almost half last year, boosting hollywood revenue, this year chinese growth basically flat lined. and another sign of cracks in the system, only 3 of 14 summer sequels outperform their predecessors. with so many entertainment alternatives and the cost of going to theaters on the rise, the bar for quality content is higher than ever. john, over the you. >> thank you, julia. and good morning. it is 8:00 a.m. at apple headquarters in cupertino, california, 11:00 a.m. here on wall street. "squawk alley" is live. ♪

good morning and welcome to "squawk alley." carl and kayla l.a. are off today but we have a secret weapon, an anchor you know and love who es unafraid to step in, kelly evans joining me at post 9. >> thanks for having me. >> donald trump lighting up twitter in the last 24 hours sparking debate from everything from china and a possible nuclear arms race with russia to the military's overruns. eamon javers is in our nation's capital with all the details. >> good morning, john. an astonishing 24 hours, starting with that tweet donald trump put out about expanding u.s. nuclear capability. that provoked a flurry of reactions including this morning on "morning joe" on msnbc in which mika brzezinski, the host there, said she had a chance to speak to donald trump off camera on the phone and he told her what he meant in his tweet. here's the way she framed it this morning. it's getting a lot of attention. >> mika asked the president-elect while we had the

opportunity, what his position was on -- trying to clarify the tweet yesterday regarding the nuclear arsenal and the president-elect told you what? >> let it be an arms race. we will outmatch them at every pass. >> and outlast them all. >> and outlast them all. >> so that comment from the president-elect, let it be an arms race, getting a lot of attention around social media, around the rest of the media as well. sean speiser, who will be the press secretary in the trump white house we learned yesterday, was on the "today" show with matt lauer. he talked about what exactly was meant by that comment. here's what he said. >> but if there's going to be an arms race -- >> there's not going to be. here's -- >> he said we will match them at every turn. >> there's not going to be because he's going to ensure that other countries get the message he won't sit back and allow that. what will happen is they will come to their senses and we will all be just fine. >> now, also talking about this today is vladimir putin in

russia at a news conference discussing the russian nuclear capabilities saying they've modernized their forces and also saying that if anybody is starting an arms race here it's not the russians. here's how putin himself put it earlier today. >> translator: definitely we have advanced in proving our nuclear -- and we are now capable to a missile defense system and our systems are much more efficient than wmd itself. that may cause the united states to step up their nuclear capabilities, and they've been doing so. >> so, guys, we'll spend the rest of the day probably and the next several weeks figuring out just what exactly donald trump is doing here. is this a shift in u.s. policy on nuclear armaments, is this a brushback pitch to vladimir putin, or is this something else entirely. all of that being worked through

by his aides and by foreign policy experts today, guys. >> all right. thank you, eamon javers. now let's send it over to our bob pisani on the floor with a special holiday trader tradition. bob? >> thanks very much, jon. for 140 years, it's ban tradition of singing and partying on the floor of the new york stock exchange on christmas eve. that tradition got a lot more sedate after the great depression, but one thing never changed. barbershop quartet singing and community singing. here's art cashin leading the annual rendition of "wait to the sun shines nellie." ♪ wait till the sun shines nellie and the clouds go drifting by ♪ ♪ we will be happy, nellie by and by down will the train wander sweethearts you and i ♪ ♪ wait till the sun shines

nellie by and by ♪ >> whooo! >> merry christmas, everyone. merry christmas, david. merry christmas. >> merry christmas. >> merry christmas. >> merry chas. >> art cashin, old friend, merry christmas. it talks about sun coming out, clouds parting. you think a hot of the traders feel the u.s. economy, the clouds are going to part perhaps in 2017? what's the mood? >> i think that's what the market's been looking for and that's why we've had this postelection rally that's taken it so far. tax reform and regulatory reform, the sun to s going to be shining. >> we stalled a little bit here. we'll go over it in the next week or so. this is a seasonally strong part of the year. i think hopefully before na inaugurati inauguration. day. >> we'll be back for the second rendition on christmas eve as well. the guys will go across the street from here. imagine what will happen at that point. i'll be here for the rest of the

day of course with you guys. back to you. >> we all will, bob. no early close today but we still got "wait till the sun shines nellie" the unofficial anthem of the new york stock exchange. thanks to cash aart cashin and everybody. back to donald trump's public comments on the u.s. nuclear capabilities and future trade deals with china. we're joined by mike holland, holland company chair, along with steve ott, chief investment officer. steve, what do you make of these markets? broadly speaking, we had so much excitement going up to 20 k, excitement about the tu nu trump administration and now all these geopolitical concerns and the fact we've stalled out. >> we've been talking about a wall of hope. mostly markets climb a wall of worry. now we're climbing a wall of hope. we think that will be the theme next year. we've had a sharp bump off the lows really with the trump rally. and it kind of makes a certain amount of sense. i think you got ten years of the

economy in slow growth mode, repressive interest rates, high regulations, strangling the economy, and now we look to the promise of something much better and the markets are trying to discount that. the issue is no one real hi knows how much earnings go up on all this. >> they seem to have discounted a lot already. >> we think earnings for '18 can be somewhere around 140, a little higher than that. >> 2018 for the s&p 500. >> yeah. in a wall of hope environment the markets are willing to look to '18. before that it was like everything's going to fall apart tomorrow. i can't look to '18. and on '18, you know, we're trading about 15, 16 times where we could be. i don't think that's excessive. it's an appropriate discount given the uncertainties of how this plays out. >> okay. >> we think it's a kind of buy the dips environment. not sell the rallies. >> mike, would you agree with that characterization, broadly? >> probably broadly, kelly, but

i think cnbc yesterday put a piece of information out there that probably hasn't been well enough noticed and that's when scott wapner spoke with carl ica icahn, who talked about the possibility or probability of a trade war with china sooner rather than later. as steve just pointed out we've come a long way not just since trump won the election but since 2009. and as stocks are up so much, we could have a very big surprise and it wouldn't be a pleasant one. >> we have the sound bite you're referencing. let's play it now. carl icahn on "the halftime report." >> i'm not going to talk about the fact she should resign. that's up to donald. that's not up to me to discuss what you do about janet yellen, but i do believe it was ill thought out in my mind to keep these interest rates so low. sooner or later you pay the price for the low interest rates and really that's one of your thoughts here, that these interest rates are moving up very quickly.

and then as they move up, can you control inflation. i mean, you have so many variables so, many things to worry about. >> that wasn't the part he talked about it. >> what he said specifically was that a trade war is, you know, a probability, okay, and he said you might as well get rid of it sooner rather than later because the markets will take a deep dive. now, he's got donald trump's ear. i presume there's some validity to listening to what he just said. and i'm not about to say that the bull market's over, which we've been enjoying since 2008-2009, on the one hand. on the other hand, i think that a very big surprise and a trade war with china would not be something the market would take very well. in fact, icahn himself said the market would take a big hit. >> and steve, i don't recall hearing this type of confrontational language out of a president-elect in quite some time, whether they're talking about china, whether you're talking about nuclear

capability, whether you're talking about boeing, lockheed. the market's done quite well over the past seven, eight years. you're talking about a wall of hope in the face of all this confrontation. what gives? >> look, read the guy's book. he's a negotiator. so, you know, i would say -- i look at this as you're going into a negotiation with china, his view of the world would be you don't go in saying i'm prepared to give up on all points and play mr. nice guy. so i just don't buy the idea that we're heading into a giant trade war with china. i think he does sense that we don't have an even playing field with china. and that's probably right. so i think he'll try to level the playing field and negotiate, same thing on nuclear. we'll see. that's why the market's not at 2,500 today where it probably should be if you had a firmer certainty about the outlook.

i think it's the wall of hope we're now grinding up. >> mike -- >> by the way, the clip on janet yellen is a good one because, you know, you played it at the wrong time but tralts going up off of repressive levels actually helps the economy. the banks suddenly start to make money. joe six-pack, who's retired, can suddenly get some interest income on his lifetime of savings and take the wife out to dinner. >> goldman up 50% in a quarter. amazing stuff. steve, mike, thanks for joining us. >> thank you. >> when we come back, how everyone from amazon to walmart is getting ready for the last-minute holiday shopping rush. former office depot ceo steve aglund will weigh in. and the governor of arizona. uber prepares to move its self-driving operations to that state. and a black eye for apple. a company slamming its new macbook pro. ♪

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ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. retailers are looking to capitalize on the last-minute holiday shopping rush. courtney reagan is live at queen center mall in elmhurst, new york. courtney. >> hi, jon. up until this point, millions of americans have been shopping online, pushing sales up 11% according to adobe. if that's your claim going forward, you're out of luck.

you'll need to hit the store because we're two days from christmas. today is the day for traditional store retail. shop attract predicts today will be the third busiest shopping day of the year, the 26th will be the second busiest day behind black friday. our cnbc all america economic survey, again this year says it's the men the last-minute shoppers, we found a couple of them. >> i'm looking for a charm for the wife. last-minute thing i have to pick up. >> no, i'm actually quite done. i had to check one more thing for my little brother and that's it. >> all of it today or -- >> no, just the last-minute gifts, the little things that were left on the list that i didn't have time to get to before thanksgiving. >> now, a slice intelligence scan of 1.7 million online e-mailed receipt said amazon is dominating e-commerce sales so far this season through december 16th with a 37% market share. best buy is a distant number two with 3.9% market share and that's followed by target,

walmart, and macy's. now, while point of sale data just through december 10th showed sales were down 4% compared to last year. most consulting groups are confident that holiday sales will ultimately hit those forecasts for 3% to 4% growth. but an online sale remember does cost to retailer more than an in-store sale. as e-commerce grows and in-store sales slow, you're going to see some compression there in margin. plus add in what alex partners consultant joel bynes says is deeper than planned discounting and that's going to take another leg down for profitability. so we'll have to see exactly what happens, but today is going to be a very big and important day for retail to finish out the season strong. back to you. >> thank you, courtney. and the president-elect's tough trade talk having quite the impact on retailer stock performance. for more on what retailers can expect in a trump administration we're joined now by the president and ceo of the committee for economic development and former office depot ceo steve oglund.

good morning. >> good morning. >> co-author of "sustaining capitalism" and a cnbc contributor. trying to parse this talk about a 10% tariff on goods manufactured overseas, this is hitting retailers, but can you break down for us a little bit, i mean, it's based on the value of goods not necessarily the selling price of goods. what's the impact of something like this on, say, an i phone coming into the u.s. after being manufactured in china? what's the impact on the likes of an office depot? >> well, you know, look, all of retail in america is dependent on a global supply chain and much of that is manufactured in asia. so the talk of a tariff on any goods coming into the country of course would hit our retail sales, but it would hit the americans' consumers because a tariff is essentially a tax and it would be incremental pricing, higher prices on the american consumer, which would be bad for

the economy because as we know gdp is dependent on the american consumer for 70%. but i actually don't think that there are going to be tariffs. i think this is part of the negotiations that they're throwing out, you know, these ideas, but i think ultimately it's not in the best interest of the united states or china or any other country to get into a trade war. what we're trying to co-is reset and get to fair trade. depending on what happens here with tariffs and trade and so forth, that could have a negative but it could be neutral. there are a lot of other policies that can be very positive. you know, you look at corporate taxes and american retailers as a sector pay the highest tax rate of any corporations in america, the highest effective tax rates so if the taxes are reset for corporations at a high 20%, it could be a 50% gain in earnings. so there's a big upside there. there's a big upside also in personal income taxes if it's cut, it will put more money in people's pockets. regulation is a big cost on american retailers today. that could be a big gain.

so there are a lot of other things. infrastructure is another one where lots of cost in delays and bottlenecks and so forth in getting goods through the country. so all the other policies that are being worked on by the trump administration would be net gains for retailers. >> i mean, yeah, i'm just trying to think through that a little bit, steve, especially because if the fist thing that hits meetly is this tax, you know, obviously that's an issue, but they're also dealing with just this massive shift in the way people are shopping. so those are two pretty difficult forces to contend with. >> oh, you're right, kelly. the whole shift is going. we're talking a minute ago about potential 4% gain in the holiday sales but it's all coming through the e-commerce side and a lot of it's mobile. and, you know, what's happening is bricks and mortar retailers are getting killed. the traffic year to date through december 17th is down 10% in bricks and mortar retailers, so it's going to be a massive consolidation of retail. >> steve, let me ask you, if

you're advising, let's pick macy's because it's the big one out there, what would you tell them to do right now? do they double down on the fact they do have are a footprint in a lot of markets so they can get close to consumers and get them goods on demand? do they leverage their online components and have to do all those things at once? do they have to come up with kaler mobile app, do door to door delivery, start selling their merchandise through amazon? what would you recommend? >> yes. the to all of them. you're right. this is the issue. because, you know, they're saddled with this great overhead, this great invested capital base in bricks and mortar. all of them are retrenching in that and all of them are making massive investments online. look, some are doing a really good job. you know, walmart, for instance, with the acquisition of jet. they're doing much better. but 100% of the retail share shift has gone to amazon. they are so far ahead and it's a killer app. you know, and remember, there's an unfair sales tax playing

field here too, which is another issue that the trump administration is going to have to deal with. but all of these shifting trinds, kelly, you're right, need to be dealt with, retailers need to really remake their business models and do it quickly or they're going to be gone. >> steve, can you explain to me why, when it's things that are negative potentially toward business like this tariff, the altitude is well, trump doesn't really mean that, but all the positive things toward business, people are like it's going to be great and that's why the market's up? why is it one and not the other? >> you have to look at the building behind me and all of the talk about the tax and the regulatory reform and so forth is coming out of congress. they're keyed up. health care is another area that's all keyed up for reform in the congress. the tariff side is coming through, you know, talks on resetting fair trade. and so that comes back to the new administration. none of them are in place yet.

these are not official pronouncements so i think people take it as an opener on a new negotiation and he's a great negotiator. this is what he does. you start out with some bombastic starting place, it rattles everybody in order to try to shake things out. but it's not in the best interest of the country or china to get into this and everybody knows it. >> well, thank you, steve. merry christmas, happy holidays. steve odman. >> thank you, jon. >> when we come back, we are breaking out the cnbc 2017 playbook with a closer look at sports. and later why uber is moving its self-driving operations from california to arizona. arizona governor doug ducey joins us later in an le"squawk alley" exclusive.

welcome back with some breaking news out of washington involving a fresh exchange between russian president vladimir putin and president trump. eamon javers has more. >> we've been talking about the

nuclear saber-rattling between the united states and russia through the past 24 hours or so, now in more peaceful exchange of messages, the trump transition has just released a letter that vladimir putin sent to donald trump. i'm going to read you a section of it. vladimir putin saying to trump, dear mr. trump, please accept my warmest christmas and new year's greetings. serious global and regional challenges which our countries have to face in recent years show that relations between russia and the u.s. remain an important factor in ensuring stability and security in the modern world. he says, i hope that after you assume the position of the president of the united states of america, we will be able by acting in a constructive and pragmatic matter to take real steps to restore the framework of bilat cal cooperation. he also signs this letter, vladimir putin, and sends it to his excellency, donald trump, president-elect of the united states of america. donald trump has a statement out responding to the letter. he says a very nice letter from vladimir putin. his thoughts are so correct. i hope both sides are able to live up to these thoughts and we do not have to travel an

alternate path. presumably what donald trump means there, kelly, by alternate path has something to do with the saber-rattling we've seen in the past 24 hours in terms of nuclear weaponry. both sides have called for an increased capability in their nuclear arsenals. vladimir putin has told an audience at a press conference in russia that his country is not to blame for any escalation of a nuclear arms race and that they are aware that the united states has been modernizing its nuclear forces over the past several months and years. so clearly a tense moment but now a more peaceful exchange of communications between vladimir putin and donald trump. >> eamon, thank you. we're just days away from 2017. cnbc is getting out our playbook for predictions for the new year. dominic chu breaks down what to expect in sports. >> 2016 was a banner year for sports. cubs won the world series, south america got its first ever olympics, and that's just the tip of the iceberg.

so this year will be tough to beat, but here are three predictions for sports in 2017. brady makes it five. super bowl rings, that is. it's been almost two years since the whole deflategate controversy that sidelined him for four games to start the 2016 season. it ultimately doesn't matter. brady gets that super bowl ring for his thumb and takes another step in his captain pob the winningest quarterback in history. spectator trump. we all know how much donald trump loves the spotlight and when he becomes president he'll put his secret service detail to the test by wanting to watch more live sporting events than any other president in u.s. history. so who's taking bets on whose luxury box he shows up in the most? tight ears back and no matter what you think of him, most people agree when tiger is around the game and in contention, interest shoots a lot higher. so after a slew of surgeries and physical therapies and a 15-month hiatus, tiger dons that

signature sunday red polo shirt and starts winning again on tour. perhaps eve an major. it will be a big year. a slew of these predictions, i mean, i think the last time i got even close to one of these things right is predicting the triple crown american pharoah wins in 2015. we'll see if i can get close this time around. back to you. >> whey to call out your win there. >> only one in like the last three years. >> hey, but, yeah, that's the one you call out. thank you, dom. >> you got it. when we come back, the governor of arizona joins us in a "squawk alley" exclusive. why he's welcoming uber to his state with, quote, open arms and open roads. and later, apple's battery black eye. why "consumer reports" is slamming the company's newest laptop. [engine revving] ♪

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good morning. i'm sue herera. here is your cnbc news update. yermny keeping the terror threat level high after a police officer killed a suspect today in connection with monday's delgadoly christmas market attack in berlin. the suspect was recognized at a train station in italy during a routine i.d. check. malta's prime minister says the two hijacker who is took over domestic libyan flight earlier today have surrendered peacefully. the airbus a 320 was forced to land in malta. all 118 aboard were freed.

a major development in the fight against ebola, merck revealing final test results confirm an experimental ebola vaccine is highly effective. no other vaccine exists. smeshg expected to seek regulatory approval next year. and president-elect donald trump venting on twitter over pressure that made one of his sons abandon fund-raising efforts. trump tweeted, "my wonderful son, eric, will no longer be allowed to raise money for children with cancer because of a possible conflict of interest with my presidency. isn't that this a ridiculous same? he loves these kids, has raised millions of there ares for them and now must stop. wrong answer." his fweet followed an associated press report that eric trump's foundation financially benefits charities connected to his family. back downtown to "squawk alley." >> sue, thank you. marks closing across europe at this hour and stocks are making modest moves heading into the christmas holiday. the financial sector is in focus

big time. there's italy um 1% on the session. two big european banks forking over billions to the u.s. as well to settle charges related to the sale of mortgage-backed securities in the crisis era. deutsche bank will pay $7.2 billion, about half the $14 billion the government originally sought that sent shares sinking a couple months pack. they're now up about 0.4%. credit suisse struck a settlement deal worth $5.3 billion, its shares down a little. and barclays is holding out for the time being. meantime, italy's government has approved 20 billion euros to shore up the country's troubled banks. that includes monte paschi. some green for the italian banks. president vladimir putin was quoted by news agency ir action saying he expects relations between his country and the u.s. to return to normal, adding he's ready to visit president-elect trurp if invited. putin weighed in on trump's comments on nuclear capabilities

at a news conference in moscow. >> translator: regarding the president-elect, mr. trump, there is nothing new about that during his election campaign, he mentioned the need to strengthen the nuclear capabilities of the united states and strengthening and expanding the capabilities. there's nothing new about that. >> president putin also sent that letter to president-elect trump that eamon javers just reported. both the ruble and russian stocks falling today with that rts moscow index up 47% on weaker currency year to date. >> thanks, kelly. and the california dmv pulling registrations from uber's self-driving cars in san francisco. in response, the cars are now on the move to arizona. google's own waymo, the name of the self-driving car unit that recently spun out of google x, is alreadiest testing a

self-driving program in arizona. let's look at self-driving cars and arizona regulation. doug ducey is the governor of arizona. he joins us in a cnbc exclusive. good morning, governor. >> good morning. how are you? >> i'm doing great. i hope you are too. this is interesting partly because california said you need these permits, there's a slight cost to them, we'll fast track them, uber didn't like that. but the california dmv was going to collect information about when the self-driving car gave control back to the human driver and the accidents that occurred. are you going to collect that information as well and post it publicly as california does? >> well, arizona is really on the rise here, and we're excited that companies are leaving california and coming our state. uber is on its way here right now. i'm going to go meet them at the state capitol in about an hour. and of course we're going to have proper regulations so that

we can make sure that there's public safety for these vehicles. but we also want to be a place that's open to business and innovation and entrepreneurs. google recognizes that. uber recognizes that. and we're proud to be testing these cars in the state of arizona. >> how do you define proper regulation when it comes to something like this? to me google's waymo is different because they're not running a service that's moving customers around at this point. what are you going to require of uber in terms of what they report to you and what you report to the public? >> well, there is a permit that uber is going to have to fill out of course, which we have for any vehicle in the state of arizona. there's also a task force that includes the department of public safety and the arizona department of transportation. people need to know there's a human sitting in the drivers seats of these cars while they're testing. this testing and experiment

thailation is welcome in the state of arizona but our first concern is always going to be for public safety. >> governor, i was going to ask, is that your ms. anl to silicon valley that arizona is open to innovation and california is not? >> arizona is open for business. arizona's stock is on the rise. i've visited silicon valley several times as governor, and i think people are starting to see that they can grow and invest in the state of arizona and they're not going to have overly aggressive government bureaucrats. my background is in the private sector. i know what it takes to grow and build the business, and i want entrepreneurs all across the country to see arizona as the place to be. >> as we watch president-elect donald trump negotiating with lockheed and boeing on twitter, it's worth understanding more about his leadership style, governor. let's take a listen to what he told cnbc's "big idea" almost ten years ago. >> i say it ad nauseam. i'll tell people during the negotiation, you think you're the only one? i have ten people that want this

deal. and sometimes it's so and sometimes it's a little less than so. but i always create competition because it makes the other side a little bit nervous. i've had my own people come up to me and say, oh, mr. trump, you shouldn't keep telling them there are other people. i said do me a favor, let me negotiate. i want to brainwash them. i want them to think there's so much competition. i think that's important. know your subject, create competition, feel confident in yourself. >> governor, lockheed has facilities and employees in arizona, so you've got a dog in this fight. how do you interpret the president-elect's negotiating tactics right now? >> we value lockheed very much in the state of arizona, but our president-elect is a skilled negotiator and a successful businessman. i'm thrilled about the opportunity. you look at the stock market which is often a leading indicator for what's going to happen in the economy. itis not only arizona that's a buy right now. we're looking at record levels.

so i think we're going so to see an economy that's growing and arizona wants to be part of that and wants to be a place that is bringing businesses and has its current businesses expanding. i'm excited about what's in the future for the american economy and the american worker. >> governor, just to go back to this uber issue for one moment, what happens if something tragic takes tlas plais on the roads? these are cars trying to drive themselves in unfamiliar conditions all bee wit people in the front seat trying to make sure nothing happens but you're putting yourself and your state out there in a big way to welcome these cars into your state and what if there's an accident? >> well, the ultimate goal is here is that we're going to have increased public safety. you know, there are tens of thousands of accidents that are avoidable every year. there are deaths that are caused by human error. with this technology coming to the fore, we believe we can have safer roads, we can have less congestion, we can have a better environment, we can have more productivity. but we want to see safety be the result of this. i believe uber wants the same.

again, this is -- this is a test. and uber is going to have to move from out over the course of time. today there are actually humans sitting in the drivers' seats of this test so, we know what's possible here and we have confidence that uber has a plan to make this happen. and we want to be a place where they can test it out. >> well, we will be watching those driverless cars as i know you will as well. arizona governor doug ducey, thanks for joining us. >> merry christmas. thank you. >> when we come back, first it was iphones and now it's more headaches for apple over its newest macbook pro. we'll tell you why. but first, rick santelli, what are you watching today? >> well, of course, i'm watching how markets seem to be setting up for the final trading week of the year next week. looking at interest rates, also looking at foreign exchange. we'll have some observations regarding next week's trade and how markets may close after the break.

coming up on "the halftime report," the retail, what the sector's downturn could be te telling us about the consumer. the pulse of the individual investor. we're going to break down the top stocks they were buying and selling in 2016. kelly will do that in about 15 minutes. see you then. >> looking forward to it, scott. thank you. to the cme group, rick santelli with "the santelli exchange." rick? >> thanks, kelly. you know, i most often, every day, pay quite close attention

to interest rates in the cash market. now, of course, there's many ways to trade interest rates in the fixed income markets. the tlt will show a year to date chart as i'm speaking. tlt may be an easier way for many, etf. and if you look at chart, you'll see it's hovering in the 118 area. the reason i bring it up is there has been a lot of e-mails coming into my account the last couple of trading days talking about how there are significant positions going into year end being placed in out of the money calls, which means they're higher than 118. we're talking 124 to 126 area. so of course this is catching some people's attention. why? because the size is rather significant. so what does that all mean in english? there are some out there looking for a dip in rates into year-end and many of these options actually have a life that extend beyond december 31st, but it doesn't diminish the fact that

as the market should prices move higher and rates move lower, those out of the money calls even though they're not in the money, will appreciate in value. so let's look back at the yield side now. i've used this chart many times in 2016. this is a ten-year note yield starting in september '14 to today. and to put my slant, i somewhat agree. there may be a bit of a dip in yields going into year-end. the issue is how much. okay? the most significant area on this chart is from september 17, 2014, a 262 close. that is huge. what is the high close so far right now? 260. the second most important area is in the mid-240s. from june to july of 2016, what we had was -- 2015, what we had was a 48 1/2, 47 1/2, and 45. all these came back to haunt us again. and finally, the year-end close last year was 227.

so if i had to take a slant on a little bit more bullish as we maybe coast in year end, people that have nailed it and been short maybe since the 170s, want to take some of these off or lighten up or do some sector rotation, my feeling is that the money is that maybe you could test into the mid-240s for sure, but 227 to 230 still coming up strong in some of my technical models. so i would use this area as the pivot, 227 to 230. if you really wanted to be a wild card, you know, maybe that's like 4-1 odds on the close for the year. i think that it's going to have a tough time getting much above 262. and finally, there's a couple other charts i want to show you real quickly. year to date of dollar versus canada and year to date of dollar versus yen. why do i bring them up? we all know the euro at a 14-year low against the dollar. we know that currencies like the british pound, we haven't seen the relationship against the dollar in favor of the dollar since the mid'80s.

but two currencies are still doing better. the canada is higher against the greenback and to a lesser extent getting closer and closer and unchanged is the yen. and i find that very fascinating. pay particularly close attention to bank of japan for 2017 to see if they're motivated a bit by what our fed is doing. jon fortt, back to you and happy holidays, merry christmas, happy hanukkah. >> thanks, rick. merry christmas. still to come, one company connecting retail investors with start-ups that are hungry for funding. the circle-up is next.

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>> it allows users to invest directly into retail and consumer companies. investors can access ceos and founders as well as experienced investors in making their decisions. so far the company has raised over $300 million for their alumni companies. brian callbeck is the ceo of circle up and joins us now. good morning, ryan. >> good morning. tell me, first of all, how does this change in administration, president-elect trump getting ready to take over in january, affect the platform, your outcome? regulation -- >> i'm not sure that deincreacr regulation is a good thing to be frank. this is -- i think renovation

from finra and the sc.e.c. is a positive thing. these are people's dreams. we support regulation. i think the changes that president-elect trump will make is still remaining to be seen in terms of this space, but one thing we are very confident in is that the broader trends in consumer retail that are benefitting smaller brands will continue. >> ryan, as we look towards 2017 and dow 20,000, if we are able to get there, there are a lot of investors who feel like the public markets getting kind of expensive. they're going to be looking for areas where they can make some money. what are the best investors on your platform doing that maybe the masses that are on circle up or not. >> diversifying first. that doesn't mean investing more. it just means investing into multiple companies. typically we see five to ten companies are going to be more successful than those investing

in one or two. you know, while we have investors in the platform, a majority of our capital is actually from institutions. that's private equity firms, endowments, et cetera, asset managers, and typically regardle regardless. >> money ball investing right now. >> good question. so we use a tremendous amount of data and machine learning to identify consumer retail companies before other investors can. in consumer there is just a lot of data to look at. where the companies are sold, price points, the products, what end users think of the product. much more data consumer than there is in any other industry, and we're able to use machine learning to digest that data and find these companies more effectively and efficiently. >> finally, ryan, are you able to see the impact of a major ipo? folks are looking forward to

uber and air bnb perhaps in the next year auto two. what impact that has on your sign-ups and membership. >> i don't think ipo's especially in the tech sector have a meaningful impact on our marketplace or the technology that it's built upon. what i do think is having a big impact is just the avalanche of m&a in consumer space. in consumer retail, large brands are losing market share to small brands, and that's been happening for five years. the result of that loss in market share is that these large brands are scared. they're terrified. they don't have an rnd pipeline. on average they spend about 1.5% of sales in rnd. they're buying companies. those purchases, that m&a, does have an impact on us, and it encourages the startups, but you it also encourages the investors to be more active in the market where. >> ryan, thanks, and happy holidays. ryan, the ceo circle up. >> as christmas is fast

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you're watching shares of apple, then they're about flat. the mac book pro, the one that includes models with the touch bar, failing to achieve recommended ratings from consumer reports for the first time ever because of inconsistent battery life. kelly, first, it was iphones with this battery problem. now mac book pros. they tested all three different models. they ended up with just wildly different -- i mean, one -- the 13 inch model with the touch bar ran for 16 hours in the first trial. less than four in -- rough year for batteries. >> they are saying, look, our testing is different than what the typical consumer is doing. there's clearly something different going on here. >> of course, i not just apple. we've seen samsung with those huge battery issues with the galaxy note 7. you wonder is there something in

what they're trying to do with technology cramming all of that chemistry into a small space or what? >> this is not a fair comparison, but i keep thinking of the hover boards. they put all those cheap batteries in them, and they kept exploding. the innovations are wonderful and amaze, but if we're talking about similar kinds of technologies, are these things really safe? >> the mac book pro is not apple's top seller where, it sells lower priced laptop more often. this would be a bigger issue if it was with the latest phones, which, of course, do have their battery issues. >> does apple know this, or is this new information? can they do something about it or not? that's the interesting question. >> you can bet that the engineers are trying to figure that out, whether it's something they can fix in software or not. of course, they have the apple store that makes it a bit easier at least to get some relief. >> i have one of the old pack book airs. the battery is wonderful. it charges much more quickly than my iphone, so whatever they

did in that case, it seems to be working quite well. >> i ordered one of the new pros, so i'm a bit worried. i'll tell you how it goes. >> have to check it out. >> watching the markets, we're still about flat on the dow. halftime starts next. welcome to "the halftime report." our top trade this hour, the retail wreckage. stocks plummeting over the past couple of days. raising some serious questions today about the state of the consumer and for that matter, the trump rally. with us for the hour today, steven weiss, josh brown, jim leventhal, john najarian. what's going on? doc, what's going on with retail? really bad couple of days. >> yeah. bed, bath, and beyond, that one just fell apart this week. great call by courtney and the group over at loop on that.