let's take a quick check on the markets. the futures for most of the morning have been in the red right now, dow futures down by about 170 oints. s&p futures down by 18 nasdaq off by 48 depends on you if you see this as more of the same. we'll have a short day today and see you on wednesday >> merry christmas >> happy holidays. >> squa"squawk on the street" bn right now u. we're at the new york stock exchange, cramer and faber are off today. futures did take the spill after a mostly positive overnight coming off the worst week for stocks since the crisis. dow future us don. stocks close at 1:00 eastern for the christmas holiday. we have oil below 45

we begin with mnuchin envolking crisis era language. >> on top of that, reports mounting that president trump has discussed the possibility of firing fed chairman jay powell mulvaney and mnuchin with the fire storm over the weekend. >> and boycott apple a report out of japan that chinese are avoiding people to avoid the tech joint >> on this shortened trading day, markets close at 1:00 eastern. we'll be closed tomorrow for christmas. there's a ton to digest starting with the letter from the treasury secretary saying he spoke with the ceos of america's six largest banks. said the banks confirm ed they had quote ample liquidity. the president has considered firing powell, munuchin along with mulvaney trying to ease those concerns mulvaney saying the president now realizes he can't do that.

all this over the weekend leading to all kind of futures reflecting that today. >> i was really surprised to be quite honest when i saw the news yesterday that mnuchin had called the bank ceos the fact they made it public thinking that was going to ease concerns, maybe not realing it would only raise more questions of what do they know are they worried about something they can't seen? >> we're not having a banking crisis just a bad stock market, coming off their worst level in ten years. so there's concern about the treasury about what's happening in the market and some efforts to try to calm things down i mean it is wiping out a lot of the progress this administration has made in the economy. and with a markets from corporate tax reform and redegree ration and that sort of thing, but yes, very odd move, very strange raises me questions than it answers. we don't know. maybe he was just trying to calm things down and didn't know the

protocol because there's a lot of new people there in the treasury that haven't been there in this crisis >> look, on a sunday, from vacation in mexico, just add it up, okay, why was it necessary to make these calls. and if so, why go public with it realizing that maybe it was going to raise or not real estate realizing >> you only get a certain number of shots on something like this. justin walters, widely followed economist tweeted last night, if u you wanted to create market volatility, this is how you would do it. as for the powell reports, mick mulvaney did discuss the president's authority, if you believe there is one to fire powell, in an interview over the weekend. take a listen. >> does the president believe that he has the authority to fire the fed chairman? >> no. i think and sorry, should have talked about this br i think he put out tweet saying he now realizes he does not. >> we heard mnuchin say

president had told him that. we haven't heard -- >> i did speak with the treasury secretary last night about a bunch of things including a lapse in the shouutdown >> the president's never shy about tweeting about anything. why haven't we heard from him? >> we got a direct quote it was something i think mulvaney needs to spend more time on twitter following the treasury secretary and president, but yes, it doesn't put concerns to rest completely. it did a little bit. i think. and it seems like the administration had looked into this because they keep saying we don't think we have the right to do so and the law is very ambiguous. you can fire a governor for cause, but what does that mean do they have the cause would you have to fire the entire fed board with the protest? i think it's a messy situation and clearly, mnuchin is trying to put a lid on it but it's out there the president doesn't want the

rate the fed just raised rate and said two more are coming >> even the fact that the president is musing about it you add everything up, whether you're worry about the fed raising rate, trade, the economy slowing down, why mnuchin made the phone calls to the ceos, you have another thing to add on the list what's a positive catalyst to reverse the declines we've witnessed day after day? >> there's a couple, to that point, the chinese are suddenly talking about new progress in trade talks. that's gotten ignored today according to some reports of the chinese ministry u.s. retail sales end season on a high note. i tweeted in a normal year, this would have been all we talked about. today and most of this week are the fact consumers, and they've shown up >> if you look at the action, they're saying they don't believe it can last. the market is questioning the durability and sustainable

there's in question the numbers are coming in decent we got a consumer spending number week, which is okay consumer confidence continues to hold up and higher levels in this economy, but there continues to be more gloom within the equity market and time will tell whether the fed is right, the strategists call calling for gain in the s&p 500 next year are right. i think there's a disconnect here >> there's a divergence between real economy and sentiment you look at the numbers. they may be softer than they were, but it's not like thicngs have fallen off a cliff and yet sentiment has gotten so negative you would think we're on the pres pouse of a recession or at least a dramatic comedown in economic activity. and the data to suggest otherwise. >> so matt wrote about this, who sort of, a technical analyst he said actually the williams

comments were positive for the market that is john williams talking to steve liesman friday saying we're flexible, we could evening change our balance sheet policy that was lacking during the fed news conference. he said expiration day on friday don't read too much into it. he said the market is not always right. it is always right eventually. so let's see how it shakes out with regard to fed policy and if the administration and government which continues to be shutdown can offer any reassurance. >> the comments worked for about ten minutes. >> it was a rally moment again >> as mentioned, parts of the government remain closed as the shutdown enters its third day. third of the year by the way eli is in washington with the latest any talks going ong? >> right now, negotiations do appear to be at a standstill there were talks oaf the weekenover the weekend, but they broke up

without a resolution last night, president trump tweeting this. as everyone knows, we can't have border security without a wall technology are just bells and whistles mike pence did meet with top democrat in the senate, chum shuker schumer said that pence put an offer on the table, but also said that unfortunately, we remain very far apart. now asking mulvaney said they could come down $5 million the senate supported $1.5 billion in border security, so maybe there could p be an answer between the two numbers, but they have not arrived at it yet. meanwhile, the partial government shutdown continues to roll on. about 25 a% are affected 800,000 federal workers are without pay. those e here in the d.c. area and across the country

some actsies include the treasury department, which not only handles all of the issues regulations, but the irs that means that some could be delayed for now. also on the shutdown is a commerce department. 86% of commerce department employees are on furlough and that could affect companies that are applying for steel aand lum numb also the agriculture department. farmers applying for aid could be impacted by the shutdown as well the small business administration it will continue to administer loans to its customers and small businesses lawmakers are back on thursday, gu guys we'll see if they can find a resolution then. >> thank you let's bring in john, chief investment strategist at oppenheimer and director of global macro at fidelity

investments. thank you so much for coming in on christmas eve we appreciate it >> no ordinary christmas eve >> aside from negative data points, we don't have a lot on the calendar this week >> not a heck of a lot and i've got to say it looks like we're not going to have a santa claus rally. but i think we're right about where we should be i think you've got to keep things in context. you've got to issues of china, the fed, as well as the price of oil in decline over the last three months or so this is stuff that rallied the markets in 2015. into the first seven weeks of 2017 it wasn't the end of the world didn't end the bull market this may be another brick in the wall in terms of the wall of worry that the bull market >> '16 lows that i don't think we go back, but

it's a parallel situation in terms of concerns. they're different specifics. you've got trade wars. you have related, but if 2015, remember januaet yellen raised r the first time, it had been seven years or so. everybody acted like it was the end of the world the market had gone up since then a considerable period of time the next thing was that the price of oil dropped $26 a barrel in february of that year. people thought it was a signal the economy was abl to roll over on top of that, you have the situation again, it's fed, oil and china. very similar i think that what we've seen over the weekend with mnuchin, i think it was a genuine thing maybe within the administration.

it was damaged if you listen to the phone calls coming in from many retail investor, they're getting worried. it would seem to me the headl e headlines are dark, so it may have been a good idea and may have been quite genuine. i'm glad he's there by the way >> john's not ready to declare the bull market dead i think that's clear what about you >> well, we're doung 18% from the high of the low in the s&p and we've had the trifecta of things happening we have shifting from minerals, we have a lack of liquidity and we have poor selling when you add those three, you get an exaggerated domino. if we have norm alley quidty, we wouldn't be down much more than 10 or 15%. if we end up being down 20%, everyone is going to ring the bear market bell and i think that's probably a little bit

premature. in 2011, the market was down 21.6% in october after the government shutdown and the downgrade. so after it went down 20%, went down two more percent. same in 1998 every 20% move is not necessarily a bear market. just an exaggerated correction but i fear that investors are going to look at this and say after a nine-year run, you know, it's finally over. we need to sell when in fact actually down 18 is% a forward pe, i would rather take the other side of that with that trade. >> what if we've seen as good as it gets. back to september, kudlow says no entered in sight. s&p has given up 400 since then.

you can't tell me where earnings are going to be, although they're going to be lower. growth is going to be lower. growth slower. so how do you know with what a fair price for stocks really is? >> i think that's one of the difficulties usually by this time, i've been in the business r for 5 years. six t oppenheimer. usually i've already put out my target i'm just waiting as long as i can because many of my counterparts have had to revise theirestmen theirestmen estimates so far, fundamentals have not deteriorated seriously mostly technicals. as a result of that, i'm looking at the fund mamentalsened i'm lo at three to five years we think it should be a real big mistake as my fellow guests said here, for people to sale into this as low as we've gone. this isn't 2008. regardless of the headlines. at least in our opinion. >> if you could have your choice

of one of the following, what would you pick president says i'm not firing powell we get a government deal, the shutdown ends. the fed says we're done or the china, china says we got a trade deal all of the above >> the fed is very important here and the track for earnings. i'm not a big believer in s&p targets. i think about the value proposition. it's like buy iing a new car or anything you're getting probably 5% earnings the estimates are 9, butcoming down as they typically do. 2% of dividends, which was made clear last week and you get that for a 14 multiple, that's a pretty good value proposition.

with china, with the fed, with the government, a lot of uncertainty,but at 14 multiple we're getting compensated and it's worth remembering, changes in the valuation multiple at these low levels can be b extremely powerful we get that 5% earnings, 2% dividend next year, that's 7%, but if the pe goes from 14 to 16, you're looking at 20% returns all of a sudden. it's important not to forget that >> happy holidays. thank you. >> when we come back, check out shares of apple. lower in the premarket more than a percent. report out of japan today saying that chinese companies are urging employees to boycott the tech giant and taking another look at the futures ahead of the opening bell pointing south after an early

rally overnight. futures down 163 holiday shortened trading day. the market will close at 1:00. we are all over it here. sidewalk on the street when we come right back. i'm ken jacobus and i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

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the ibm cloud. the cloud for smarter business. ♪ ♪ 38 minutes before the opening bell, let's bring in art cashin arthur, merry christmas. good to see you. as if there wasn't enough the think about. trump versus powell. mnuchin calling the ceos >> i think the mnuchin thing is the odd man out. credit default swaps have not widened. i don't know what would make him make that call it's an odd call to make

certainly, the easier call would be to call powell and say you're checking on the banks every day. you don't see it in the fed funds market although that's not fully operative, but there aren't real signs of strain here >> kind of the communication misstep. i feel like the question we have to be asking is what would the market do if president trump tried to fire jay powell >> i think there would be a problem. we've had history of fed pressures on presidents have lbj went physical on martin and harry truman tried to strong ar him also as the fed was coming off the world war ii phase when it really was the orphan

child of the treasury. so it wasn't independent in world war ii, really. so we'll have to wait and see, but i think it would be disruptive enough. the market is concerned primarily b about the open endedness of things. trade wars tariffs. things like that i knew they were committed to december i think they may be through for the year >> merry christmas >> merry christmas >> wouldn't be the same without you spending this day with anybody else >> thank you and hang around we should be singing nelly later on >> always look forward to that

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you're watching "squawk on the street." opening bell in two minutes. busy monday morning after the reports about whether or not the president wants to fire jay powell obvious the treasury secretary's call to the banks. stocks will close at 1:00 and mnuchin will hold a call with a president's working group on financial markets includes the fed's board of governors, the sec, cftc and to assure normal market operations. >> this is what people are twitter are calling the plunge production team that will gathe to talk about the market look, the administration obviously wants the market to go up it's been the key barometer in many respects. certainly for the president. for his performance over the first two years. cited it all the time. when it's gone down, has blamed whether it's the fed or other factors for doing it

interesting meeting and timing >> the whole idea of the team is kind of nonsense they don't get together and sort of manipulate the markets higher i don't think. i think that's kichbd stuff that happens in china where they have more direct market intervention. clearly, the treasury secretary is worried not sure how much should be communicated that's being debated today i wonder what the market reaction would have been if we weren't coming into this with a more than 15% slide in the s&p 20% from the nasdaq from its highs. last week was brutal both the japanese market an the nasdaq fell into bear market whether it's going to be an exaggerated correction or end to the bull market, that's what people are trying to figure out just how dire the outlook is and how much of these headlines around shutdown and fed politics are going to move the markets.

>> rbc has an investor survey and asked investors what keeps you up at night. the president is above tariffs, above monetary policy. it's above rate cycle worries, corporate debt the number one response was trump. in general rbc, which says a lot about the uncertainty right now. there's the opening bell and s&p at the cnbc real time exchange today. the new york city ballet celebrating the nutcracker at the nasdaq new york cares coat drive in its 30th year not a ton of corporate news today. but sarah, i know you have some. >> watching campbell soup. we got news. we knew the international business was up for sale, so now, we know that kraft hines is in the running second option for that business. they're trying to slice and dice their business and engineer some sort of turn around plan the bigger news is that we have

a new ceo coming in at the end of january mark claus industry veteran still puzzled at the timing of the announcement of that con agra had a mark down u to the markets on the same day campbell l announced he was coming in to take over because of all sorts of issues we'll watch campbells soup i was going to point out energy stocks worst performing sector down more than 22%, the question is is supply, the economic demand fundamentals changing for the global economy and what is that telling us because clearly, the it's been a sharp slide and is impacting everything >> 45 bucks is where wti is. it was just under that level, too. i was also watching snap snap was under five bucks. it's barely above that now just call it at five bucks

that's been a dramatic decline for a stock and the company thags been in real bit of question about what they're business is. model is going forward. just something to keep an eye on for certain. we could look at the banks and things like that with interest rates on the slide they've been on jpmorgan, we're talking about the mnuchin call to the banks. we might as well look at the banks. jpmorgan, bank of america, citi. all of those names opening up in the red. >> indeed. lot of discussion about people who stuck with the banks maybe a bit too long even as we saw the market start to roll oaf interesting week because you're going to see year end action take a name like twitter today closed close to the bottom but we know what a tear it's been on. speaking of social media, this story about snap is largely about how evan speegl's sort of different way of doing things in the business model and platform

itself helped the company until it no longer did that's when you saw shares go below five >> then facebook made another play then i guess didn't get it so just decided to copy or at least do something similar with instagram stories, which has worked out clearly i'll say the one upside is that gas prices have come down for americans and unclear if we're going to see that translate, but national average for a gallon, 2 clnt 2.43. now down more than 54 cents. so silver lining there to the energy slide which seems to have r more of of a negative impact on the stock market now than it used the because we're such a major energy producer. >> just yet another reason why retail sales are expected to be strong michigan number out. last week. strong consumer expeblcted to spend, te

retail stocks has been difficult lately maybe not believing that the numbers are going to be as great as some think. >> but but that just goes back economic story being on the surface pretty darn good >> also back to the fed predicament, r which is how do you read the fundamental good data and look at what the market is telling you and coming with a policy outlook i wanted to bring up one thing the journal hit on this this morning. it's important nobody's talking about i there's a new cast of voters at the fed next year. there's a turnover that happens with rotating members of votes on monetary policy governors get a vote new york geds a vote, but we're going to have four new voters. bullard, george, rosengren and evans. most lean hawkish, which may not be what the market wants to see. >> not anymore >> they've all shown they can flip-flop because they've been there for a while. maybe that's a good sign that if they see changes or

deterioration, switch their hawkish views! by the way, we're watching 2400 here on the s&p. watch for presidential tweets today because if he were to come out and say something about powell, it could move the market he did just tweet about two minutes ago. virtually every democrat we're dealing with strongly supported a border wall or fence it was only when i made it an important part of my campaign because people and drugs with were pouring into the country unchecked they turned against it that's from the president. again, focusing on the focus of the shutdown obviously >> and mulvaney signalling, he did interviews this weekend that this could go for a long time. and i just wonder if the publicity around this, 420,000 federal employees will work without pay. 380,000 federal workers will be put on unpaid leave. these are huge numbers of people that are going to be affected at the government level in term of their money and at some point if this runs into the new congress,

it's going to come out in the job numbers. even kevin has et told us the longer the shutdown goes on, the more impact it could have on b jobs numbers and the economy >> i wonder how much the economy cares about the shutdown but if you have a deal, would yo you see a meaningful pop in stocks the list you read earlier you know of all the things i think the shutdown deal would have the least impact on positively on the market than any of the other things >> s&p has traded positive through the past five shutdowns and a lot of the good action comes on the tail end of that when you're starting to get a deal by the way, below 2400 now levels will be b very key to watch. >> we have to watch the bond market and dollar. the dollar is weakening. it's been trading near one and a half on trade concerns, on the fact the u.s. looks better than the rest of the world.

if we start to face questions about wha going to happen to the fed chair, confidence shutdown in the u.s. and the u.s. government and u.s. economy, the dollar has been weakening. so we'll continue to watch that down half a percent an we're going to watch because treasuries are close to inverting. we're watching the spread and we're at lowest levels we've seen there since financial crisis if there is an inversion, whether you believe or not that's a recession nair signal, it's going to be a huge deal. >> you mentioned some of the issues around the credit markets and high yield there are some big investors worried about the break down of liquidity in the high yield market wondering how much of an issue that is. is it seasonal, towards end of year, hedge fund troubles, lick wii documentations and the like, but it is top of mind on some big investor's minds activity in the below investment grade market and if that

continues to lock up how much of an issue that will be. as we always look to the credit markets, which have been functioning fine right? other than little pockets that we've discussed like high yield and elsewhere. but not like a huge issue yet. but something on the top of a lot of big investor's minds. >> for sure and we're showing the funds flow on these high yield funds. fifth week in a row of outflows. that's an exodus that's picking up and for the first year since 2015, high yield investors are going to take a loss, but we add these factors together december didn't have corporate bond sales that's unusual >> we haven't seen that since the crisis >> so we'll watch it no questions tell us what they're signalling. also the fact about if we have liquidity concerns, married with the growth and explosion of etfs, what's that going to look like

everybody's been worried if you start to see some losses there is it going to spiral just because of some of this etf business that's been going on, especially with regard to corporate robonds. >> you think about the big looming questions, they include how companies will handle leverage especially if economic activity falls. what happens ipo calendar? does the drop in prices, do we get a weak print on q4 gdp is 27 a risk as households are high ly leveraged to access prices now that's when we start getting into waelt wealth effect >> our pal talking about loans are getting killed today. and in general, right? all he's concerned about, whether it's yellen talking about high levels of corporate debt other smart investors have

raised the issue on, paul tuesday r jones. people of that ilk talking about credit, debt, credit leverage and how companies are going to deal with that >> we'll find out next year. a trillion dollars in corporate refinancing. >> getting more information on this call with treasury. for that, we'll go to washington once again >> we'll from the senior treasury official who gave me a little bit more detail around that phone call that mnuchin had with bank ceos and the subsequent statement they put out. this official telling me they viewed that as a quote, prudent preemptive measure given the market volatility we have seen last week and over the past several weeks. what i'm hearing privately is that the news about jay powell was one part of the catalyst for this call. but it was also again, the wild swings we've seen in the marketplace and the nakt thfact entering a very prolonged government shutdown. i'm also told the bottom line out of the call is that the

economy was strong there are no major concerns about liquidity or about lending, that this was an effort by the treasury department to be trans parent that's clearly backfiring on them now perhaps creating concern where there was none to begin with now treasury secretary steve mnuchin will be having that phone equal the working group on financial stability today. the fed, the sec, the cftc will all be a part of that. i'll let you know if we get a readout from that call back to you. >> it's an important distinction to be clear. you're saying the call was about in a sense, policy and powell rather than market liquidity that was the focus of the call >> the catalyst of the call. the reason why this call was placed to to begin with is partly jay powell. partly government shutdown partly market volatility and i think the call was going both ways. both sides sort of seeking assurance from the other and the

bottom line being there was no concern over liquidity, lending. we've talked a lot b about does the treasury department know something the markets don't know i don't think that's the case. this was intended to be a check in at a time when a lot of drama in d.c as well as a lot of turmoil in the marketplace and by putting tout statements, it actually added to that sense of uncertainty, rather than taking away from it >> have we ever seen anything like this? is there an example where the treasury comes out in the middle of a steep wall street sell off to talk about bank liquidity >> when there's nothing wrong. so the financial crisis -- >> there's nothing wrong, in case you were wondering. >> the financial crisis is the best example of that again, this is a different administration with a leader not steeped in government policy in the way that previous secretaries have been b. the way that again, they're

frame iing this is is thought t would be a preemptive measure. >> in the first paragraph of the treasury's own statement, it talks about liquidity, lending, business markets all other market operations. the ceo saying they have not experienced clearance or margin issues it's their own statement that leads to more questions. i get the clarification today and maybe trying to ease some of the concerns that exist in the marketplace today as to why the call was made. it was for a number issues, not necessarily just because of market concerns or liquidity or what not i do think was it prudent, wasn't you expect the treasury of the secretary to be in conversation with the people of the like of jamie dimon and others >> putting the statement out so again, the way that i'm

hearing it described internally is if it had come out during a christmas weekend that the frshry secretary had these conversations while on vacation with these bank execs. people would think oh my god, what's wrong with the economy. it must be really bad if the treasury secretary is breaking into his vacation in order to talk to these ceos so perhaps to get ahead of that, they put out the statement which again leaves us during the christmas weekend to have those same questions you can question the communication strategy, but what i'm told is that there's not again some secret the treasury know that is the rest of us don't. >> thank you i think frankly that the bank ceos on the calls have somewhat of an obligation to come out publicly and say exactly what was discussed. and the context in which it was discussed. otherwise, that he has questions are just going to continue >> i think the treasury secretary -- >> persist >> the treasury is trying

clarify. >> i think they're trying to clarify, but the implicit thing here and you know, whether jay powell is a catalyst or not sh, the fact it comes on the same weekend there's a report that the president is looking at and talking about the potential or whether he has the right to fire jay powell, you can't help but wonder is the treasury secretary asking these ceos, what would happen if the president moved forward on this. would there be a market problem. that wasn't in the release this was a weird weekend >> thank you >> important report. we'll come back to you as much we can today brett, all dow stocks are down about 15 s&p names are green bob. >> happy monday, everybody and happy holidays for what it is.d. not a recent record, but still bad. look at the sec tors here. usual suspects down. tech, industrial, consumer discretionary. amazon is down 2%.

20% for the month. banks are down 20% for the month. gold miners, gold is at a five-month high. we've took several legs lower that's week. it was not on nothing. we had the leg lower on the powell press conference. this has been a lot to deal with the trump headlines. the government shutdown. withdrawal from syria. the mattis resignation may have been the most important thing of all in terms of market perception of the white house and then we had the navarro interview on friday. that didn't help things. still, we are hoping for a rally. been talking about it for several days there's hopes for pension rebalancing. how many reports have i read there was another one out today. $110 billion potential buybacks rebalancing. then there's the buybacks. we had 80 announcements in the last couple of weeks

they're still out there. whether these two could make enough of a difference, it's not clear. unfortunately, the pensions don't send us press releases it's difficult to monitor. we can say it happens, but difficult to monitor then the santa claus rally a lot of these favorite things have not worked. including the tendency to rise santa claus is a specific thing. first two of the new year. the average gain is 1.3% since 1950 not clear why this works people believe you have tax law selling in the first half then people start buying stuff to replace the stuff their tax law is harvesting. that makes a little sense. we'll see if that moves. the question for 2019, what's the right multiple and earnings number let's do an exercise assume no earnings growth in 2019 zero 162 is the dollar value. what's the right mull principle? 15 r or 1 isn't right. so we reduce it. quo to 14. pick 14.5. those two numbers, you get

23.50ment we're 30 points away from that. a much lower multiple and you get 23.50. i think the important thing here is what happens with with this meeting today here very interesting over the weekend. these discussions here we've got the shutdown the powell issue and what mr. mnuchin might be doing here look at the s&p 500 by the way and how far it's come in the last month, but a lot could come out of this meeting. this team is one of the great legends of wall street never been any evidence they buy securities or futures. they may have been involved in 2008 this encouraging the government to help out general moto motors to that extent, they can affect the equity markets this idea that they're going buy equities is one of the great myths along with no gold in the gold vaults. this could go anywhere

that's why i'm so interested in what he might have to say. >> back to you >> thank you to the bond pits where this sell off in the u.s. dollar and lower treasury yield is accelerating morning, rick. >> good morning. i don't know if accelerating is the word i'd like at, but if you look at a week of twos, the melt is considered ongoing. and if you open the chart up for two year note to august, that's the last time we were town here. but really has been rather steady and organized i know people were very taken by what mnuchin and the ceos did with regard to that publication. i read some of the tweets and the e-mails. i personally think that if you look at all the it shallry secretaries we've had over the last 50 to 75 years, they're all rather unique and some come from varied backgrounds, but in the end, mnuchin has talked about

market structure worried about the structure, the exchange, how it all works not sure i run into that all the dire prognostication everybody else did if we look at an april start the note yields, you get a good picture of what's been going on. with regard to the pattern, how we ended up 50 bases points down to 2018, to me, it was a slow burn for treasuries. if we look at lqd since september, it's had a bit of a bounce but of course, everybody's watching the hyg being more high yield. look at a year to date, understand it's hovering at lowest levels since early 2016 once again, it's been orderly. if we switch to the securities side and i think barclays, this is a three-year chart of the securities relationships, you can see it's not at dire levels and isn't anywhere near it was in the past crisis

finally, the dollar index. it has been one choppy market, but as with we hover not far from 96.5, wee about a penmy off our high close of 2018 and considering all the choppiness, it's weathered the storm pretty well carl, back to you. >> thank you very much rick santelli. a rough year for oil crude hitting a nearly 18-month low. low 45 today a form er executive is with us rater. we last 2400 boeing below 300 it's blood pressure a while. m. 92 back in a moment rebekkah: opioids has taken everything and everyone i've ever loved away from me. everything. i blew my ankle out and i got prescribed pain pills by my doctor. if making my detox public is gonna help somebody

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health care is one of the best performing sectors of the year, but there are plenty of stocks caught in the cross hairs of president trump's policy. what's in store in bertha coombs with more. morning. >> good morning. yeah, health care had been the standard bearer with the best performing sector coming into this quarter, but just going

negative here today. sort of the last man stand ping apart from utilities that decline, there's a lot of uncertainty, but some is because we've seen some regains. take a look at the medical device makers. they're still up for the year among the best performers of the year part of it is because you've got a lot of names there that are high fliers. names like dexcon. that has a forward pe of 225 it's still up 88% year to date, but you can see the large pullback that's bigger than we saw with the market. abiamed, they were involved in heart pumps. they have a forward pe of about 22 none the less, ubs is one of the ones they like they say the demographics here are so important in terms of the ageing population. one area that has gotten hit and really been in the cross hair of

the drug pricing problems has been the bio tech sector more so than the large cap pha ma down for the year. and really taking the big downturn in the fourth quarter a lot of these names have issues in addition to drug pricing. still up 229 percent year to date down 18%, but names lirks regeneron are in the rules >> take a look at the market 23.77. dow is down almost 370 points. back after a short break [leaf blower]

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close to 33. road map begins with a wall street whiplash. stocks selling off again this morning after over worries over washington >> president reiterates his disappointment in fed chair powell we'll discuss the implications for the market >> finally, the sectors to watch as we close out the year the play books you need for the buying opportunities in oil, airlines, retail, much more all coming up this hour. >> let's begin in washington following much unuchimnuchin's k ceos over the weekend. >> a senior treasury official says the call between munuchin and the ceos as well as the statement that came out, that was all intended to be a preemptive measure given the volatility we've seen in the past week and longer than that privately, i'm hearing the news about jay powell and that

president trump looked into firing the fed chair, that was one of the reasons, one of the catalysts for that phone call, but another reason was the government shutdown and the fact that we could be heading for a long and protracted time period in which the government is closed we are on day three of a shutdown now some 800,000 federal workers both here in washington and all across the country are now working without pay. about 25% of the government is affected and some of the agencies are the treasury department, commerce department, agriculture department late last night, president trump tweeted this as everyone knows, you can't have border security without a wall drones and technology are just bells and whistles safety for america guys, law mmakers will be b bac in washington on thursday, they're going to restart perhaps some of the negotiations

we will see how long it lasts before the government can reopen, but a lot of folks here in washington aren't anticipating the government to open again until the new year. back to you. >> thank you very much covering d.c. for us obviously such a huge part of the equation today joining us with r more, speaking of that, head of political analysis and managing director, terry haines is with us and kevin cory rell. good to have you with us so many uncertainties and so many of them involving policy. things markets tend to be shy about. is there anything, in terms of tactical buying, do you have to wait for a turn of the calendar here >> well, we need to see a turn in the data here, we review a lot of different things. with we look at prices, those are down sharply credit spread is up sharply. safe sectors are performing better than the higher beta

sectors. tl all kinds of indicators here that that are just showing more stress in the system that could manifest as caution in temperatures of how businesses plan their spending in the year ahead. it's only been a month or two. we can't make too much of this and multiples have become lower, so stock returns from here could be -- pointing in the wrong direction, we're not committed yet. >> data points and headlines what are you telling your client about the pros peblgts for powell this morning? >> well i've long said about jay powell is he's there he's there for you know, his term or as long as he wants to be there and the president's not going to do anything about that what's struck me about the criticism of powell, he can't and he knows it and he's

insulating himself from krit schiczy it's not my fault, it's that guy's fault over there the fundamental about the fed that everybody needs to understand is that it's independently executive branch, but it exercises congressionally derived power. congress will pitch a fit if he touched powell so he won't do it >> what's so hard about having a conversation that says look at retail sales, the strength of the consumer overall. this is classic late cycle chop and the fed is going to do what it's going to do how hard is it to have that conversation instead >> depends on who you are. i assume you're talking about the president. what he's doing right now in a number of different areas. is heightening controversies

some fights he's picking, some he's joining that has never been president trump's style. >> dow is down 350 do you have a problem with the secretary making those calls and going public with it over the weekend? >> swrjust a little unusual to public with that we haven't really seen that before but the way that that's been walked back has been more about this concept and really and the idea there's nothing really to be concerned about it can be read in one of two ways that there is something concerning or the reality is that he is just trying to maybe walk back some of the comments on powell and at the same time, make sure that if something does

get worse from here, looks like he's been out in front of it so hard to tell what it really means. >> what's with the falling oil it's fallen another 2% clearly, this is signalling growth concerns. it's falling at a time when the dollar is falling. >> emerging markets are still going to grow faster than the developing world we have to remember the markets control a rot lot of the demand side we've seen a big growth in credit there emerging markets have gone from 80 credit to gdp, 80% ratio ten years ago to well over 100% now. so that growth is clearly unsustainable and our best bet is that global growth deaccelerates next year. that probably has a lot to do with a higher data trade on the oil price. >> terry, i got two questions for you. one is does it feel like we can

reach a compromise on border funding at 2.5 building the way we saw some reports and two, how does the market process mattis if at all? >> firstly, yeah there's a compromise there to be had whether it is for some additional boarder funding or reprogramming of some existing funding, take iing funding. there's been a deal around the wall that's been around for a year and nobody's ever done it i doubt we're going to see that grand deal, but it's there number two, i think the markets ought to hold their fire a little bit on mattis and mcgirk. the way that the president has changed policy and changed out the leaders in his middle east strategy clearly spook a lot of people, number one but two, what they ought to do is understand that the

particular change in policy is something that was championed by a lot of people including you know, both serious conservatives and the serious progressives and liberals and the, this is again, not quite what it seems to be. >> kevin, dow's hugging 22,000 david up briefly moment ago. what if anything stops this? what reverses it where's the catalyst what could it be >> i guess it has to be b a combination of things. number one, valuation and price always matter. so when we think about where we are today, we think that the long run expected return for equities is higher why? because a year ago, markets were fairly ebb lent. multiples were hire and now you're looking at a pumultiple today on the sb that's at our below its ten-year average that's a healthy thing credit spreads are widening. there's more meat on the bone

for investors and wanting to take another look at credit. it has to be joined by some sense in slowdown, tloat least the momentum of these data points that could happen quickly. it could happen with the fed backing off some of their more aggressive rate tightening with a breakthrough on trade there are a lot of things that could happen that would turn this thing and if that were to happen, we'd have a good 2019. >> down another 2% on the s&p. these 2% moves are becoming the norm the s&p is now within half a percent of being in a bear market in a year where we reached a record high in october at what point does this waterboarding a self-fulfilling prophesy about the economy and outlook for recession? >> you're right at that point. so if it spills, if all this negative sentiment in the markets spill over into actual economy, so look at a business say who says we're taking our

key from the markets and we're going to cut back investment spending next year if you think about how a business wabts to borrow because investors aren't willing to lend that, that drags on then you start sort of this grind which leads into a recession we're not there yet. that's the earnings. >> target for next year. >> $160 or something for the s&p 500 would make sense >> yeah. terry, is the misunderstanding the fed or is the fed not communicating clearly enough you seem to have the williams walkback if you want to call it that from powell last wednesday. doing it right and i don't think? >> i think the fed needs to communicate a little bit better.

the criticism i had for a long time back from when i used to run the committee in the congress this oversaw the fed. the ways that in this market with this sort of skittishness, my two cents would be communicate much better with what you're doing and how. i think they think they've been very clear our own central bank strategy people have thought they've been clear, but they need to make a break i would say. >> terry, thank you guys appreciate it. a lot of good insight there on this christmas eve day thanks >> thank you >> no shortage of topics to try to figure out. up next, crude oil is down more than 25% for the year falling another 2% this morning. a former aramco executive will

join us. dow is down more than 350 points dow and s&p now 19%. off their recent highs n'go anywhere here on squawk on the street. ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ bad news for crude a new survey for the "wall street journal" says 13 banks lowering their oil forecast for 2019 to an avrnl of $69 a barrel

down from the $77 forecast just a month ago. with us now is the former saudi aramco vice president. sir, good to have you on this morning. >> thank you >> what is driving oil lower wti goes under 45 today. is it about supply or a combination of that and worries about the global economy >> well, i think negative sentiment in the financial market is spilling over into l oil. i don't think a lot has changed since the last month in the physical markets opec has made this commitment and moving forward it has to stage its cutbacks and they are significant the it will meet again in march and review the situation so they're moving ahead with their reductions probably another factor that's spooking the markets is the all the announcements of pipelines from the area, west texas to the

gulf coast several of those are coming on stream one just came on stream recently, 500,000 barrels of supply so as those materialize, they will add supply, but they are gradual. it's over the next several years. inlg some of the majors are m e moving in and exxon for example announcing its plans to triple its production over five years those are all contributing factors. but on the positive side, saudi arabia just announced its budget and it's a large and ambitious budget spending over $295 million so certainly a lot of confidence on this side of the ocean. >> interesting that sort of geo political concerns don't seem to be having an impact on the oil market you would think perhaps that some of the things that have gone on over the last couple of weeks, the president's announced

withdrawal from syria, no with standing that something would have put a bid under oil and nothing's really worked. >> well, we are a little bit puzzled as to what the new foreign policy is. i'm not involved in that, but there are negotiations going ahead in terms of yemen and the conflict in yemen, so that's kind of classifying things what's happened in syria is pretty remote from the oil industry, so i don't think that has an effect. we still need to know what mr. trump will do in regards to iran when the sanctions extension runs out in april and i guess that's anybody's guess >> yeah, i raise it only because maybe not of the direct correlation between pulling out of syria and having an impact on oil, but if you have any instability instituted into the area, you would think it could

have an impact on the crude market >> well, certainly if that situation deteriorate, it would have an impact. iran has cut back its supplies and that has beefed up prices at least a little bit, but we're also seeing instability in libya. they lost 300,000 barrels with the field shutting down. canada has announced 300,000 barrels cutback for the first quarter and russia is going to come ahead, go ahead with their own cutback, so all of those plus the geo politics as you were mentioning may well strengthen the prices quite a bit by the second half that might be the kind of unexpected turn around >> wondering how you're viewing the departure of secretary mountain tis and how that will shape the president's middle east policy from here and how the saudis for instance would view this? >> i think the u.s. military

presence in the gulf has not been effective that's what really matters syria is a tragic situation. i don't know that there's a clean cut solution at all. people talk about politic. about military u but i'm not sure that the 2000 troops that were there were really making a major effect on classifying region, but in any case, the us navy is here in the gulf the it's very secure, very stable and that sense, we don't, we haven't felt any repercussions with that change of administration. >> and finally, just curious how you think the saudis are viewing the sharp slide in oil right now. brent is at 53 in october, it was rallying toward 86. a four-year high and do you think this big slide is going to prompt action?

sx >> the slide is kind of a transition we are looking at significant additional wti additional also perhaps supplies from other regions the refining in the u.s. at this time may be starting to slow down in demand. china might be picking up the refining capacity there tends to get buzzier this time of the year so i think we're look iing at te longer term. i would guess that's what the people in the administration of the saudi government would be looking at the longer term and realizing that this time of the year is a low demand series. >> sir, it's been great talking to you today thank you so much. >> thank you >> take a look at the major averages now coming off the session lows,

dow's down 341 lost dow 22k take a look at the worst performers on the s&p and dow so far this session p and g, verizon and nike. much more still ahea d.

bob pisani on the floor with today's action and etfs that we should p b keeping a close eye on >> they're all down. these are the ones that you as an investor and index investor might be likely to own for the year what you see is there's no outperformance at all. spdr, the biggest around, 250 billion dl asset down vanguard, small mid cap large. is probably the biggest overall fund in the world. if you include an etf as well as the fund, probably 700 billion out there. it's down 11%, so doesn't matter small cap, mid cap europe, far east, this is the

developed world x united states and canada is down 18% the rest is doing is same thing. vwo. the next full screen, that's down about 18% then power shares. the nasdaq 100 that's down 21%. thought i'd throw in a bond fund this is the biggest bond etf a basket of treasuries as well as corporate etf if you look at the sector individual etf movers, most of energy group has been terrible down about 40% then you look at the home construction they topped out in january and the combination of higher rates and prices kind of did bend them so if you look at itv, that's

down 33, 34, 35% there sitting near the lows. the regional banks, that's kbe it was up and we had the jay powell comments and some of the political issues going on. sector is down about 25% you might think gosh, people must be fleeing etfs overall, they're still positive inflows this year. less than half of what it was last year, so nothing as big mutual funds are getting outflows, some of the money is going into etfs, but still, that little gold mine of money flowing into passive investments with the lower cost still going, just not at the rate we've seen it guys, back to you. >> let's get to frank. >> the death toll from the devastating tsunami that hit

indonesia on saturday rising to 373 with nearly 1500 people injured. 128 are missing. this as search and rescue efforts continue 500 buildings were sentenced to five years in prison he has denied any wrong doing. he was also fined $25 million. in israel, netanyahu agreeing to hold early elections on april 9th after the ruling coalition appeared to come up short on votes to pass a court ordered legislation. the latest polls predict another solid victory for netanyahu. and here in the u.s., santa's journey has become according to norad. if you'd tlik track their journey, you can watch it

www.noradsanta.org back to you. >> all right thank you. >> thank you >> when we return, we're going to take a deep dive into retail as we close out the year where the buying opportunities lie in 2019. a lot more "squawk on the street" still to come. wse dow down 312 points off the lo still losses across the board. we'll be right back.

welcome back live from post nine at the new york stock exchange. one hour into the trading session and it's red across the board. dow is down 300 points s&p down 29. nasdaq down 51 this on top of last week which was the worst week for stocks in ten years. the character of this sell off is interesting all 11 sectors down.

it's the defensive safe haven groups that are getting hammered the hardest. all 30 dow stocks are lower, but it's the winning ones lately like a p and g and nike that are getting hit the hardest. not getting much confidence from the treasury secretary despite his best efforts over the weekend. >> speaking of which, the secretary calling the ceos of the six major banks as the trump administration tries to assure markets that powell is safe despite the president's repeated critiques. steve is back at hq covering this and viewers have a will the of questions >> it hasn't been done outside of a sharp market move that came with serious concerns. market observers we said said

there's no so much concern in the market and most found is statement unwarranted. here's the christmas we got from washington the partial government shutdown. reports that trump was disgu discussing firing powell he also tweeted a quote saying he does not believe he has the authority to fire the fed chairman and then the treasury convening this capital markets group to discuss all of this the history of emergency market statement frs the government go back at least to 1987 and the market crash there when alan greenspan said the fed quote affirmed to date its re readness to serve as a source of liquidity. that was after one-day drop of 23% in the dow more than the dow has foulallen over a three month period.

fed if i recaofficials this mord no comment i guess one question i have is who's advising the treasury s secretary that told him is that who's advising him they're supposed to have people around him, consulting with the fed, with people in the markets. to say yeah, we need this statement now. >> bloomberg had a report citing four officials on background say thag the president is looking into that. it sounds like they think they don't have the ability or legal right to do it is that true >> what you're pointing out is the noegts they're not can

denying as far as i can tell, that the president was exploring this possibility right? as far as i read the denials and correct me if i'm wrong, i read them i thought carefully, that the deny pales are about the idea that the president has the right to do it or is considering doing it now, but the idea he considered it recently, i don't think they're denying those press reports which by the way, there were three that i counted, so i don't think there's any question about that. getting into the legal issue of whether or not the president could do that is a real maras right there. i don't think he has the possibility to dismiss the fed chair for raising interest rates. i think there's another issue worth talking about which is th this say pouille told the markets there was this removal of the perceived fed put. is mnuchin coming in there and

replacing with a treasury put? if it's his estimation needed, that's his call right there. the means by which he does that, it's unclear because as far as i can tell, the federal reserve is the only one with the means to come in and provide emergency liquidity. i suppose there are some funds out there, but typically, it would be done by the federal reserve either by cutting sbes rates or providing lending at the discount >> all right final ly, that does bring us to the interview with williams on friday steve and the very short rally we got subsequent to that. sarah brought up the turnover in voting members does the picture change to a large degree >> i don't think so. i'm sure sa rah is aware of this you've had dubs that have become hawk iish at the idea of the

requirement or need of the economy for emergency federal reserve interest rates has really faded to the background that's not really the sense right now of many on the federal reserve. guys like williams himself who was preimminent, pretty strong on the need for the fed to get to some form of annuity rachlt that's where the chairman is and the people around him the good news that i think the market ignores here is from the last statement and the last set of forecast, the fed is closer to being done than we thought on tuesday. and certainly than it has been in any other rate hike cycle before so we are at rates right now that were the bottom of previous cutting cycles and now we're sort of near the top if 2.8 is the central point of neutral, one or two from here and they're done >> that was my point i think the fed's going to be more flexible to your point. interview u with william >> i like that word. >> and to the new members who

have shown flexibility before. steve, thank you we got to go, but plus, trust me, good fodder for discussion going forwards >> i just got off the phone with david teper. the famed hedge fund manager and if you're kind of wondering at what level have things come down enough that people like mr. teper are willing to buy, this morning was one of those moments. he told me he has been nibbling at some stocks today that the market had a good move lower in his word, still a tough market got to be b careful about yourt exposure and he is obviously as well if you'll recall many months ago, he sat with us many pittsburgh and talked about taking his exposure down, but the market had a good move in morning, guys, lower at one point, the dow was u down 450. and he told me he was using that opportunity to nibble at some stocks not like he's buying

not like hand over fist or anything like that, but it was the kind of move lower where a guy like david tepper said this is maybe too much. and i'm going nibble in some of the areas of the market that i like and i have liked and now i've gotten them at this, what he i think is fair to say felt like it was a bit of an extreme move lower so that's the headline buying as the market hit that pocket there for a moment. low er this morning. >> yeah and the others, too. the dow is down b only 225 communication services just popped into the green in the s&p. there's been a bit of buying in facebook and alphabet, but starting to get green there as well look, we were down almost 20% from highs on the s&p and dow. dow briefly breaking the 22,000 level. sentiment has gotten bearish >> fair to say as well the

nibbling is much lower than now. it was from that point where we felt like at that point, you'll look up, say okay, the s&p is what did you say, half a percent. >> 19.5 down dow had hit down below what, it broke 22 thourk. >> s&p braer market would be 23 37 23.52. >> so at least one big well-known investor was using that pullback to nibble on some stocks take it for what it's worth. >> be greedy when others are fearful as warren buffett said turning to retail. it is the last day of the hol ta shopping season. and the last few days of a rough year for the sector. down about 15% for the year. the etf is high e right now rer now. joining us now with what the new year hold, oliver and charlie for an outlook on 2019

good morning to you. charlie, where should investors lo look >> you could look at almost any retailer when you look at walmart for instance, it's running on all cylinders. i don't know if i've seen them performing better that the 16 or 17 years i've covereded the company. the equity markets don't seem to realize that best buy is another one. target is making some serious ground costco is doing really well. this is a fundamental view all four of those are performing as well as i've seen perform >> so walmart, costco and best buy. give us three of yours >> yeah, we u like ulta, kohl's, tiffany and company. we think there are great brands that are available on sale retail stocks in this vi

environment. across shoppers, about 70% are using their mobile phones and 54% are using buy online, pick up if store. so both using online as well as stores as you know, a lot of the themes in retail are about merging physical and digital so we're seeing that han and are retailers are responding well and consumer environment is very stropg right n strong right now >> how much is riding on people feeling good about their tax returns? the concern has been apple and electronics. >> right i'll take the first part of the question the first question first i think the consumer still feels really good. we put a forecast out this year for the holiday that we have never done before. 5 to 6%. i think we're going to be there. we did that on the back of changing our retail outlook from 2019 to positive

still see iing positive tail winds. november numbers were solid. i think the consumers are spending i think we've seen the top end maybe a little soft because of the performance of the stock market, but for us, christmas has been a middle income and lower income driven holiday because it's a big deal to those families and they find a way to pull it off. >> even in sheer dollars the narrative is generally that the top incomers do a lion share of the spending. >> true. but during the holiday season, you see disproportion against the spending being done at the lower and middle income level. >> is the consumer in good shape? retail is kind of a microcosm for the market wea we're getting this decent economic news and the market is just tumbling and tumbling we're wondering, can it really last >> there are some cautions in terms of the high income stocks. as consumers colook at their 401(k) statements, that's something we're watching in terms of consumer confidence, but as we look at target and

wall mat, traffic has been strong retailers have done a good job in preparing for promotions, so these are caution points as we look to next year. other things to watch out for do include fx so that will be in focus as we look at guidance but overall, the consumer is in good shape an and confidence and low employment are things that are really helping in terms of getting people back in the stores, but the mall is in your pocket so store traffic is challenging as people really embrace the mobile phone retailers have done a better job b responding this year versus last year and the war for amazon is still on as well. on the apple question, best buy has tremendous vendor relationships. and that's one of the reasons the company has done as well as it has the store within a store with apple, samsung picking best buy as its u.s.

brick and mortar partner not that worry ied about the phenomenon right now l they'll find a way to work this out leets nforget, best buy has a terrific partnership with amazon then the new tvs that have come out. i think the vendor pressure is a little overblown with best buy >> apple has turned higher >> there are two stocks. there are two stocks we love kohl's they have a creative partnership and the athletic loser trend is a big deal the other beauty stock that's under the radar is ulta. personal care is a top item. for the younger consumer the retailer officil offers sers so buy about two to three points we would look at ulta, kohl's, we're positive on the consumer and what's happening in retail despite these points

>> you forgot the most important fact, which is that they have the kylie jenner line of cosmetics. >> good to see you >> thank you >> market obviously off session lows after scott just told us that david tepper say he's been nibbling on stocks today, but says we've never had a 1% decline on the s&p the last trading day before christmas we'll see if that end trremains in tact. back in a minutes.

happy holidays let's play a couple of question and answers. short answers, please. in your organization, have there been many talks about high

frequency trades >> yeah, there have, rick. >> let me keep going what about machines? a lot of talk about machines and volatility >> absolutely. they think that xas raexasperat. it was dpogood on the upside now when it's reflecting on the downside, they hate it so there's inconsistency >> another person who's brought these issues out is mnuchin. matter of fact, the 17th ranked of december. he was talk iing about clearing margin, market structure the big banks being 12 keepers high frequency machines. now the statement comes out. listen, it might be unusual. but it's not a topic that he shouldn't be concerned with, is it >> rick, what he's reflecting is the president's ped off. i think that's a reflection. so yeah, historically, the treasury secretary shouldn't be saying things like this, especially when there are no problems

let's say there's some sort soft liquidity. and the fact that many of big banks -- any fingers >> i think it would be pointed to this volatility i think the fed has done i think they don't, sort of reducing the balance sheet they're letting run off. >> now, you're organization along with many obviously mr. williams is sensitive to this as well who spoke with steve liesman last week. why do you think the balance sheet is a more important aspect of titaning on with some of the nervousness in the market. >> there have been eight fed governors that have said the same thing

unu wind of the balance sheet is fine when bernanke put it through, he said it would lead to higher equity prices, better credit spreads and a wealth effect. why is not the reverse of that not the exact reverse of the stame thing? i think the fed is redick louse to not realizing how much the balance sheet unwind is affecting the marketplace and i think they have to do something about it and i saw williams blink on friday in steve liesman's interview. that's going to what we're zpgon to see when powell speak ons january 4th about the economy. >> andy brener, thank you for joining me on this partial trading day. christmas eve and i hope you and your family have a happy holiday, merry christmas back to you. >> to you as well, rick. still to come, what to expect from the airlines in 2019. phil lebeau has a playback after t afterbook after the break. continuing recovery r for u.s. stocks we'll continue next.

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welcome back stocks are off their lows with the s&p 500 now down just .8

stocks lower including utilities and real estate. want to highlight the consumer discretionary sector it hit a low this morning, but off their lows the move follows another report of strong holiday sales, mastercard spending poll says total u.s. sales since november 1st are up more than 5% compared to last year some of the big is to bstocks o move are amazon, nike, ford among others, but it's worth pointing out even with today's lasses are still higher on the year including amazon, which is up double digit, as well as nike up about 13% now back down to you guys. >> all right, thank you so much. been an interesting year for airline stocks united up more than 20% while names like southwest and american are down more than 30, so where are the buying opportunities? phil has the 2019 playbook for

us >> 2019 will be a busy year nor airlines and that should be good news for investors ch fist, expect record passenger levels in fact, 2019 would be the first year more than a billion people board flights in the u.s that's due to a strong economy so many people are looking to fly. the bad news for travelers, airlines will push even higher fees it will cost more to check a bag, pick a seat or change a flight travelers may not like paying more for various options, but it's not prompting them to stop flying finally, look for new air lib technology facial recognition for ticketing and boarding will become more common at airport, while airlines are upgrades apps to

make changing plans more quicker and easier and airline profits should grow, making 2019 a year where airline stocks could be primed to fly higher >> we're just look iing at a twt from the president couple of moments ago. we were listening to phil's report it reads the only problem our economy has is the fed they don't have a feel market market, understand dollars or even democrat shutdowns over borders. the it's like a powerful golfer who can't score because he has no touch he can't putt. not sure what i could add to that >> a new way of characterizing it for the president we know he's been critical of the fed. the good thing for investors is he doesn't suggest firing him or anything like that just more criticism on lack of feel for the market. >> all right we'll watch that again, markets off the lows. dow's wndo 240 "squawk alley" starts in a few moments. don't go away.

. good morning 11:00 a.m. on wall street an and "squawk alley" is live