for "nightly business report," michelle caruso-cabrera, istanbul, turkey. >>> earlier we told you about boeing's weaker forecast for the year ahead despite wrapping up a record year for aircraft deliveries and orders. boeing was the biggest decliner in the dow today, falling more than 5% on that lower outlook. accounting for about a quarter of the dow's drop today. so why the stormy skies ahead for the aircraftmaker? phil lebeau has our report. >> reporter: after a 2013 that went from very bad to very good, investors in boeing are wondering if the aerospace giant is losing altitude. shares of boeing, which soared over the last 12 months, got clobbered when the company said 2014 earnings would come in 5 to 7% below analyst expectations. why the difference? boeing says its cash flow will be hit by greater taxes, a one-time signing bonus to members of the machinist union and other factors. boeing may be cautious about its earnings this year, but it's still expecting to deliver a record number of new planes. leading the way, the 737. by mid year boeing will crank out 42 per month. meanwhile

>> michelle caruso-cabrera reporting.. >>> another triple digit sell-off in the dow but there are big winners out there, if you look hard enough. we'll tell you, next. ♪ humans -- we are beautifully imperfect creatures, living in an imperfect world. that's why liberty mutual insurance has your back, offering exclusive products like optional better car replacement, where, if your car is totaled, we give you the money to buy one a model year newer. call... and ask an insurance expert about all our benefits today, like our 24/7 support and service, because at liberty mutual insurance, we believe our customers do their best out there in the world, so we do everything we can to be there for them when they need us. plus, you could save hundreds when you switch -- up to $423. call... today. liberty mutual insurance. responsibility. what's your policy? >>> well, dudes, the markets may be down big but take a look at that. that's half moon bay, california, where they are doing the maverick international surfing contest. these are b

michelle caruso-cabrera joins us from istanbul with more.ated story but a very important one today. >> reporter: yeah, absolutely, becky. so overnight, as you said, turkey raised interest rates. here in turkey it's not like in the united states where we wait for one announcement about one key interest rate. here they've got four or five depending on how you count them and what's more important at the moment. suffice it to say that all of them went up dramatically, anywhere from 3.5 to 5.25. think about that, a quarter of a point, an extraordinary moment, maybe the fed moves a half a point. so to move five full percentage points, a really, really huge move. we saw -- if you look at the one-week chart of the lira. we saw improvement. it's since fallen back. now this country is waiting to see what the federal reserve does. when you look at the one-month or one-year chart, even though we've seen stabilization in the lira, it's fallen dramatically over the last several months, actually down about 30% since may. we're also watching other currencie

let's go back to michelle caruso-cabrera, on the ground in istanbul. michelle?turkish lira is raising in the middle of the night. they raised their lending rates between 4% and 5%. huge hikes. many of the markets said they had to do at least 2.5%. to go to 4% and 5%, is beating expectations. and will probably widely please economists, outside of turkey. this happened despite the prime minister's wishes not to hike interest rates. there was intense political pressure to keep the status quo. but in light of the weakness and the currency, the central bank acted. we'll see if this calms other emerging markets. all of the countries where we've been watching sell-offs have their own individual issues. they often trade together as a single assess class. turkey could help other countries tomorrow. >> we want to see if the spike in the u.s. futures we were seeing in the after-hour session, will hold. the eem, etf, about 1.25%. we're holding here. what does that tell you about what we've seen, the reaction? >> if you're an markets investor you look and say, the underline

joining us is michelle caruso cabrera. she's on the phone in is tab bull. a nice place to go. michelle, good to see you. we have seen the lira. we saw immediately after that decision, the lira hit a new high of 218 after being at record lows. come off a little bit at the moment. .how much of a signal was this? also from the central bank about we are independent. >> huge on both counts, ross. first of all, clearly, most economists we spoke with were expecting 2.5%, but hoping for 4%. they got somewhere between 4% and 5%. this was definitely meant to be a signal to the market. also, of course, the prime minister of this country had been saying repeatedly that he did not want the central bank to raise interest rates. so for them to do so and do so so aggressively in the face of that, clearly, is an exhibiting -- or trying to prove their independence. at the same time, business owners here are watching to see and are very anxious to see whether or not the lira will stabilize at these levels. we spoke with several business owners this morning who said, look, higher or lower, we rm

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michelle caruso-cabrera is in san juan where it is 77 degrees this morning.y, next. [ tires screech ] [ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedes-benz dealer for 1.99% financing during our certified pre-owned sales event through february 28th. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. >>> welcome back, everybody. emerging markets are a major point of concern for investors right now. earlier today i caught up with the president of mexico, among the topics we disc

for "nightly business report," michelle caruso-cabrera, san juan, puerto rico. >>> still ahead, why this bone-chilling winter across much of the country could also be an expensive one. very expensive. >>> get ready to pay a lot more to heat your home this winter with much of the nation in the grips of another blast of arctic weather, the price of natural gas spiked to a multiyear high today. sharon epperson has more on how and why the bills will add up. >> reporter: with the extreme cold, this year's best performing commodity is bad news for consumers. more than half of u.s. households heat their home with natural gas. and as well below average temperatures are expected to last into february, prices for the heating fuel are skyrocketing. natural gas futures trading at the highest price in 3.5 years, surging 20% in a week. and cash prices in the northeast have hit new records. >> the market was unprepared for this level of cold. and really, we've seen big drops in inventories which is really what's driving prices higher. >> reporter: the recent price spike could trickle down to consumers

our michelle caruso-cabrera is on the ground live in turkey kelly, with the latest. >> wow. let's take a look at markets as we head into this final hour of trade. the dow poised to snap a five-day losing streak. it's adding 92 points at this hour. the nasdaq as mentioned, lagging a bit as apple comes under pressure. it's up 11 points to 4094 and the s&p 500 adding about 10. a decent performance this afternoon, 1792 is the level there. >> let's talk about these markets in our closing bell exchange. joining us kim forest jason pryde,ed to salamon and michael pinto and our own rick santelli. gentlemen, lady welcome to one and all. michael, let me begin with you. i know we'll have plenty of time to talk about the emerging markets and apple. let's talk a little bit about the fed and the likelihood that the fed will continue its taper even if it doesn't, it does seem likely that the federal reserve is going to pull back on its stimulus this year. do you think the markets and the economy can withstand that? >> well no i don't at all. portfolio strategy is now 90% cash. i will be sh

michelle caruso-cabrera on the ground in turkey. we do begin with stocks under pressure today as turkey and other overseas markets continues to make investors jittery. all this as bernanke's final fed decision comes this afternoon and earnings pour in here at home. we begin with our own michelle caru caruso-cabrera in turkey. this doesn't seem to be playing out the way they expected. >> no, certainly not. they were certainly some hope that the lira would finish the day higher and it initially rallied on the news last night, late last night, and then it's given back most of those gains. that being said, everyone here is as attuened to ben bernanke today as they were as the turkish central bank last night. they think today's announcement is just as important as that turkey did with interest rates because they feel they're very much beholdened not only with what's happening in turkey but also to the fed's tapering. >> steve, is there going to be a tapering of the taper? >> i believe not. taper? and i was ready to answer. >> how worried

i'm michelle caruso-cabrera along with steve liesman and scott wapner.e making their way to the world economic forum in davos. we'll have andrew liveris and ken rogoff in the 8:00 hour. >>> the ten-year yield, comfortably below 3%, 2.85%. slightly higher this morning but still, we've been puzzling over why it hasn't moved higher. here are your morning headlines. >>> travelers, the insurance company earned 2.68 per share, excluding certain items. that was well above estimates of $2.16 with revenue also above consensus. among the factors helping the results, stronger pricing and better retention levels in the company's business insurance unit. >>> ibm is reportedly in talks with lanovo. more talk about chinese purchases ever overseas assets. >>> new jersey governor chris christie remains embroiled in controversy. his administration is denying accusations that it held back superstorm sandy money from the city of hoboken pending approval of a politically connected development project. that comes shortly after the controversy over whether lane closures on the

and michelle caruso cabrera is going to stir things up again. i don't know, regiligion and business, i don't know if that misses well. >> she's bringing some yummy stuff. >>> welcome back into "squawk box." alex wallace with your national forecast. tracking wet weather, icy weather moving through the mid-atlantic. subfreezing with that moisture coming in. with that, freezing rain advisories. could be slippery this morning before things start to warm up. so take it slow. if you can delay getting out this morning, that might be your best bet. snow, wintry mix, a little rain around chicago. we'll keep that going into tonight. not blockbuster snow, the general swath of about 1 to 3 inches for us across the area. a few spots seeing about 3 to 5 for us. that's the wintry side. southern plains, showers and a few rumbles of thunder. that carries east through the overnight. it will be moving up the coast for tomorrow. get ready for a bit of a wet time here on our saturday up and down the east coast, through the interior, as well. we're stalling out, but

michelle caruso-cabrera, sara eisen are here to explain different facets of exactly what's going on and why everything is so interconnected and why everyone is so bloody nervous. we begin in china, michelle. we use this as the definition of the problem, problem number one, a wager -- major wealth management product that's a fast growing financial product in china that invests in things considered risky over there, like real estate, these wmps, i want to call them wimps, offer much higher yield and a major wmp is believed in danger of going bust this week. this reminds me, michelle, of auction rate securities in this country, circa '07. >> the reason this product may cause fears in the chinese banking systems, there are so many of these wmps and managers often don't know what's in them. they are often invested in questionable assets. if there is widespread belief among people in china that these products are no longer safe, do they end up having the equivalent of a subprime crisis, a run on the banks? that's the reason to be scared. there are two reasons not to be scared. china has tons

our correspondent michelle caruso-cabrera has traveled to puerto rico and is live in san juan. give us the details on what we know so far. >> hey, there, mandy. yeah, there's a huge debate right now in the market about whether or not it's a good time to buy puerto rico. the yields are very high because it's a very small island, 3.7 million people only, owe $70 billion. those are eye-watering numbers. listen to what kyle bass, who was on in october, told us what he thinks about puerto rican debt. >> you have $70 billion worth of listed municipal debt. you have 3.5 million people in a population decline. any puerto rican that has enough money to get out of the country does. you have a negative selection problem. you have a scenario in which their pensions are funded to the tune of only 9%. they owe $32 billion to the pensions. there is corporate debt on top of that. you look at their finances and say i have no clue how this can exist for very much longer. >> he didn't list all the problems, actually. on the other hand, there are people like james grant, author of the grant's inte

michelle caruso-cabrera is in istanbul on the ground there reporting on three themes this hour. first, turkey's central bank and the impact it could have on global fears. second, what turkish business people are saying. and who is turkey's president blaming for all this uproar? michelle, over to you. >> reporter: thank you, tyler. yeah, there's disappointment in this country today that the turkish lira did not hold on to the strong gains it made in the middle of the night when the central bank made those massive interest rate hikes in an effort to stabilize the currency. speaking with economists here, they think if the central bank had been less aggressive, perhaps the situation would have been even worse and it was a sign that they really needed to do something perhaps even more. the business community here is desperate for stability in the currency. we spent the morning with a couple of importers and exporters talking to them about the struggles that they face. we spoke with one gentleman who sells $150 million worth of air conditioning compressors every year, distributes them

our chief international correspondent, michelle caruso-cabrera, is live on the ground in istanbul coveringt big central bank meeting and will have all the breaking news headlines as soon as they cross after the closing bell today. it's a late night meeting there in istanbul. sue? >> a closely watched one that i know michelle will be covering for us like she always does, so beautifully. to sara eisen now at the floor of the nyse with me on what might be the next shoe to drop for the emerging markets. we are watching turkey but what else are you watching? >> watching the calm, the relative calm in emerging markets right now, but still, a number of risk factors to keep an eye out, to see if the calm will last. number one, central banks to the rescue. we have already seen this starting to play out overnight with india's central bank surprising markets, raising interest rates to fight the rising threat of inflation and currency weakness. in turkey, high hopes for a big rate increase there with that emerging central bank meeting happening at midnight local, 5:00 p.m. eastern time. so these moves

china rolling out new rules to try to contain some of the risks but michelle caruso-cabrera, are theydesperately needs reform. i would call them first you have to admit you have a problem. china has basically admitted it has a problem. two things they have done. first, they have come out with regulations related to their shadow banking system. remember they have fixed interest rates, they don't let market -- credit is not allocated by the market, it's allocated gby the government. as a result they have a lot of distortions there. they put out some regulations. they haven't been very transparent about it. reuters and ft managed to get copies. that's how we know about them. we're told that eventually that will be fixed. also, the other reform they announced -- reform too strong a word. local governments are going to be allowed to roll over debt. this is a big deal because we discovered last week local governments in china had increased their borrowing by 70% in three years to $3 trillion, 40% of that was supposed to roll over in the next year and they were prohibited from doing so. now

let's bring in our chief international correspondent, michelle caruso-cabrera. nothing is settled just because we're not tanking today. >> no. absolutely not. we are waiting to hear and see about some certain things. first of all, turkey. today they announced they would have an emergency meeting of the central bank. this is the central bank that just one week ago said that they weren't going to raise interest rates because -- they didn't say why, because there was an election coming up. then the currency got hammered. they have to do something. the expectation is they could raise interest rates between 2% and 4%. not a quarter of a percent. 2% to 4%. that would be a huge increase. >> to 10% plus. >> right now it's 9.75%. so yeah. >> they are trying to defend their currency. >> absolutely. if you are a riskier place, and it's risky there, you wouldn't want investors to leave. >> isn't there a risk in having an emergency central bank meeting? everything's fine, we're holding an emergency meeting, but everything is fine. >> this may be the signal they are willing t

. >> i know someone standing right over there who would make that counter argument, michelle caruso-cabrera. she will join us in a moment. that's a whole other debate. but you will take us down a little deeper and look at individual names. >> sara mentioned the rbc capital markets. >> no relation to seema. >> may be some kind of distant capacity. check this out. nick mody says the biggest beneficiary in the increase in low income income is their top tobacco pick, lorillard, america's biggest maker of menthol cigarettes. he says they generate a meaningful portion of sales and profit from new york and california, where tobacco consumption is highest and they are getting that increase in minimum wage. other ways to look at increase in income is the trade-up effect, the substitution effect. consumers get more cash and spend it on relatively higher priced premium products. mark schwartzman has mentioned this in the past with traditional carbonated sodas or juice to water products, often coca cola or pepsi already have products people would trade up to, like going from diet pepsi to trop 50. you

michelle caruso-cabrera joins us now. >> happy birthday, becky. cnbc 25. i almost wore a hat.verybody. the current top five economies in the world, the united states, china, japan, germany, france still managing to hang in there. we asked pricewaterhousecoopers to do protections for 2039. they think this list will look substantially different 25 years from now. in 25 years, germany and france will be gone from the top five. replaced by india and brazil. the u.s. will no longer be first. according to pricewaterhousecoopers, the world's largest economy will be china at $34 trillion. quadrupling from its current level of 8.3 trillion. however, the u.s. won't be far behind at 29 trillion, nearly double the current level of roughly 1 trillion. india will be third, japan will fall from third to fourth and brazil will come in at fifth. even though the u.s. will fall behind china, in terms of gdp per capita, the u.s. will be way ahead of china at $72,000 versus $24,000. when it comes to world population, india with 1.6 billion people by then will overtake china which will barely budge

cnbc's chief international correspondent michelle caruso cabrera is live in istanbul with more on thel us? >> reporter: hi there, sara, and yeah, there appears to be jawboning by two different groups today which has at least stabilized the lira, and we did see an intrasession turnaround in the turkish stock market. the session is split in two. during the break a couple of thins happened. finance minister held a news conference and said on the report what had only been said previously anonymously by we don't know who that turkey is not considering capital controls at this point and then we also got the central bank minutes from the emergency meeting in which they announced the massive rate hike and they were very strong in the minutes. take a look at what they said. the central bank will not tolerate any deterioration in price stability. to this end the committee assessed an order deterioration in expectation inflation and overall pricing. it would be appropriate to deliver a strong and front-loaded monetary tightening and here's what's important. even more important, if deemed necessa

michelle caruso cabrera is live in istanbul. she's on the phone with us with the latest.ove by a stunning bank. what's been the reaction and fallout? >> huge moves. i mean, three and four and five percentage points full on depending on which interest rate you're talking about. let's show you what's going on with the lira, at first it rallied dramatically but the two-day chart shows all the gains have been given up. it may be nervousness ahead of what we expect from ben bernanke and the federal reserve in the united states because the currency has acted so closely in relation to what's happening in the u.s. will the move by the turkish central bank the shock and awe attempt at interest rates. is it going to work? there's a lot of questions there and we answer it with even more questions. has the central bank convinced the markets. has the central bank convinced the market it's willing to hike even more if it needs to and will it push short-term speculators to finally move on. every time a central bank raises an interest rate it gets a lot more expensive to borrow the curre

thank you very much, michelle caruso cabrera on the el erian business. >>> cnbc is putting together a'll talk about the game changers from mark zuckerberg to marissa mayer, who do you think should be on top of the list when "squawk on the street" continues. the dow currently down some 30 points. ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. with the mobile trader app. that it's given me time toabout reflect on some of life'seen biggest questions. like, if you could save hundreds on car insurance by making one simple call, why wouldn't you make that call? see, the only thing i can think of is that you can't get any... bars. ah, that's better. it's a beautiful view. i wonder if i can see mt

michelle caruso-cabrera is back at headquarters with more details. >> two countries of the corner stoneweek. the turkish leer recovering a little bit today. remember when you look at these currency charts they're a little counterintuitive. you're looking at a chart of a dollar versus leer. you can see the dollar getting stronger and stronger and then peaking early this morning. switch to the two-day chart to explain what happens next. like i said the dollar peaks, the leer bottoms early this morning. as soon as turkey's central bank announces they're going to hold an emergency meeting tomorrow and they will announce the outcome of that meeting at midnight in turkey. why? because that's 5:00 p.m. in new york after the u.s. market closes. put that on your pile under tomorrow 5:00 p.m. eastern time. the reason the currency is strengthening now because of that announcement, it's assumed they're going to announce a hike in interest rates, a big one. anywhere from 2.5%, some economists hazarding the possibility of a 4.25% hike from current rates of 7.75%. overnight anywhere between 10% and 12

cnbc's national correspondent michelle-caruso cabrera is joining us on the phone in turkey. a way from the announcement on the central bank. if you had any doubt how much pressure the head of the central bank is under, politically here in turkey, i want you to look at the front page of one of the newspapers that supports the prime minister here. there is a photo of the head of the central bank tantd head says, don't pike, stand firm. we have 5 1/2 hours away from announcement by the strashl bank where we think they are going to do the opposite. they're going to raise interest rates twibetween 2% and 5%. it's important to understand though that in turkey central banking is political. there are several interest rates set by this turkish central bank. someone political. one is actual. there is a printed level corridor for interstates here in turkey but no one pays that. actually there's a much higher rate that they set for extraordinary days. and that's the number that if you're a primary dealer or you want to try to buy money from the central bank, that's the rate that you hav

i'm michelle caruso cabrera along with steve liesman and scott wapner.way to davos, switzerland. andrew is there already. we'll be talking to dow clem kal ceo andre liveris and ken rogoff at 8:40 a.m. also a huge chess player. making headlines, earnings season is in full swing plunge the names reporting before the bell today, johnson & jounsan, travelers and verizon. after the bell, we'll hear from ibm and texas instruments. roughly 50% of s&p companies have reported, roughly 50% have missed estimates. u.s. equity futures this morning are suggesting that we are going to have a positive open. the dow would open higher by about 57 points. the s&p by 6. the nasdaq by nearly 16. scott. >> michelle, thanks. in corporate news, two people have been nabbed at the texas border in a credit card fraud

michelle caruso cabrera is there in istanbul. our chief international correspondent. u have to get your head around what's happened, michelle. what are people now predicting after this massive interest rate hike? what is the impact going to be on growth? >> well, as we heard from the treasury secretary yesterday when he talked to cnbc turkey, he says it's too early to say it's going to hurt growth, but everyone here expects that it is going to hurt growth. tensions here are actually quite high, ross. as you mentioned, the lira continue to go weaken. the stock market getting hit here again very, very hard. and we just came from a meeting with the group of small and medium sized business men who are very angry about the rate hike. the president of the organization said if your foot hurts and then they kick you in the foot, you are going to scream. they think the rate hikes shouldn't have occurred. they think it's hurting their businesses. the prime minister of the country, while he was on the plane late yesterday told reporters that he has a plan d and a plan c. he didn'

importantly joining us from turkey, arguably the eye of the storm so far this week, is our very own michelle caruso-cabreramichelle, important moves, of course, overnight from turkey's central bank. what has been the fallout locally from what you can tell us now? >> well, there's disappointment here that the currency didn't react more positively. when the announcement came almost 24 hours ago, it was a huge, massive hike in interest rates, a lot more than most people expected. we saw the currency improve dramatically, and by the way, u.s. stock futures also improve pretty sharply on that news when the central bank did a lot more than what people were looking for. but the pull back in the currency has disappointed some here. i spoke with one economist who said, wow, if they hadn't gone this big, what if they had gone small? it could have been even worse today. it highlighted the tough situation that turkey is in right now. >> ken, how much control does turkey's central bank really have over this situation and the same for other emerging markets? you cannot fight the fed, can you? >> i don't think this is ju

joining us is larry mcdonaldcdonald, doug lockridge and also with us is our own michelle caruso-cabrera. michelle, put it in perspective. what's the possible threat of default? how real is it? >> the possible threat of default, it really depends on issuance to issuance. puerto rico has so many different flavors of bonds and you really don't know if there's a restructuring how it's going to play out. i would say though if you hold a u.s. muni bond fund here in the united states, you probably have exposure to debt from puerto rico and here is why. here are the numbers from morningstar. of all the municipal bond funds in the u.s. 69% hold at least some exposure to puerto rico. that number is down from several months ago. used to be 75%. why is that? because there's a triple exemption from puerto rico. you don't pay federal, you don't pay local, you don't pay state tax on revenue you get from a puerto rico bond no matter where you live in the united states. so if it's yielding 8% wow, you'd have to get 12% in something that's taxed to get the same kind of return. so a lot of funds have boug

. >> michelle caruso-cabrera joins us to break down what's going on, michelle and why your investments wound up in the crosshairs. >> the emerging markets slightly calmer today though it took an early morning announcement of an emergency meeting by the turkish central bank to calm things down. it's expected that the tishgishurkish central bank will announce a hike in interest rates. we could do country to country with loss specifically issues. what is true in general about all of them is the following. they lived as if commodity prices would rise forever and that interest rates would stay low forever. now with the fears of a china slowdown you were talking about it last block, commodity prices won't necessarily stay high. with the u.s. economy improving, the fed tapering interest rates may not stay low. another key thing to watch, china, its banking system you were also talking about that. there's a fear that a big financial product is likely to go bust late they are week when it matured on friday and could that have a wider ripple effect and lead to some kind of banking crisis in the

cnbc chief international correspondent michelle caruso cabrera is in inis istanbul. what's changed? >> reporter: well, you know, we are wrapping up four days of intense drama, not just for turkey but for the emerging markets all over the world, as you point out. what's changed? let's tell you what we believe to be true right now, at least at this moment. that the turkish lira has stabilized and the turkish stock market turned around sharply today because of more strong movements from the ministry. there will not be capital controls imposed in turkey. that seemed to help the markets. then we got the minutes from the central bank meeting. the same meeting that was held earlier this week in the middle of the night. the emergency meeting where they raised interest rates so sharply and the tone of those minutes was extremely hawkish. the central bank said, we are willing to impose a recession on this country in order to scare away the speculators and make it clear to everybody that we will not tolerate inflation. they didn't say explicitly we will bring on a recession. they said we are w

joining me now, michelle caruso-cabrera, mike santoli, and chris johnson from the jk investment groupket as well, "fast money" contributor brian kelly. thank you so much for being here. michael, what did we learn today? >> i think we came into the year with pent-up selling. we couldn't get any real, forceful buying. it reminds me a little bit of the beginning of december when everyone came in saying a seasonal slam dunk, we're always up in december when you're up for the year. i feel like we have to just adjust. right now, nothing too alarming to be honest. just a sideways slog. >> a sideways slog. gary, what do you think? brian, i'm sorry. brian, brian, brian. what do you think? >> i think the market is really trying to reprice what's going on here. we came in saying we were all greedy about how good the economy is going to be this things are looking much better. now that things are looking more fearful, it could be stronger than expected, which means a faster pace of taper. look what's going on in the emerging markets. brazil just got absolutely crushed. china has been down. people

and michelle caruso-cabrera who is live from puerto rico which has issues of its own that it's dealingth. larry, first to you, which is the tail and which is the dog. are emerging markets getting hammered because of the u.s. or is the u.s. struggling because of what's happening in emerging markets? >> one of the things we were talking to clients earlier in the week about leading indicators, and you're not going to believe this, but if you track the five-year credit default swaps of hsbc versus jpmorgan earlier this week they went wider for first time in a long time. for most of the last five years, jpmorgan has been a much much better credit but in the last couple days hsbc's weakening substantially. that's a really good warning sign. i think it tells you the epicenter of risk in 2007-'08 was the united states? then to europe and now to asia. >> if we can't lump all these emerging markets together are can we is it now approaching the lel of being some kind of macro event? >> i think it's a little different. i would look at china. i have been talking and tweeting about this shadow bank

joining me now, cnbc's own john ford and michelle caruso-cabrera and cnbc contributor john.tion, brian kelly. a great group. thank you so much to all of you for being here. dr. jay, what's jumping out to you about today's mark? >> well, i certainly thought that starting off with such a horrible number, kelly, from best buy and then followed up with the citigroup numbers today, which weren't as bad, nearly as bad, of course, as best buy, but nonetheless that put the market on its heels. a lot of folks decided it was enough even to push goldman, which was up about a buck at the time to make them roll over as well. i think people just took advantage of that, of the weakness, the relative weakness and hammered almost everything in that space. >> goldman finishing down almost 2%. just shy of those levels. citigroup off better than 4% on another earnings disappointment perhaps because of a lot of bullishness. jp seemed to kick things off. how does the performance of this sector matter for people who are long markets here? >> we really, really like financials at these levels, espec

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. >>> michelle caruso-cabrera jones us now from istanbul with the latest. michelle? we're waiting to see what the prime minister's extraordinary plan might be, if anything. he said there would be a plan b or a plan c if the massive interest rate hike didn't work to defend the currency. let's show you the one-week chart of the turkish lira. even though it hasn't gone back to the lows we saw early in the week that prompted the central bank to act, it still isn't acting as well as many businesses here wanted it to act in the wake of the interest rate hike. that's what prompted the questions to the government officials with whether or not there's a possibility of capital controls, saying you know what, we're not going to let dollars lead the country. that would be the capital control we're talking about. the stock market continues to get hammered. we'll see how the close goes as we approach the end of business here today in turkey. it's about 3:15 in the afternoon. we spent a good chunk of the morning speaking with local business owners who are just beside themselves and

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cnbc's international correspondent michelle caruso cabrera is life in san juan. 77 degrees. it's so hot here, david. but i digress. thanks for the introduction. let me introduce the two guests here who are trying to deal with the debt crisis in puerto rico. david chafee is the chairman of the puerto rico government development bank and melva costa is the treasury secretary of the island. you are under pressure from the ratings agencies. they are concerned that you are using a lot of short-term financing eating up a lot of cash within even though you have a lot of debt, they want you to borrow more, moody's wants you to do long-term financing in january. there's only five days left. are you going to be able to do that and do you want to do that? >> we're preparing ourselves to go to the market, it will be soon, the next month. and we are -- we have been preparing since day one of this new schedule. we've been working with all the financial backers that puerto rico is facing. and this is part of the preparation to go to the market. you have covered well that, you know, everyth

right now let's go, though, to cnbc's michelle caruso-cabrera. >> up from a year ago.d relentlessly from all the regulators, every quadrant of the planet in the universe. >> they keep coming and keep coming. >> they keep coming. >> when areer when are they going to stop? >> they would all like to know as well. jamie dimon said they're making progress. it's trading positively this morning. not super high but in the green. which would suggest they like the tonality on the conference call so far today. >> michelle, thank you. i've been getting these alerts, jp morgan agrees to fines. >> it's $20 billion so far this year. >> unbelievable. >> quarter's worth of revenue gone, taken away from the shareholders. yeah. >> thank you so much, michelle. >>> best in late night coming up next. when i first started shopping for a hybrid... i didn't even look at anything else. i just assumed you went and bought a prius. so this time around we were able to do some research and we ended up getting a ford... which we love. it's been a wonderful switch. it has everything that you could wan

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our chief international correspondent michelle caruso cabrera playing the long game today looking atard, we wanted to look forward. what is cnbc covering 25 years from now. clearly china. china is widely expected to be the largest economy in 2039. according to pricewaterhouse coopers, they ran projections for us they believe the gdp will be $34 trillion roughly four times what it is now. with that massive growth comes massive energy increases as well in terms of consumption. by 2040, china will consume more than twice as much energy as the u.s. coal will still be their leading source of energy supply, but by 2040, china will consume more oil than the u.s. keep in mind, though, china is still an enormously poor country when you account for the massive 1.3 billion person population, so their gdp per capita will still be far behind the united states according to pricewaterhouse coopers. in 2039 they say the gdp per capital will be $24,000 that's versus the u.s. coming in at $72,000. this is a good reminder despite all of the growth we talk about in china there are still 600 million peop

. >>> now, we've got breaking news, i believe michelle caruso cabrera joining us from headquarters. >ddressing reporters making the first comments about all ledged affair reported by celebrity magazines last week in france. he held a very long news conference, 50 minutes where he talked about the any but the very first question from reporters was, is valerie trayweller, his long time companion, living in the palace with him, is she still the first lady of france? his response was, each individual in his private life goes through difficult periods, but private matters should remain private. this is neither the time nor the place to answer these questions, but he then went on to promise that he would clarify the status of his partner before his planned visit to washington, d.c. in february. once again, french president hollande making a comment. we're showing the video of the celebrity actress that he was spotted with going into her home or into an apartment in the middle of the night, julie gia, footage of photos in magazines also week. this is dominated what was supposed to be a confe

michelle's piece? >> which one? >> caruso cabrera that she did for us on tuesday.t was the lead story in the daily news yesterday. >> oh, on the pope. yes. front page. and the new york post talked about it. becky, i don't know if you -- >> i saw the story, actually, yes. >> but what they failed to -- the only comments that they quoted the pope on, andrew, were not the one that we read here, which go into a criticism of free market -- >> oh, you know, the daily mix made it sound ridiculous. they're talking about saying almost they're pushing socialism as a means to an end to make a more fair world. i don't want to weight in on whether the pope is infallible or not. but the whole infallible question tore me says -- >> it's different than when he says he's speaking with infallibility. >> i know that. but in this case, he's not infallible, because he's dead wrong on what he said about the free markets. >> new year's resolution. >> is deblasio catholic? >> i don't know. and i'm treading into an area that i don't know. by the bible -- did you see that? >> yes. >> where i