it sounds so aggressive. >> the big scary "d" word has come back. deflation. the bears are loudest during periods like this. steve rishuto points to claims and export prices and says the risks of deflation are rising.

it sounds like that doesn't job with your view of the economy. >> we are seeing down with pressure and headline with energy quite honestly. next week's ci report, because the drop is far less than last year, we are going to see the headline numbers move up. more importantly, in terms of underlying inflation, that's what we are focusing on, three-quarters of inflation here in the u.s. is service based. that continues to run at a 3% rate. i think that provides a very strong cushion against deflation concerns in underlying inflation tracks. >> it is probably a month since you came striding on to the program and told us very confidently that we have a great year on the markets and i think off tonight of my head, the figure you were giving us was for 9 per, 10% rise. you weren't accepting the bigger houses that were less optimistic on what might happen for the year. i wonder why you have changed your tune.

if you look at what happened yesterday, it wasn't the energy set to the left. it was consumer discretion, health care, other parts of the market that were moving lower. i wonder if you had that change of view. >> i think what's changed in 2016 and since the last type we spoke was probably the larger impression that the chinese economy is outside of their control and the steps they are taking that they are very knnewt are probably going to cause a lot of uncertainty in the economy, second largest in the world. they are new at currency manipulation and devaluation. we are concerned about the pace at which they try to attempt that. they are probably going to get it right. we are betting on the fact they are going to get it wrong. what's really new is uncertainty in geopolitics. >> if i look specifically at the

trade, the figures stamped on the wall from yesterday, it is health care and financials and tech and earnings from overseas. it seems to be more media, more domestic, much closer to home. the way the sentiment has shifted as we come to week two of this trading. >> i think it is fair. you need to look at sectors you just called out and think about the fact that they all are embedded with momentum. biotech was the biggest loser on the day and the year. that's the biggest part of health care that will hit the most. i think it is causing a lot of momentum to come out of that space. technology falls in the same category. when we are in a risk off environment, the names are going to get hit the hardest. when you think about the consumer discretionary, it is the momentum pieces that are going to do the worse. i would argue that at some point in time, biotech and consumer discretionary are going to do a whole lot better.

they can get more oversold before they bought them out of here. things change and when things change, you have to change your opinion. that's what's going on right now. that's manifesting itself in the momentum, high valuation name being sold in a risk off environment. >> that's why you say that should be defensive. michelle girard weighing in on growth. >> with the dow recovering, currently down 19. let's get to don chew. >> chrysler has responded to these allegations made by a dealer, a chrysler dealer here in the u.s. that chrysler has offered at least incentives to this particular dealers to misreport its sales number. the allegation is that chrysler incentivized it to misreport some of its retail sales numbers. chrysler has responded by saying that while the lawsuit has not yet been served on the company,

they do believe the claim is without merritt and they are confident in the integrity of their business practices and their dealer arrangements and intend to defend against this action vigorously. again, carl, to put it all in context, chrysler believes the suit is without mayor ris. that suit is being brought by a dealer saying that chrysler allegedly offered incentives to have them perhaps cook the books. we'll bring you more details when we know more. back over to you. >> thank you very much, dominic chu. >> big win for the commonwealth of massachusetts. general electric announcing moving their headquarters to boston. joining us this morning, the republican governor of massachusetts, charlie baker. governor, good to have you back. good morning. congratulations! >> thank you very much. good morning to you too. >> a lot of coverage about the number of sites they considered. apparently, 40 potential sites in a process that took several

years. was this a hard sell? >> i would certainly describe it as a lot of work between the commonwealth and the city of boston. i do think the fact that we work very closely together on this from the very beginning g.e. figured out there wasn't a lot of daylight between what we were interested in doing and what the city wanted to do. years and years of building up research and technology and innovation here in the commonwealth and the city of boston had a lot to do with their decision. this is a generational decision. they are going to be here for a long time. we are really pleased that the message sent about what the future here is going to be all about. >> speaking of that, g.e. talks about quality of life. the proximity to universityinie and high-tech talent. what do you think boston brings to the company? >> you are looking at the research and development dollars generally. we are the largest region spending and investingwise

anywhere in the country. we have 55 colleges and universities within a very short drive of where they are going to be located in the sea port district. we have enormous resources in biotechnology, academic medicine. digital health, robotics, mit, harvard, boston college, b.u., northeastern. a ton of really smart, talented people here and a very big and growing innovation cluster. we are also five minutes from the airport. getting to and from logan airport, which has added dozens and dozens and dozens of direct flights internationally, a real bonus for a global company like that as well. >> i can see that. how important were the tax incentives and some of the infrastructure breaks that you offered g.e.? what exactly are you offering?

>> how important they were is an issue for g.e. than for us. the kinds of incentives we offered are pretty consistent, mostly related to infrastructure and capital. the kinds of things we would typically do for any business that is coming hooer for the first time based on a payroll cal cue clags. city of boston participation is usually done loong the same terms. remember, folks, what we are really trying to do here is create a transaction and a transition. the decision g.e. made here, keep in mind, they were in connecticut for 40 years. this is going to be a long-term play for them and i believe for us as well. >> what would you say to critics, governor, that would say, look, that could be $100 million. that money could be spent building roads and bridges and other pieces of infrastructure that would help boston citizens and the budget. instead, it is going to corporate america. >> it is going to the eighth largest corporation in the

country, which is going to bring 800 people here, including 600 digital and technology executives along with it. plus, all of the intellectual capital and real private capital that a company like ge can bring to the table. i guarantee you, they are going to be companies that might not be thinking about coming to boston that may not know about how much the innovation sector has grown over the past decade. we are going to take a fresh look at eastern massachusetts and as boston as a potential location for them. all of us view this as a huge opportunity for a big return on investment over time. >> governor, if you look at the way that bernie saunders is polling for the dems as they sort out who is going to run in 2016, there is a lot of unhappiness about the way in which there is a relationship between politicians and corporate america. g.e. is a $300 billion organizations. it already has subsidies or would like subsidies from the import/export bank. it has an effective tax rate

that is pretty down low. a lot of people watching may find it distasteful that you and connecticut and new york are trying to fight to bring them towards you and having to issue the subsidies that you do issue. what would you say to the people that are angry about the way in which these things happen? >> first of all, this is an investment. the way most people think about investments if you are investing in a house or a car or your kids college education, it is an investment for which you expect a return. there is no doubt in my mind or the mayor in boston or a lot of other folks in this community, that in a fairly short period of time, the infrastructure support we will provide them as part of this transition is going to offer big dividends and big returns in terms of job creation, economic development and all kinds of new ideas here in massachusetts and boston.

that is the easiest part of this for me to figure out. >> the argument among those that don't like what they see, if the elected officials didn't decide to compete against each other, ge wouldn't get what they have got. >> they are not doing this because we offered them a transition package to deal with the cost of the transition, they are doing it because of the past 20 or 30 years, this region of the country and massachusetts has been growing. when they sit there and think about the verticals they are going to be in, the jobs they are going to create and the products they are going to develop and who they want to be over the course of the next 50 years, they want to be part of a community like this. frankly, we would like to have a company that would be such a major player in so many of those health care, aircraft, robotic, engineering and smart machining areas here as part of our

infrastructure and ecostructure too. this is about a very long play over a very long period of time. that's the way people really should think about it. >> it probably also puts another nail in what some say is a coffin for the suburbs. this trend toward urbanization p whether it is boeing or the way home builders are focusing. people are going to want to live in the cities for the next 20, 30 years. >> certainly, the millennials. i have three kids. certainly, the millennials have made it pretty clear their first stop is probably going to be in the city. mine was too when i was their age. i think there will be a lot of movement into the cities but i also believe part of what was interesting to g.e. is the compact nature of this region. you can get to the airport in five minutes. the so-called suburbs are a 15-minute train ride away. there is a tremendous amount of relatively short distances you

have to travel to get here, there, and everywhere. as i said before, if you think about the 55 colleges and universities that sort of are in this part of eastern massachusetts, you can get to any of them in less than an hour. >> governor, congratulations. appreciate you coming on to flush it out. it is obviously a big move we are watching closely. >> governor baker. >> up next, jpmorgan kicking earnings into high gear. the stock trading higher in the wake of those results. still about 10% down over the last month as people debate financials for 2016. "squawk on the street" will be right back with that after this. ♪

♪ those who define sophistication stand out. those who dare to redefine it stand apart. the all-new lexus rx and rx hybrid. never has luxury been this expressive. this is the pursuit of perfection.

the dow is now up 35 points. shares of jpmorgan are up. they were able to reign in costs while losing profits by 10%. joining us is gerard cassidy. usually, jpmorgan does set the tone. this should bode well for the sector, shouldn't it? >> the numbers look good and a real good tone for a secter that is hit very hard. >> skrchjpmorgan up 1%, down mo

than 12% for 2016. is it oil-related or credit related? what are you seeing as the big investor fear? >> i think the big investor fear is that the federal reserve will not come through and raise inrest rates as much as everybody would like due to the global slowdown. we saw last september that the fed blinked and did not raise rates when they should have. >> what are you hearing from the big banks, what is their expectation in terms of rates and how that will impact their business, when they will start to raise some of the prices on deposit loans? >> you are bringing up a good point. jpmorgan said they expect their revenue growth to be $2 billion from lending without any further interest rate increases. if we get further rate increases, that revenue growth will be even better. they are going to generate that

revenue growth from loan growth and better yields in their security portfolios and holding down the cost on deposits. they are not raising those deposit rates just yet. >> jpmorgan setting aside 60 million in oil and gas reserves. there was a question on whether that was enough. whether they were understi underestimating the amount of damage that would be done in terms of defaults and stress. do you agree? >> i think when they talked about their oil portfolio, they mentioned the reserves are going to go up throughout the year. we should expect that. how much are they going to go up? in their worst case scenario, if oil stays at $30 a barrel, they are going to see $17 million of losses. they will be building those reserves throughout the year.

>> so you are neutral on jpmorgan. does this change your mind? what would you do with some of these battered bank stocks? >> we would say our official rating is still out before them. we would be a buyer of jpmorgan and citigroup and bank america. we think it has been overdone. people are worried the u.s. economy is going to go into some type of deep slowdown. we are not in that camp. jpmorgan, the credit metrics outside of oil were very good. still very good loan growth. they grew 16%. >> not yet. briefly, if you would, if people listen to what you are saying, what sort of bounce could you get on these stocks? how much higher than where we are now are your targets? are they exciting? >> if you look at last year in january, they sold off. we could see 20%-30% gains for

many of the bank stocks. >> there are a lot of bullish calls for banks. girard cassidy from rpc off the jpmorgan call. >> this winter may have been light on snow here in the northeast. places like tahoe and park city have seen big numbers. in vail, reports are benefiting from that. how much, the ceo is going to join us live from denv after the break.

consumer discretionary taking a pummel in yesterday's selloff. vail, stock up 33% despite vail reporting an 11% rise in skiers and a 19% rise in ski lift revenue. so far this season at its mountain reports in this country. from denver, we are delighted to welcome back rob katz, the ceo of vail. >> good to be here. we have terrific conditions across all of our resorts. we are seeing the strength of the u.s. consumer, we are seeing

past sales before the season has gun. that has really helped in our result. >> for people looking at this for an underlying stage of the business or the strength of the u.s. consumer, there is a warning warm. he had a bad season last year. quite easy to look very good. presumably, you are pulling away skiers from the east coast where there isn't so much snow to the west to your slopes. the figures are in a sense good but arguably distorted. >> i think we acknowledge that. our resorts in tahoe are having a very strong rebound because of last year. we wanted to make it clear that our resorts inle could col are also seeing strong growth and double digit growth in park city. those have pretty strong years. >> we are seeing really good momentum and it is actually overcoming the cha links we are seeing in the internationale market. we feel very good about the u.s. consumer and their connection to our resorts right now. >> i'm glad you brought that up.

from hotels to luxury ghoul goodes, every ceo is worried about this effective but strong dollar and inbound tourists not being here and not spending. as we mentioned on the show before, you took a personal interest in going to brazil and other parts of the world to drum up precisely this sort of incoming traffic. ultimately, what are you seeing now? >> with the strength of the u.s. dollar, obviously, it is at record levels specially against the canadian dollar, the australian dollar. brazil is having its economic challenges. our international visitation is down significantly. as i mentioned before, we really see this is a long-term opportunity. currency markets and economies will come and go. they will go up and down. for us, the key is, how do we drive long-term dproet? we are creating the exact same connection in the u.s. it is relatively low for other people in travel. i would like to know what

you thought about the stock market and your own market. it leaves some analysts saying despite being very complimentary about you and the management and the discipline, until we get down, they would say until $110 a stock -- dollars a share, it is quite difficult to get constructive. what is your view on this stock, your own stock, and the market? i try not to get too caught up in the ups and downs. providing an outstanding experience. driving, repeat and loyal. where it goes from here is anybody's guest? we are certainly very bullish. >> we will leave it there. thank you for your time.

>> rob cats, the ceo of vail. >> let's get to jackie at the nymex. >> coming out with the nat gas number any moment now. the expectation, looking for a drawdown. about 175 billion cubic feet. it has not been as cold as people were expecting. so we are down 168, which is less than expectations. we were trading at 22, a little before this report. down 2.5%. now, we are trading at 218. prices are coming off here. when it comes to the weather and nat gas, we were saying, it has to get cold in january. it certainly did. it is not quite as cold as we were expecting. total inventories as well, now, under 4 trillion cubic feet. we are still 17% higher than we were at this time last year. prices are 30% lower than they were this time last year. in the last month, a 15% boost.

we are poised to move lower. >> breaking news on nat gas. straight ahead, it has been a volatile week for the energy sector so far. how do you play these stocks? >> check out markets. quite a reversal. the dow is session highs, up 130. s&p 500 up 3/4 of 1%. the nasdaq rebounding after dipping into the red earlier today. some reports of forced selling, gotten through that. now, we are at session highs. we'll be right back at "squawk on the street."

in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained. and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at business.ny.gov

good morning, everyone. i'm sue herera. here is your cnbc news update this hour. the islamic state says it is responsible for militants carrying out a deadly gun and bomb assault in jakarta targeting foreign nationals. seven people were killed, including five gunmen. 20 more were injured. witnesses reported hearing as many as six bombs going off. turkish media reporting that the aleast five people were killed and 39 others injured after kurdish rebels detonated a car bomb at a police station and attacked it with rocket launchers and firearms. another police station was also attacked. there were three winning tickets in the $1.5 billion powerball jackpot in florida, tennessee, and california. there, you see the 711 in chino hills, california, where one of

the tickets was sold. the owner of that store gets $1 million for selling the ticket. >> america olympic champion, picabo street has been charged with domestic violence after they say she pushed her father down the stairs and locked him in the basement. >> if i open a bodega and i sell a winning ticket, do i get $1 million? >> it is commensurate with the amount of the powerball or the lottery. they do get a fee. i believe it is 5%. >> in the meantime, crude is bouncing off its lows. wti up nearly 3%. we are at 12-year lows. we are trading at $31.46. sam is an energy analyst at

cohen and company. are you calling opportunity here? >> actually, one segment of the energy space that is worth looking at is the refiners. they touch on a debate going on in the broader markets. the strength to the consumer. the eia has reported some pretty ugly gasoline numbers the last two weeks. a lot of that is seasonal. most of the fundamentals are really strong. summer driving season is good like it was last year. based on the low price and the number of payroll. i think there is pullback on the eia numbers, a pretty good opportunity. >> you want to mention some names? >> valero, western refinery and taser och. california has a fairly

significant minimum wage increase happening this year. we think the long-term trend of drivers on the road increasing there is looking like it will expand, at least for another year. >> a lot of people will be itching to invest in energy, arguably, long-term, clearly huge opportunity. you could debate where that opportunity lies. if they think the price of oil is going to go further lower frl here, they might hold off on buying some of those oil majors for now on the basis they could be lower in value. is that a sensible idea? does that not apply to the refiners? >> they should benefit from oil going lower. that's not what they want their benefit to rely on. it is not all that predictable or sustainable. in the near-term, it gets more people driving and increases demand when the price is low. oil is $30. these companies are doing a good job of pulling out costs and trying to right size themselves. chevron, one of our top picks in that state. they have a 45% decrease in cap

ex. over the next two years. more than anything they can do internally, what that segment needs is higher oil prices. if it is getting harder to predict when that is going to happen based on opec's inaction, defense on the rediners is here. >> it does seem like there are two schools of thought. it does feel like a consensus an an intrafreer reversal on the price of oil. it will rebound. whether that's caused by a strange in strategy from opec or toing u.s. production, that's up for debate. >> our view is that they are connected. opec is going to respond. the whole angle is market share. the issue is that interest rates have been solo. so much capital and the cost of shale is a lot lower than anybody thought it was. u.s. production is more durable than we thought or opec thought

or anybody thought. this process has been dragged out. by the middle of the year, you will start to so some more tangible declines. at the juneau peopec meeting, there will be more cuts. >> what you mean is the saudis will cave at some point? >> that's a good point. opec, itself, is dividing. coordinated interaction is decreasing as well. iran and iraq are going to decrease. saudi is going to lead the chart. >> you said the case will grow in the middle of the year. do you think it will happen? >> yeah, i do. it has already started. u.s. production is declining. it grew in the last half of last year. year to year, end to end, we are sort of flat. it doesn't look like a big

decrease. up from the spike in the middle of the year, we are down about 500,000 barrels a day. probably the same magnitude mood over the next six months. >> sam margolin, energy analyst with cowen. the chamber of commerce out with their latest reports. tom donahue joins "squawk alley" with all the details. a look at this market and these crazy intraday reversals trading very strongly into session highs. the dow up more than a percent. up 200 points. the nasdaq roaring back. s&p 500 up 1.19%. a short rebound from september lows. we will continue to follow it here from "squawk on the street."

i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.

davos is specially important this year, because there is so much turmoil in the world. goldman sachs out with a bold call saying it is time to bet on energy stocks. they suggest a very interesting way to do it. get their trade at trading nation.cnbc.com. more "squawk on the street"

coming up.

welcome back to "squawk on the street." markets near their best level so far today. the dow up by 100 points. the s&p 500 energy sector, surging, up by nearly 3%. the best-performing sector today as oil bounces from the 12-year lows. lifting higher, shares of williams company, this year's worst stock. currently, 11% higher. shares of kinder morgan, speck tra energy, those are some of the most beaten-up names in the market in the energy sector overall. we will see if those gains hold. >> a sharp and sudden rally, the

dow is up 215 points. rick santelli with the santelli exchange. >> would i like to welcome our guest, rebecca. welcome. >> thank you, rick. thanks for having me. >> your reresponsibsponse to the surveys. six topics covered. let's take topic number one houchlt is the mood regarding recession? >> it is pretty consistent with what we surveyed in june. so 70% of investors that we surveyed are expecting a recession within the next three years. no one thinks we are going into a recession in 2016. >> they are month he recession aware but not necessarily in the here and now. has that caused any different behavior regarding how they assess companies? >> absolutely. 88% of investors tell us they are placing more emphasis on balance sheet strength.

>> what exactly are they going to be looking for? >> leverage levels and liquidity. >> leverage levels, that makes sense. >> we are telling our clients to really focus on talking, communicating about their balance sheets and what they have been doing over the past several decade to get them into position to weather the next down turn. a common refrain. there is an earnings recession. the recession is here in terms of earnings. if you look at the past five is your ises, four have been decidedly more pair bearish than the previous one. a slightly false positive in june. in asia, as high as 85%. they are looking for further gdp erosion in china. 62%.

let's do a 2 for 1. how do they think it which affect the economy in general? >> taking into consideration all of the fed rates starting in december, they are really settling in on two hikes in the 50 to 75% basis points. >> kind of in tune with the market but not necessarily with what we may get. >> they effect it will affect the economy in a good, bad way? >> net neutral. >> bullish, bearish? >> the bullish remains tech. >> still tech? >> last time i was on, i was getting concerned about tech because of the valuations. i'm still concerned about tech. are they growing? >> absolutely. are they growing at the rates this he were a year ago? >> no. we have seen revenue deceleration. i don't think the tech investors have come around to that reality. >> if i recall looking at the charts the viewers were looking at right now, 62% are bullish on

tech. >> there are a lot more concerns from tech-focused investors. >> when you get bullish, basically in this period, it is because as you pointed out earlier, cost cutting becomes an issue. jpmorgan chase today. >> absolutely. who can cost cut the best, a small company, mid-size company or the really big companies. >> if i were to put a handle on earnings, they are beating on eps, because they are cost cutting. what does that tell you? >> we are going into a slow-growth environment. it is the larger companies that have the mechanisms that really can focus on that. >> real quickly. we are out of town. give me the bear sectors real fast. >> materials, industrials and energy. energy, rest bearish this quarter than last. >> excellent. rebecca, thank you for that run around the block. i'm out of breath. up next, ceos buying back their own company's stock remain the standout net buyers of equities.

still, the market fellas the year. what difference will the buybacks make in 2016? one more look at the markets. a strong rally today, up 2011 on the dow. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation

have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

good morning, everyone. i'm sue herrera with breaking news on web md. that stock is sharply lower right now after the company came out and said that it is not in negotiations to be acquired or to sell all or part of its business. there was a "financial times" report last night that web md was in negotiations to sell all or part of its businesses to perhaps united health or walgreens. the company coming out moments ago saying that it is not in negotiations with any entities to be acquired or to sell all or parts of its businesses. the stock right now is down about 3%. sarah, back to you, guys. >> sue, thank you very much for the update. meantime, on the broader market, stock buy-backs usually play a big role in bull markets, but what if that type of activity has peaked? is it something to worry about? senior markets commentator mike

santoli joins with us a look at the buybacks, which were very strong last year. >> very strong for several years running. about half a trillion dollars a year companies have bought back on average over the past, let's say, three years. they still have authorizations for similar amounts to buy back this year. a couple of things to keep in mind. they might have been missing the start of this year because goldman x pointed out last month that only about 3% of buybacks occur in january. the month of january is the slowest for buy back volume. that's why a lot of people think once these earnings get reported, these companies are going to be free to do the buying again. on the other hand, we may have kind of reached the limits of how good this can be for the market. the debt markets, of course, are less generous. a lot of companies have been buying -- borrowing to repurchase their own stock. i think what's also key is that the stocks of companies that have been the most aggressive repurchasers of her shares have stopped outperforming. six years ago if you look at a couple of etf's, the ticker of one, these are the companies selected for their buyback

prowess. they basically underperformed by five percentage points, the s&p 500 in the last six months or so. that tells you maybe this is not magic. it could be support for the market. also, by the way, 130 companies have bought back more stock in the prior 12 months than they earned in net income.

>> the idea that the mshgt has been lousy has become pretty common knowledge. i do think even people who have been correctly bearish into this move started to say overnight, look, it starts to the down side. get out of the way for a bounce. also, we had this pattern the last few days that we had a little bit of a tent tiff rally to start and then it got knocked down mid-morning, and it's almost as if it was too easy and that wasn't going to be repeated because everybody was expecting. >> you can -- i forget when you first came on the show, look, actually in the afternoon we get these roerz. >> last week, exactly. >> yesterday we broke with that. for four days we declined through the market and come back. yesterday, 2.5% off. >> yesterday was definitely -- had the makings of the very beginnings of some kind of a panic sell, can you get me out type action. i don't think that people necessarily think that fear levels are that high. the vix only got to 25. tactically speaking, i think if you have been bearish, if you have been short the market, discipline would say let me get out of the way of a bounce. >> what have you been watching to see the bounce, that is, from

the conditions. we did see crude up 3.5%. you are seeing -- it is a broad rally all major s&p sectors are higher. >> i think you want to also look at the reaction to earnings. you want to see as the banks start to report, the bank has been beaten down more than most sectors, and you see them seizing on. real buying. >> somewhere p morgan 2.5% looks like. mike santoli, always good to talk to you. >> let's see what's coming up on alley this morning with john fort. good morning. >> good morning, simon. we're continuing to watch these markets. wild ride this morning. right now major indexes up better than 1%. go pro not up at all. that stock taking a tumble after warning last night about not only inventories, but sales week and going to be weak throughout the we're. then finally, we're looking ahead to intel earnings. i talked to the ceo just last week about some key things in data center to watch out for because the pc market is not doing well. all that and more coming up on squawk alley.

iall across the state belthe economy is growing,day. with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating

next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov >> good morning. it is 8:00 a.m. at gopro headquarters in san mateo, california. it's 11:00 a.m. on wall street, and "squawk alley" is live.

welcome to "squawk alley". on a day of interesting market action. they definitely sold the open, but they -- joining us this morning from palo alto, roger. good morning to you. let's talk about this reversal here. a lot of volatility. at least on the dow. we started in the green, fell 76 points in the intraday low, and now the dow almost 200 points. taking a big chunk back from the losses of yesterday. bob pasani is on the floor to tell us what's going on. >> we are also used to coming on at 11:00 saying another failed