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tv   Squawk on the Street  CNBC  January 7, 2015 9:00am-11:01am EST

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place. >> my ts are my ds. >> maybe i'll get -- >> we do things differently in new york. we're going to get used to it. that does it for us today. we'll see you back here again tomorrow. right now it's time for "squawk on the street." ♪ >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with davidjim cramer, david faber. a rebound of sorts as the premarket is higher. we're keeping our eye on this attack. apparently two gunmen in france attacking a satirical magazine. the latest death count is 12. oil's in the green after closing yesterday at 47.93. we're up to 48.38. ten-year yield climbing just a bit. still below two, right around
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1.97. our road map begins with a rally in the markets. coming off a volatile day. futures in the green. adp numbers higher than expected as well. >> jcpenney is feeling the holiday cheer. the stock is up nearly 20% in the premarket. bill ackman is still unimpressed. >> the shooting at a paris office of a satirical magazine has left 12 dead. we'll continue to bring you developments on that. first up, futures up sharply as the s&p and nasdaq look to snap five-day losing st the s&p is in the midst of its second worst three-day losing streak to start the year since at least 1950. oil prices also higher after brent fell below $50 for the first time. ahead of the friday jobs number, adp 241. not bad as they've realized december higher. i don't know. blankfein on "squawk" today.
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>> i thought the adp was interesting. looks like the firings in the oil patch are either not impacting or they're just not as great as we thought. i also felt that when i looked at the difficulterent earnings we got, we got some good ones. not what necessarily people expected. i do want to see the oil numbers. i want to see the inventories. there's a lot of factors. there's no place to put the oil, but we got some interesting spending numbers last night. rbm, which is the outfit i use that does the absolute best oil stuff, they're not cutting back on the infrastructure spend. they're just cutting back on the drilling budget. i don't know. i mean we had a continuation of a rally that started yesterday afternoon. i typically don't like up openings, but we were rallying yesterday. there's a nice follow through. >> do you think that we start to not worry as much about the macro as we start -- well we're not that far from earnings
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season. we're getting some numbers. jcpenney perhaps others will follow with what may have been a better than anticipated holiday season for brick and mortar. we'll see. expectations for jcp were not that high so not hard to beat them. >> you're talking about the average household is getting a huge $1,000 windfall. think about it. where does that come from? it doesn't come from government. it doesn't come from a tax cut. doesn't come from the government borrowing more. one-third of it comes from opec. they're writing a check to us. that's not so bad. another third comes from companies. >> trade deficit numbers today, right? narrower again. >> if we can get $1,000 -- well it's going to be about $200 from saudi arabia a rebate. isn't that nice? do you mind? >> take one every time. >> how about -- we mentioned black fine this morning on "squawk." lloyd's point is you're knee
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jerk to assume the oil collapse is supply driven. >> well the deflationary numbers we got out of europe are eye opening. by the way, you remember draghi would tell you it's illegal for the ecb to allow this to happen which puts more pressure on quantitative easing. bad news over there is now considered good news. i think the 770 million people in europe are not really using more gasoline. they've got a different structure over there. flows right to our country. we had a 1% pickup in gasoline use when oil first went down $20. yukon sales were up 30% when you saw that number the other day. those are so-called gas guzzlers. the supply that's coming from the gulf of mexico at the beginning of next month, it's amazing. they're all coming on. >> so, what we're going to see wti break 45? >> 300, 000, 400,000 barrels per
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day coming on. >> if we see oil prices go lower, it would see the impact on the market has not been a positive one. >> that's been wrong. that's also been the way it's been sometimes. jpmorgan did a lot of work on this saying it could produce a 0.4% increase in gdp if things go right and people are misinterpreting. the only ones where we've had a declining market were when it was demand driven. those who put out the demand-driven thesis are bears. i think it's supply. i think it's u.s. don't forget, 2 million barrels per day from nigeria. no place to go with that. venezuela has no place to put theirs because we're producing so much more. you're going to see permean produce another 300,000 more. >> there are outlier predictions for $14 oil. you don't sound like you think that's possible. >> $14? >> $14? i did see that somewhere, yeah. >> we did go from 140 to 40.
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oil is very volatile. $14 would -- >> that would be trouble. >> that would be. then everybody goes bust. >> that's run for the hills. >> what about the commodity complex? what about copper? >> the freight index. >> what about iron ore and so many of these other commodities that are at new lows. >> china. >> that's a demand. >> demands don't reflect europe. europe is in big trouble. yet, germany is still talking about the balance, the need for a balanced budget. where did we hear that? where did we hear that in this country? 1931. >> hoover. hoover in a pantsuit. >> qe is coming. it's coming right? >> well, if he doesn't do something in that january meeting, we're all in trouble. i want to point out again the math. $1,000 rebate. the average household spent $2,912 on gasoline in 2012. that's a good compare. that was 4% of household
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disposable income. imagine what this means to have -- i mean unfortunately a lot of people come on air, they're so rich they don't see $1,000. >> i think our audience understands that. what you're saying is the ecb meeting and the greek election the lot is riding on those two outcomes. >> people don't understand it, but this is -- you know, you've got these international -- look at caterpillar, general electric yesterday. caterpillar totally turned around. anybody who lays off, you feel terrible about it but this is mostly a mexican -- that market was taken over by mexico. that and one oil company went bust. so far not so bad. >> some of my friends in texas argue those companies tend not to do layoffs during the holiday season, let's say. you might wait until january, the first few weeks of a new year. >> there will be thousands of jobs lost. only 1% of the job growth that
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we have had in the last four years came from the oil patch. i know that sounds small. but if you do government spending, have private sector -- look, adp should have been down big. the christmas thing, that could matter. but i'm looking overall. the companies are pumping in order to meet cash flow. they are going to cut their drilling. the average shale well depletes much faster than a gulf of mexico well. 15% a year. so 18 months from now, you're going to start seeing upward. i don't know if we go to 14. if we get a really bad inventory number, it's going to go down. >> meantime we have at least 12 dead in a shooting at the paris offices of a french satirical magazine. as a result, france raising its anti-terrorism alert in the paris area to its highest level. >> reporter: good morning to you. highest level means extra police and military in public places
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and public transport. also extra police protection for all the newspaper, television, and radio stations in the french capital. last but not least, all the extra school activities have been canceled in france until further notice after what seems to be a terrorist attack. this is how the french president called this event ahead of a security meeting early in the afternoon here in the french capital. according to the prosecutor's office, two gunmen at least, opened fire this morning at the headquarter of the satirical magazine "charlie hedbo." 12 people have been killed. three people are still in critical condition. that's the last element that was given. just to tell you a what the magazine is, it's not a mainstream newspaper. it's a very satirical newspaper. plenty of potential enemies. three, four weeks ago in 2011
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the headquarter of the magazine was fire bombed after the magazine published some cartoon joking about muslim leaders. just ahead of the attack this morning, they published a cartoon of the islamic state militant group leader. of course, it's too early to draw conclusions about who or what organization could be behind this attack. according to intelligence sources, there is no evidence that this attack is linked to islamist state. this is all we now for now. but of course we will probably receive plenty of information from the prosecutor's office in the next coming hours. so bear with us and i'll get you back shortly. >> thank you for that. our thoughts obviously with you there in france. word also that hollande will address the nation at 8:00 p.m. local time. >> i think the only thing that will get germany moving is a right-wing movement that they're fearful of. the national front is going to pick up a huge amount of votes in france. that is who germany is fearful
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of. that's who merkle fears. they don't fear deflation. they fear political unrest. and this action which is horrendous, is going to boost the national front. believe me that's what's going to wake up merkle. >> wouldn't mind bouncing that off our chief international correspondent, michelle caruso-cabrera, who has been covering this news all morning. >> we've just received a statement from president obama concerning the situation in paris. i strongly condemn the horrific shooting at the offices of at "charlie hebdo" magazine. france is america's oldest ally and has stood shoulder to shoulder with the united states in the fight against terrorists who threaten our shared security and the world. the prth does bring up a good point. the french are our oldest allies. actually helped us fight the british during the american revolution. once again a statement from the
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white house. president obama condemning the attacks, just as we have heard from many leaders around the world, including the prime minister of the united kingdom and the leader of germany. that's the latest we have from the u.s. we should also point out that we've spoken with u.s. security officials who have been speaking with french security officials. it's two, possibly three, gunmen that opened fire. it's not confirmed they escaped in a car, but they're definitely at large. there are local reports in france that the men were carrying some kind of rocket launcher. they said that's unconfirmed, but it does possibly appear they were carrying punch-action shotguns and kalashnikovs or ak-47s as they're frequently called. >> we're be on the lookout for more details. michelle, we'll come back to you later. when we come back jcpenney getting a boost from its holiday sales numbers. bill ackman on "squawk" this morning with harsh words about
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the company's future. then ceo dick costolo at twitter selling off shares. why was it on the upside yesterday? market up 142 on the dow. more on "squawk on the street" from post nine in just a minute.
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it was a happy holiday season for jcpenney.
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shares of the retailer up sharply in the premarket after it reported same-store sales up 3 3.7 in the november/december period. although, ackman this morning on "squawk" saying i want them to be successful, but they're in a very tough position. >> no comment about him. i think the team is doing a great job. better than i thought. some of it's gasoline. but you know what a win is a win. you don't say, hey, listen put an asterisk because it's gasoline. this company had been losing share. it's obviously that they're spending some money now. they have a good omni channel because they have so many different stores. i think we forget jcpenney is a nationwide retailer. i go to the jcpenney in midtown here where the prices are really kind of extraordinary. you get some great bargains. >> still looking for trousers, are you? >> i got some black levi pants there. it was like two for one. like buy one get one.
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i'm talking about cheaper than costco. >> the compares for them are relatively easy. >> yes, but at the same time, remember -- >> but it's up. up is up. >> pvh was a downgrade yesterday. they're a partner of jcpenney. i'm not recommending them. i'm saying that if you look at who's in jcpenney it's in peril. they're trying to unwind some of the things that ackman -- notice i'm not saying that guy's name anymore. i'm not going to mention his name. >> he takes it personally? or ackman takes it personally? >> everyone takes things personally. except for mike ullman. >> you mentioned the downgrade of pvh yesterday. but at the same time citi upped under armour. >> that's more of a dick's story. i think that vp corp. pushed
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hard yesterday. vf corp. is having a great winter. i just think that this was an impressive quarter. there is going to be a squeeze. but most importantly, if jcpenney is doing well what is macy's going to put up? there's a buy on nordstrom. >> brings to mind that story in the "times" this past weekend about dead malls and the website dead deadmalls.com where you can literally look at the number of malls that are 5% 10%, 40% vacancy rates. >> the point of that story and what we've seen is the middle market which has been typically anchored i did a sears or jcpenney has not fared particularly well when it comes to these malls. >> loser take none.
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>> restoration hardware doing incredible. they buy a lot of stuff from italy. wouldn't you love j. crew right here? >> they did not have the best quarter. >> they have easy compares. >> it has been a little tougher sledding lately. >> it maybehas been. >> meantime, a number of twitter executives are selling shares lately. twitter stock taking a leg higher on speculation over m&a. facebook out with numbers for its whatsapp acquisition. the twitter story is interesting. ross levin sonson on the half yesterday suggests a tie-up. >> then rob pack who's my favorite from sun trust, totally runs with it and gives you why it could happen. rob told you to buy it on the underwriting then told you to
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sell it in the 70s, then buy it back down here. i got no problem. >> meantime, they keep selling stock. i think he exercised over 400,000 shares. >> it would be really interesting to see him short his own stock. no, he has a ton of stock. >> he has a ltd.ot of stock, but he does keep selling, which is perfectly his right. there was also some rumor icahn is in the stock. i have no idea if that's true. i haven't been able to disprove it, but i'm doubtful. let's leave it at that. >> dick costolo, i kind of feel like the jcpenney it's getting touchy. i don't want to get personal. when i say he should go and a new ceo will come in it's not personal. it's just business. >> although, some directors are starting to come to his defense with blog posts saying they're committed to his tenure that
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kind of thing. >> oh are they? good. >> when we come back we'll get cramer's mad dash and count down to the opening bell. one more look at the futures. not bad. if the month ended today, it would be the s&p's worst month since last january. we'll see what happens. "squawk on the street" is back in a minute. ♪ ♪ first impressions are important. you've got to make every second count. banking designed for the way you live your life. so you can welcome your family home... for the first time. chase. so you can. ugh... ...heartburn. did someone say burn? try alka seltzer reliefchews. they work just as fast and taste better than tums smoothies assorted fruit. mmm... amazing. yeah, i get that a lot. alka seltzer heartburn reliefchews.
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welcome back to cnbc. i'm michelle caruso-cabrera. the associated press quoting france's top security official, who confirms now three gunmen carried out the deadly attack on the french paper we have been covering this morning. earlier reports suggested two gunmen. we've been getting indications perhaps it was three.
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now we're told by france's top security official it is three gunmen. there has been a horrific terrorist attack in paris this morning. 12 people are dead including two police officers who responded to the scene when they heard the gunfire. that's according to nbc news investigations. 20 people are additionally injured, three of them critically. apparently they entered the location wearing hoods. they were captured on video by one local journalist shouting "allah." the location was the head quarters of a satirical news a magazine called "charlie hebdo." very well known for satirical attacks on political and religious groups and had lampoon lampooned the prophet mohammed many times. again, hooded gunmen apparently entered their news room or their facility and carried out this rampage. what's unclear is where are they
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right now. there are reports unconfirmed that they escaped to the paris is up ush suburbs in a hijacked car. so far, france's security officials are not confirming that at this point. it does appear there is some kind of man hunt going on. we're still waiting for details. back to you. >> thank you very much michelle. from that we get to a mad dash. >> so disturbing. >> it is. >> okay. micron. svu did really well. jcpenney. i hate to just focus on the down here for a second. micron disappointed on d-ram and nand for flash. people were expecting much better. this stock has been a horse. i think it's really profit taking. it has a history of selling down and then you buy it. i wish they did a do-over on the conference call. they didn't mean to be as down beat i think. >> any other stocks that conceivably -- >> people say sandisk.
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i'm excited to see sky works solution is not going down but going higher. i don't want to draw too many conclusions. the semiconductor group has been very strong. >> all right. we have the opening bell coming up right after this. female announcer: it's time to make room for the new mattress models!
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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just a want a minute's time. s&p is down five days in a row along with the nasdaq down 4% in that time. we haven't had four days in a row down all year long. then finally, boom. >> but there is a lot of evidence that when you have an opening three, four, five days at the beginning of a year most of those days have finished up. don't take your counsel from the idea that wow, i guess the year must be a bad year because this has usually been a prelude to very good years. >> yes. aside from that, adp relatively strong. more deflationary signals out of the eurozone. euro close to a nineteen--year low. >> they're going to have to debase the euro. i like boeing very much but airbus is a major project to hire people. they're willing to subsidize it
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for anything. >> speaking of which, that airasia search sounds like they think they might have the tail in which they might have the black box. so that search continues. >> boeing had great numbers. >> yes deliveries in 2014. >> look at that. >> there's the s&p at the top of your screen. a lot more green than red today. fico celebrating the 25th anniversary of the fico score, which as you know measures consumer credit risk. over at the nasdaq lulu lemon participating in nasdaq's fourth annual fit week. >> they're on fire. travel trust name. fico i don't know. if they would start giving mortgages to the people under 700 who don't have to put up 20%. i love those guys. it's not their fault. it's the bank's fault. >> well fannie and freddie want to start a program where you can put up as little as 3%. that's a little bit much. >> 15%.
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>> get a little skin in the game. >> fico, i don't know about you guys but when i was younger, i didn't have a 700-plus fico score. >> maybe you shouldn't have been buying a house. >> i had ten credit cards coming out of law school. >> right. >> yeah. >> you're not exactly what i'd be looking for. you were living in your car. >> look i had an unfortunate series of circumstances, unfortunate series of events. you'd be surprised how much room you have in that car. >> we were talking twitter a moment ago. icahn, according to his sources, has not have a position of any kind in twitter. >> i was glad that peter curry retweeted me recently. again, i have a lot of goodwill toward twitter. talking very big numbers. twitter has a giant market cap. they can do a lot. it wasn't so fanciful they could buy yahoo!. nine reasons about why it would
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make sense on yahoo!. peck's comments resonated. i think that dick costolo is probably a very nice guy. anthony nodo is my friend. bringing street.com public. then was a distinguished graduate of west point. worked as cfo of the nfl and did a great job. >> has nodo said, hey, go easy on my guy? >> he's a friend. look, i told my daughters i made a resolution for 2015. we're done with the negativity. >> what does that mean? i don't see you as negative. pr people argue you're quite positive. you're allowed to state your opinion on the work of certain executives. >> i can be more diplomatic than i've been. >> don't worry about diplomacy. >> earnings, february 5th on twitter. >> i want to mention monsanto. they reported earnings. mon if you're keeping track at home. >> not mtc anymore. >> exactly. $56 billion market value. better than expected number.
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there was a worry with corn prices down that you would have farmers not buying as much seed. >> right. >> didn't come through. seed pricing was pretty good. and they have a key soy product in brazil that there was some concern about. actually came in well above what has been estimates. don't forget, of course it was back in june when the stock saw its highs, when monsanto put in that large buyback. it was about $10 billion. and they continue to buy back stock. the stock not up that much but the number again a pretty good one. >> it reaffirmed it. yeah look a lot of people feel ag is going to be terrible. agco has been a tough stock to own. i would point out this is a biotech company. biotech company for seeds. there's derivatives here for dupont. so be careful. >> big journal piece on 3g capital. we were just talking about the brazilians, who have global
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ambitions, according to buffett. throwing out there all kinds of names. campbell pepsi. >> they throw out every name under the sun. i would argue none of them are likely, having followed this to a certain extent quite closely. they're a very impressive bunch, 3g. >> yes, they are. >> and their management techniques are being widely credited with the performance for the likes of heinz, which was their largest lbo to date along with mr. buffett. although, one wonders how far you can cut before you start to really hurt the operations. they have been successful. as for the new fund i think the most interesting thing for that article you refer to carl, is they are raising a new fund. the family is referred to as one of the potential investors. they are the second largest holder of s.a.b. no doubt in my mind, at least, based on reporting that there is a desire on the part of a.b.
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inbev would love to buy s.a.b. the question s are they a seller? that has not appeared to be the case. it's interesting to see they have a relationship with 3g. beyond that, the idea of a pepsi purchase or any others is probably not likely in the least. >> this has coors up. everyone feels like constellation brands they would be the beneficiary. >> they would be because of the joint venture that s.a.b. has with molson coors. they'd be able to buy that out. that's always been a play for people who think that's likely. also antonio weiss, remember that name? elizabeth warren doesn't like him too much. he's their banker. he's their number-one guy. if you got a big deal coming, one you've been working on or thinking about for years, you might want to hang around for another six months if you think you can get it done. >> you're absolutely right. in terms of the unbelievable rally we have here it is led by companies like sonic. sonic had a great number last
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night. i don't know if you like the commercials, the two guys in the car. >> i'm not a big fan of that one. >> have you had it? >> i don't really like the ads. just letting you know. >> sonic and jcpenney are what i've been talking about forever. that's the gasoline factor. you may be worried about the idea that midlands and odessa are going to be hurt. and absolutely. that will be. then you have outfits like sonic and jcpenney and they're leading us. i told you the other day jack-in-the-box was the key to this market. this was monday. >> wow. all-time high today. up 4% almost. >> if they spin off qudoba the stock goes to 100. >> not a bad chart. >> i love jack-in-the-box. great sop-up so to speak. and the qudoba is really good. vegetarian. i love the chipotle guys but
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the vegetarian burrito is just killer. >> aside from that your point about jcpenney dragging all the retailers higher. kohl's, macy's best buy, you name it. >> this is it. macy's didn't have all the great verbiage in that last quarter. i see a turn at kohl's. the one people don't focus on enough, dillards is having a major turn. dds. i don't know if you shopped at dillards ever in your life. this is a one to watch. it's been fantastic. it's going to get better. >> all right. with all that 140 points to the upside on the dow. bob posani is on the floor. good morning. >> good morning, carl. two of the three macro drags we talked about yesterday have reversed today. oil has stabilized, a little on the upside. bond yields are up. euro still a little on the weak side. two out of three ain't bad. take a look at europe. we're trading up despite the terrible attack in france. france has been up all throughout the morning, up 1%. so has spain.
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so has italy. and so has germany. fairly steady up day there. they've had a terrible couple days in trading there in europe. here in the united states seven to one. advancing declining stocks at the open. we're seeing a bounce in energy stocks financials industrials, technology, all the stuff that got hit rather badly in the last few days including energy trading to the upside. i said yesterday that for the markets to stabilize, we need oil to stabilize. maybe we need to change the conversation towards more positives in the u.s. economy. i think we had two positive talking points today. number one was jcpenney. i know you guys hit upon it. but 3.7% gain in holiday sales. that was a lot better than most analysts were expecting. i saw numbers 0, 1% 1.5%. 3.7% is a great move to the upside. remember, this stock is down 30%. look at that. it's up 18% right now. it's been down about 30% in the last few months. and this is one of the most heavily shorted stocks on the street. i think 35% of the float is
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short. you're going to see a lot of short covering today in jcpenney. we're going to get other reports from other retailers in the next couple days. i mentioned this yesterday. barnes & noble should be reporting tomorrow their holiday season sales. american eagle, pure one. all of them trading up after a up the couple days. i want to talk about oil. want question of the moment is when is it safe to buy other things out there? american express by the way, upgraded to buy overed a goldman sachs. i think that's a good sign. improving economy is what they talked about. let's turn to oil. xop, the etf of the moment. a lot of questions about when to buy. this has been down about 30% in the last several months. we've had an extraordinary event occurring. oil has tumbled more than 50% in six months. that's occurred only five times since 1980. this is according to our friends, our partners. i asked, what happened to the stock market six month later after these events happened?
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the five times we saw oil drop 50%. here's what happened. the s&p 500 was up four out of five times when that happened. the average gain was 3.7%. here's what's more important. what oil did. six months after oil dropped 50%, those five times, oil was up five out of five times and the average gain was 52%. that's not a typo. 52%. people have been asking me about this for a long time for days on end. i have quoted a lot of people saying the chances that oil would be $50 or $60 in the second half of the year is likely much greater than it would be in the $30. now, who knows? but we have some at least historical support that oil bounces after a dramatic decline. guys, back to you. >> thank you very much, bob. i want to talk a little fixed income on the faber report. nothing too dramatic. of course we've been so focused on the fall in interest rates.
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as we began this year yet again, we saw the ten-year bond below a 2% yield. we've talked often about the fact there are negative yields as far as five years in places such as germany. or if you want to give them your money for ten years, 0.49. so the risk to those out there, perhaps, would be continued rise in bond prices hence even lower interest rates. earlier on "squawk box," i thought carl and jim both said as well very interesting interview with lloyd blankfein, the chairman and ceo of goldman sachs. what he talked about was the risk of higher interest rates and the fact that it could come on quite quickly. boy, there are a lot of people out there who own a lot of securities given the issuance that's gone over the last few years who know that potentially what they hold may fall in value. but don't seem to really in the opinion of mr. blankfein, fully appreciate that risk. take a listen.
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>> you think there's a little bit of an embedded assumption that interest rates can't go up sharply to a very high level over a very short period of time. and as far as the disorderly nature, you know at some point it doesn't become the fed's decision it becomes the market's decision. once the fed starts to move they may want to go in a measured, slow pace. but if i'm sitting there in the market and i know they're going at a measured slow but inevitable pace, i'm going to get there in five seconds. the market may get there way ahead of the fed. >> up 9% over a year ago, the strongest annual period since they started keeping records. just a thought for everybody to chew on as we of course focus on, in fact ever lower rates and the idea being, jim that, well, you know, they're moving here because at least we're paying you 2% on your money as opposed to half a percent. >> if that's true, i was talking
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the other day, wells fargo. it's a 53 someone downgrades it maybe buy it back at 48. who trades like that? wells fargo would be a huge beneficiary. so would jjpmorgan. we should have asked lloyd about the breakup call. >> he did talk about it. >> because that's -- look maybe it's too big to manage. to me you want to own banks if you're going to get higher rates. i don't think he's going to be right. >> you don't think he's going to be right? you believe we're going to stay where we are. >> these french rates. you got to sell the euro. >> german two-year auctioned at negative 0.11. >> that's a lot to pay germany to hold my money. >> if the chinese were to sell bonds and try to clean their air that, would be something. our bonds are so cheap versus these other countries. you got to get your money out of these other countries. they have rich people in europe.
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>> they do. >> they like to preserve their purchases. >> talking bonds, let's stay in that arena and head to rick santelli in chicago. >> good morning, david. thank you. it's not only two-year rates that are negative. negative all the way out to the five year. it really does underscore that all the global dynamics of central banks in europe and japan and even the u.s. aren't coming up with solutions to the lower pricing pressure environment. they may indeed be one of the key reasons for this kind of spiral of negativity. but that's for another discussion. if you look at a one day and two day of tens you can see that rates have moved up a little bit. we're up about four five basis points from our 1.94 close. if you open the chart up when have we closed down at those levels? not since may of 2013. 241,000 adp for december. that's the best since june of last year. you also saw an under 40 read on
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the trade deficit. now, as you look at 30 year the longest treasury instrument on the curve, we haven't been down at thooes current yields since july of 2012. and also remember on ten-year note yields, you know the long end is down seven sessions in a row, meaning higher prices lower yields. will this be number eight? we'll pay close attention. if we look at bunds versus tens and i've been on this a long time, you can see on this chart starting in november we're kind of right back the rubber band stretch, then it came back to this 150 area. monitor that. looks like we're comfortable here. maybe we will end this run. quickly f you look at the euro or dollar index, both are comping basically to the same period. the euro early 2006. the dollar index best level since late 2005. it's basically the same chart. carl, back to you. >> rick thanks so much. rick santelli. crude oil is up about 1.5%. let's get to jackie deangelis. >> hi carl.
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do recall that overnight we had wti under $47 a barrel. brent is go under 50. but this morning we are getting a little bit of support. traders are pointing to a couple of things saying this is a technical bounce to the upside. still some factors that could push us down. first would be fresh comments from the uae oil minister saying this oversupply could certainly last for years. also saying that pricesing recover if non-opec producers act rationally. so shifting the blame here to the non-opec producers. meantime china gdp for the fourth quarter could be 7.2%. we haven't seen that since 2009. so that could bring some downside to this market as well because everyone is concerned about china's growth and demand for oil. meantime, we are awaiting the department of energy report. the inventories at crude at 10:30. the api last night reported a 4 million barrel draw. that's also why we're getting a pop today, carl. back to you. >> all right, jackie. we'll come back to you later on.
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we have more details on the deadly shooting in paris this morning. our michelle caruso-cabrera is back at hq. >> richard esposito has a security source updating him from the scene in paris. here's new details that we're learning. three suspects arrived at the headquarters of the satirical magazine "charlie hebdo." so three suspects. one stayed in the vehicle. the other two entered the building and began firing. two police officers permanently assigned to secure the building descended from the second floor and engaged the suspects. remember the police officers were permanently assigned because this magazine has a long history of lampooning the prophet mohammed. in fact, was fire bombed in 2011 for exactly that. one man on the street during that engagement with the suspects was killed instantly while the second was hit and then executed as the suspect stood over him. responding police engaged the suspect and a third man on the street was killed as well. ten journalists were killed inside including the editor.
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suspects fled the scene, and all are still at large. we should also point out that reuters is reporting that danish newspaper that triggered protests when their prophet cartoons were protested, they have increased their security. there's been an e-mail sent to employees of a spanish newspaper. they've evacuated the building after a suspicious package was delivered. so seeing other editorial outlets throughout the world concerned after what we've seen so far this morning in paris. carl, back to you. >> thank you, michelle. meantime, our affiliate wnbc saying the nypd here in new york is boosting security patrols as a precaution after that attack. when we come back an interview with aol ceo tim armstrong. dow is up 135. best gain for the dow since december 18th. we're back in a minute.
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december's nonfarm payrolls. handle is @squawkstreet. the lucky winner receives this cnbc umbrella autographed by the "squawk on the street" gang. we're not going to open it inside. i think that's bad luck. you've signed this. >> no i haven't. i think that's important. >> you'll have until friday to tweet us your predictions. adp in 2014 underestimated bls by an average of 26k. >> bos means matter than an adp even though it's calculated better. i like the paychecks, guys. that's what we're really watching for jobs. >> stock trading with jim in a moment. session high is up 166. don't go away.
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time for cramer and stock trading. >> people underestimate alkermes, they came out with an anti-schizophrenic drug that does not cause you to gain weight. zyprexa did. this drug will do i believe,
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similar numbers. alkermes going much higher. >> 4% gain. >> you promise me this? >> that was a different one yesterday. >> that was an antidepressant. >> this drug is even bigger. i mean if you cannot have weight gain you'll not have epidemic diabetes -- some very bad numbers with zyprexa. it was a $5 billion. anti-schizophrenic without the weight gain. >> pops on "street signs" today. >> meg. >> where's your tolerance for ringing the register. >> alkermes is a platform. when you have a platform it's good. i worry about the immunotherapy drugs. this is the holy grail for schizophrenia, which is unfortunately a terrible disease and a very very prevalent one
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among younger people. >> what's an "mad" tonight? >> we have h & r block. bill cobb has done some -- i think he's woken you up to the idea that if you don't focus on the affordable care act you'll pay a penalty. we have to focus on that ourselves. >> jim, we'll see you tonight. "mad money" 6:00 eastern time. tim armstrong of aol after the break.
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good wednesday morning. welcome back to "squawk on the street." i'm carl kintquintinilla. some relief in oil as well. as we await some inventory numbers later on. >> let's get to the road map as carl mentioned, stocks rallying back. we'll talk to the u.s. senior u.s. economist at bank of america merrill lynch about what this means for the economy and the fed. >> apple is coming off its worst losing streak in almost three years, having lost almost $70 billion. is it now a buying opportunity. >> find out what the recent fall in oil prices mean for the big
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energy companies. we'll talk to a top analyst. also coming up later, a first on cnbc interview with the chairman and ceo of aol. tim armstrong will join us live from ces in las vegas and address all of the deal rumors of the past couple weeks. stocks opening up higher 174 points. the stampede of nervous investors into safe haven treasuries pummeled the yield on ten-year, down to 1.91. you can see we've come back slightly from that. steven wood of with usle investments johns us now as does michelle meyer, senior economist of b of a. that felt very rough, steven. >> the opening trading days very much so. there's a lot going on not a lot of time to process the information. longer term what's happening in oil, i think in the u.s. economy is unabashed positive. but in the shorter term there's a lot of deals and projects a lot of information to get priced in the short term. when we work through this we
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think being up higher single digits equity market in the u.s. the economic picture looks reasonably good and what's happening in the oil space will be one of biggest global tax cuts. >> john plenda puts it this way, market pundits, i think he means in this country, became overly obsessed with the possibility of inflation in this country and when the fed would raise interest rates. actually what we should have been discussing and focusing on more is the growing demand deficit that's in japan, china and the eurozone. you come back to that same argument, which steven raises correctly, can the u.s. make it on its own when everything else is falling away? >> it's an open economy. it's a global economy. what happens abroad is going to very much influence our trajectory here in the u.s. but i think it is important to think about what's happening here in terms of the healing and the economy. we're much further along in the healing process, the labor
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market has been improving at a meaningful pace and showing real momentum. last month we had 321,000 joshs created. on friday we think we'll see about 250,000 jobs. gdp is tracking about 3% heading into the end of last year in terms of our q4 gdp tracking. we think that will be persistent this year with above 3% growth. yes, there's a lot of risk and a lot of those downside risks abroad. >> also to the question of do you see the trend of growth altering in this country, your answer would be what? >> i think the trend of growth in the u.s. is going to continue to improve. i think there is room for cyclical gains. i think we'll see it this year with above 3% growth. there's downside risks but i think the growth will improve. >> that's a very important thing for you to say, michelle. as far as strategy goes within the market it's clearly been a major flattening of the yield curve which is bad for financials. health care actually did quite
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well yesterday. >> yes. >> health care technology was the big bet for this year. do we stick with that? >> i this i we're calling it the squeeze play sorry for the baseball metaphor. this say global central banker's world. they're letting us play in it right now for a little while. what does one do in this world? we'll have to look at the flattening yield curve, the lack of opportunities in fixed income space and find out what kind of risk asset strategies. multi multiassess strategies will be important. we're looking at europe. whether the economy surprises to the upside equities could do better based upon evaluations or if it doesn't surprise draghi will have to get very very busy. >> do you buy health care when it seems to be outperforming? and where are we on technology? >> financials right now we'll want to look at a rising rate environment, the fed in the united states. if you're look from a u.s. specific perspective, what can
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benefit. >> it isn't a rising rate environment. it's exactly the opposite. the curve is flattening the mark set doing its own job. >> right. >> we've seen a substantial flattening of the curve. we done the need to talk about the feds for possibly six months or a year. that's the point that so many people have missed. we're not about the fed at this stage, despite the minutes this afternoon. >> i would disagree. i think the fed is very much in play as yellen said every meeting is live. it's no the just the fed's meeting. january 22nd is a global monetary policy meeting. you have the u.s. branch the european branch and the japanese branch. this is almost a coordinated global policy environment. >> very quickly, michelle while we're talking about the fed, how does the stronger dollar and sharply lower oil price, surely it complicates the thinking for the fed but does it change the thinking and the trajectory for fed action this year? >> it certainly does. it's creating disinflationary pressure. that's what the fed told us in the last statement. they're closely monitoring
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inflation. they're not yet at the point where they acknowledge downside risk developing but they're monitoring it. on the one hand you have an improving underlying economy, activity data looks strong. the quick app is making some progress. on the other hand, the actual inflation numbers are soft. and the stronger dollar and the drop in oil prices are disinflation disinflationary. what does the fed do? they wait, monitor and i think they hold off in terms of interest rates. our call is for september. we're still pretty comfortable with that. >> nice to see you both. michelle meyer and steven wood. thank you. it was a big day for our friends over at "squawk box." some of the biggest names in business joining the show at its brand new set in new york city. andrew ross sorkin joins us with highlights. it was fun to watch. you had good visitors and great conversations. >> we are here right across from radio city music hall. it was a good day.
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lloyd blankfein saying he is bullish on the markets, not worried about the macro and bigger issues in europe. in particular, notten kleined to believe interest rates are going up anytime soon. >> i would take a lot of risk on the inflation side. i would take that risk to avoid a low, but very adverse, consequence of it back sliding. if it back slid, what would we do? what would the remedy be? stimulus package, legislation passed, fiscal? the only game in town has been the monetary. we fired a lot of those bullets. i would keep firing. >> one of the other things we talked to lloyd about is a goldman sachs report suggesting that jpmorgan should break up the valuation would be higher and he said that he imagines over the next couple of years some of the bigger banks may have to rethink their model. that was an interesting comment to hear from lloyd blankfein, not necessarily suggesting that goldman sachs would be re-imagining its model anytime
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soon, though. when it comes to bill ackman we talked about herbalife. it was this valiant fight that we talked about, and allegations of insider trading. here was his response to some of those concerns. >> you can trade on inside information if you received it from a source who wasn't breaching a duty. >> we could have done a threesome. and done this. >> absolutely. >> then the law, you expect some type of litigation to be offered by -- >> it's ongoing. >> and there is, of course ongoing litigation around that case even though that deal is now over. he also made an interesting comment about jcpenney jcpenney out with numbers today. he did not seem too bullish on that company at all. that's all from here. we're right here midtown manhunt. you are now downtown kicking it
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back across the bridge. >> as good as the set looks, it does look great, the show today proved it's about more than just the set. the interviews were outstanding. >> thank you, carl. >> andrew ross sorkin. france raising anti-terrorism alert in the greater paris area to its highest level. the gunman still at large. our chief international correspondent michelle caruso-cabrera has the latest. >> reporter: three gun mn stillmen still at large in paris. there is amateur video posted by reuters which shows the gunmen hooded as they are escaping. they shoot a police officer, stand over him and execute him point blank before running to a car and leaving the scene. remember two police officers were permanently assigned to secure the building. they descended from the second floor and engaged the suspects. they were there permanently because the magazine has a long
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history of lampooning the prophet muhammad. one man on the street was hit instantly, the second as well. we understand innocent people on the street may have been injured, killed as well. two other points we should make at this point, the french embassy, the u.s. embassy in france, is saying that despite reports to the contrary they verified that they are going to stay open. there are no plans to close or limit access to the u.s. embassy in paris or any other diplomatic facilities in france. and we are seeing some market fallout over in paris. we're seeing shares of airfrance, lower by more than 3%, perhaps because there are concerns that maybe there are more attacks or maybe they could be a target as well. again, here is some amateur video, this is not the amateur video we were referring to earlier, this is a different one done by a french journalist. what's significant about this one, if you understand french you can hear one of the suspects
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shouting allah during this video. and so this is one that has been posted on the internet as well. guys, back to you. >> all right. thank you very much michelle. we'll continue to look to you as we get further updates on the story. up next, a first on cnbc interview with tim armstrong, the chairman and ceo of aol. he'll address all of those deal rumors swirling just this week. don't want to miss this. "squawk on the street" will be right back. ommission-free online trades. tdd# 1-800-345-2550 so if you get a trade idea schwab can help you take it on. tdd# 1-800-345-2550 we're getting a lot of questions tdd# 1-800-345-2550 about organic food stocks. tdd# 1-800-345-2550 [ male announcer ] sharpen your instincts tdd# 1-800-345-2550 with in-depth analysis by schwab experts. tdd# 1-800-345-2550 and if you want to run your idea tdd# 1-800-345-2550 by a schwab trading specialist, tdd# 1-800-345-2550 our expertise is just a tap away. tdd# 1-800-345-2550 what's on your mind lisa? tdd# 1-800-345-2550 i'd like to talk about a trade idea. tdd# 1-800-345-2550 let's hear it. tdd# 1-800-345-2550 [ male announcer ] see how schwab can help tdd# 1-800-345-2550 light a way forward. tdd# 1-800-345-2550 so you can make your move, wherever you are tdd# 1-800-345-2550 and start working
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bulldog: mattress discounters' year end clearance sale ends soon! welcome back to "squawk on the street." check out shares of janis capital. the stock is moving higher by 4%. jpmorgan upgraded the asset management holding company to overweight from underrate.
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the firm says it sees the company as a positive organic growth story. as a result, shares again near session highs, sara up by 4% on the day. back over to you. >> thanks very much tom. meantime shares of aol are pretty flat this morning. after a volatile day yesterday. investors sngd the stock higher by as much as 7% early on rumors of another potential deal. this one with verizon. verizon's ceo later dismissed it as, quote, inaccurate. let's find out what's really going on and head out to las vegas where julia is joined by aol ceo tim armstrong. >> local mcadam dismissed deal talk. >> i usually see you in new york for ad week and ces and sometimes in france. the last couple times i've seen you you've asked me about deals related to aol. i'd give you a similar answer
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i've had before which is our strategy of being in global content brands video and programatic advertising is clearly where the marketplace is going. there's always speculation around us because we've taken a company that was not doing well and we'll end 2014 with two years of straight growth at the company. i think from whether it was verizon or the other companies you asked me about, we have a lot of partners coming to see us and talk to us about different things. aol has a unique vision unique strategy. we've stayed on strategy. i think you'll see us in 2015 operate against our vision and that's our main focus. >> the stock's big jump is clearly an indication that investors want to deal. >> i think actually, what's been happening with aol over time is that you have a company that was not at the front of the internet and now when we've ended 2014 november, we served the most video ads on the internet crossed 200 million multiplatform uvs. we are the official partner for ces for the digital content.
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when you come in to ces, one of the first brands and biggest brands is our own gadget brand. if you're a company that's in advertising, media, distribution, any of those things, and you want to get into digital, which everyone has to now, you and i have talked about this in the past is fait accompli. all the things that are going to be happening is going to be the future. aol is one of the companies at the forefront of that. we've proved it with our metrics, products and brands. that's why you see the interest around the company. we're on a vision and we're going to stick with it. >> simon, you want to jump in? >> yes. >> i want to pick up on the point that you made with multi-integrated tools, tools for buyers and sellers. contrast, you sitting there with people clearly after a piece of that pie or a deal with it. and marissa mayer over at yahoo! ten times your market cap who
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appears to be wanting to do old content deals, buying scripts, food network, whatever it may be. how do you contrast these two strategies and whether there is scope for you to to do a deal which some yahoo! shareholders would really like. >> the bottom line, simon, we've been really crystal clear about this, we believe there's going to be 10 to 15 major chairs in our industry that people want to sit in. there's been 200 ad tech companies trying to get in those chairs. we have gone to the forefront. google and aol and make facebook have the most complete ad systems at this point. and the reality is we're in a very very strong place right now. we have excellent products excellent talent and excellent ability to work inside the advertising and media business. and you combine that strategy with things like the huffington post and tech crunch and gadget and map quest and those type of brands, aol has a killer strategy for the future of where things are going. when you take a step back and you say is there enough room for
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everybody? there will be multiple companies, the answer is there will be multiple companies. there's 200 ad tech companies and 50 to 70 major traditional media companies that need to get into digital also. internally i say there's 10 to 15 future chairs that people can sit in. there's, you know, probably 200, 250 companies trying to get into those chairs and there's talent for probably 30. so we're in a very competitive industry. aol has done a very very good job. our global team and leaders have done an amazing job of building out unique platform that's good for advertising, good for media, good for partnerships. and i think regardless of what's happening with any of the companies that you mentioned, we see where the future is going, we saw it for years ago with the first company to really invest in video distribution really for one of the first companies to invest in the programat tic platform. one of the only companies that believed in content brand. when we bought the huffington post people did not believe
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content brands would be big on the internet. i don't know what the other companies will do but we're working as hard as we can and we did it at the lowest cost. we're probably the only major internet company that kept head count flat last year while doing all this growth. we have an efficient use of capital, very good at operations and very good at the future of where the business is going. there's a lot of rumors floating around about our company all the time. if you go back to results, we've been specific about what we've been doing. we'll keep doing that. >> as a follow-on, it's sarah, on all of the positives, quickly here, do you feel that you need to do something radical like split up the company or sell it so investors and the market better realize the value of some of these properties you're talking about? >> no. you know we just had our board meeting at the end of december to wrap up the year. we have another board meeting coming up. what i told the board was our vision and strategy has to be about getting more ladieser focus. one of the things at aol,
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there's 300 brands we're down to 10 or -- we're down to launching one by aol, a new programatic platform. we were the largest distributor of ads on the internet. we'll continue to narrow our focus down. we know where value is. we know where we want to be as a company. i think we'll get more efficient and double down on the areas we've been strong in. i'll do what it takes to get bigger scale over time. we have a nice business as well and the businesses we're in. i want to grow. >> do you think you would do a better job at running yahoo! than marissa myayer? >> i don't have comments on other companies. i have comments on what we're doing as well as we've done the last two years, i see a lot of places that aol can improve.
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i haven't spent a lot of time worrying about what other companies are doing. i'll stay laser focused on aol. >> before we came on camera here, we were talking about over the top streaming video announcements. >> yes. >> just yesterday, two days ago dish announced a new over the top service. you think these will have an impact on your business. >> i was saying earlier, "the wall street journal" was in front of my hotel room. i picked it up. go to the marketplace section, the two stop stories is dish is unbundling and the real focus dish has in terms of bringing espn and other things directly to consumers and ott. the other was cnbc not using nielsen by the end of the year. january, a lot of people go through the planning cycles in the fall. a lot of things come out in january about where the future is going. if you took a millennial or younger person and told them that they could use dish's product, i think that's going to be a successful strategy. number one. and number two, the measurement -- i watch cnbc a
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lot in the mornings and my guess is whether nielsen correctly judges the audience at cnbc or not, the influence of audience on cnbc is probably very very powerful. i think there ill with be ways as the internet of things takes off, as ott takes off, you'll have a much different looking world at how consumers get information and how you measure it. >> you specifically said more over the top streaming, more cord cutting will be a win for aol? >> if you look at our statistics. i was one of our content partners yesterday. she was comparing her ability to dow do film and tv shows in the online world versus the offline world. as soon as everyone gets trained that ott is the way to get content, which is what's happening. when dish comes in you'll see everyone pile in. >> it will be interesting to watch what happens over the course of the year. thank you so much for joining us. carl, back over to you.
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>> julia, thank you. apple trying to recover from its worse six-day losing streak in more than three years. stock is down about 5% in that period. buying tune or no? we'll talk about that after the break. the cnbc real time exchange market snapshot is sponsored by interactive brokers.
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apple shares recovering after suffering its worst losing streak since 2011. stocks down 9% from 119.75, back on november 25th. investors eyeing a report this morning that the long-awaited apple watch is due for release in march. joining us this morning is managing director. good to see you back. >> good morning, carl. >> you don't get discounts like this too often. does it intrigue you? >> i mean be the stock is trading at a 14 multiple. the market is at a 17 multiple
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and they're growing earning at 20%. it seems not too long ago that we were talking about negative earnings growth. we went to 13% earnings growth last year and now you're talking about a major company generating 200 billion in revenue and able to grow earnings by 20%. that seems like an attractive stock to buy at a 14 multiple. >> you point out the post iphone performance was actually below trend, is that right, going into the end of 2014. >> it was. again, i think it's a little challenging to take too much away from this. but if you look at when the phone was launched, you didn't have a massive run like you've had for past iphones were the stock was up 20%, 30%. it was less than 10%. while some would argue the valuation discounts the strength of this iphone sales cycle in the quarter, i don't think that's necessarily true. you had verizon talk about a higher upgrade rate. t-mobile reported strong subscriber growth.
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there's a trend for a subquarter that can roll into the march quarter as well. >> what do you think about the price action? if you look at what's happened in fact since the beginning of december it's a 10% move to the downside that accelerates over the recent sessions. they've lost about $70 billion in all. that's a very big move. a lot of people disagree with you, it would appear. >> i think there's a lot -- for any tech stock there's gaming as far as what the next catalyst is. obviously the next catalyst other than reporting the quarter is going to be the launch of a new product. this is tim cook's first new product category that he's launching. these new iphones were effectively revisions of old product category. there's a lot of focus on the iwatch. will it or won't it deliver big numbers? we're looking for minimal, 5 million. which for most companies would be a huge production. 2.5 billion or so of revenue. but if they can deliver on the watch, which really isn't until the june quarter numbers, that could be another catalyst for
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the stock going forward. >> walt you've been tweeting a lot about verizon, especially in the wake of those reports yesterday about aol. we just had tim armstrong on. he didn't give us a whole lot. what was your thinking as those stories crossed and then got walked back? >> i think for verizon, you know, they need data to grow. that's their main focus right now. they need you to stream more mobile video on your phone. they are getting into a business where they're doing an ott video offering. right? they might need additional technology or product service offerings for these new businesses that they're getting into. but i don't think that they necessarily acquire that where they need to spend their money is where they're spending it right now. you have a massive spectrum option where verizon will spend tens of billions of dollars, spare spending $3 billion on aol rather than spending tens of billions on spectrum. probably another necessary transaction is for them to buy dish which has a ton of
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spectrum, which is much more important for verizon than what they're doing, rather than partnerships with media companies. >> nonetheless, how do you value this down the line solution that they have at aol for ad buying? it must be of some use to someone. >> you can get access to that via partnering as opposed to necessarily acquiring the company. we're still in the infancy stage of this. dish talked about this new over the top service yesterday, verizon will have something out. you know we're still in the early stages. there's a ton of video content that is still getting viewed in a linear fashion. that's going to be shifting to the over the top. there will be assets that companies like aol and others have that will be of interest. it's a matter of how companies use those assets. >> thanks for the time. it will be an interest 2015 i'll tell you that. breaking news on crude oil. jackie deangelis at the nymex. >> the department of energy out with its weekly inventory
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report. we are still in positive territory on wti but prices are moving lower in the sense that the gains on the day are dropping. that is because we got a crude oil draw of 3.1 million barrels. typically that would send prices higher. but it's the gasoline build of 8.1 million barrels that traders are really watching. the other thing to consider here is that before this report the eia was reporting that the five-year average were above that level by more than 12% and the stock situation. that means we're well supplied in crude oil inventoryies. that's not a new story. that's why the gasoline build of 8.1 million barrels is what traders are looking at now. we're only up 36 cents now. traders are selling crude on this report. back to you. >> thank you very much. straight ahead on the program, crude oil has fallen now, nearly 40% in the past two months. the big oil stocks are seeing sizable declines now as that feeds through into the market particularly for integrated oil. what does the future hold for
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french crude oil staying above $50 a barrel after earlier dipping below it this morning. for more on the crazy things how this could affect the oil producers, joining us now is an
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oil analyst from oppenheimer. are you seeing a bottom here? a lot of people wondering when that is going to come and how they can get in early. >> it's a question of how low can oil prices go? i think we're very close to the bottom. if not we are at the bottom, oil prices when they go up they go up much higher than the financials. when they go down it's the same situation. i don't think oil prices are below $50 are sustainable but i also do not think oil prices above $100 were sustainable either. >> we're just looking at all of the ripple effects and implications of this. your note was interesting. you look at the gap about how it's helping main street prices at the pump retailers, restaurants, you name it yet wall street seems to be spooked
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by this. do you think it has to do with the revisions for earnings and capital spending? why is this? why is it good for wall street -- good for main street, bad for wall street? >> a couple things. a lot of people think the weakness in oil prices could be a symptom for something else which is slower economic growth globally. that's what scares people. we have china, lower than expected economic growth. you have japan. obviously it's the u.s. market is only like an island, the rest of the world is not in very good shape. the weakness in oil prices the drop by 50%, that could be a reflection of weak economy for years to come. >> rumors every day about king abdullah, hard to know what to take seriously, what not to take seriously. how would it change in leadership alter the course of prices if at all? >> absolutely nothing. he's a smart man.
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he put 79-year-old half brother as the successor and also a 69-year-old who is going to be more of the ceo of the country. he is going to be the day-to-day manager, if you will. there will be no change. they have a specific target they have to lead the competition, basically russia using lower oil prices. we are not there yet. i think it will continue for a longer time. >> fadel, you said something incredibly important at the beginning of interview, you didn't rule out the idea that oil got down to $40 a barrel. jeffrey goodluck for what it's worth, said recently if we did hit $40 a barrel on oil, the
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yield on the ten-year could go to 1% and $40 would indicate something was very very wrong with the world, not just the economy. and the consequences could be to put it bluntly, terrifying. if we hit $40 a barrel oil, what countries go under? which countries go down? that's not sustainable? >> yes, 100%. the whole idea here you can hold your breath longer than your competitor. that's exactly what they said before. those companies that have lower cost structure, that have the financial flexibility that they can withstand the pressure for the next year or so would be -- >> fadel, not all parties are quu equal. i'm worried about shocks that could hit this market badly. what are the people that could
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under here? who are you talking about when you describe survival of the fittest? who fails. >> a couple of things. we do not have to say oil has to go back to $100 for a barrel of oil so venezuela can balance their budget. it's manage management incompetence. russia admitted she enthusiasm have diversified their economy away from oil export. hello. he should have known that better. the bottom line here oil provisions below $50 are not sustainable. and for investor a year from now, two years from now, that could probably be a buying opportunity. but you have to have a lot of nerve in order for you to make this conclusion. >> and by the way, wti just turned lower, 47.85 after we got that inventory data this morning.
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fadel, always interesting perspective. thanks for joining us. let's get back to that unfolding security situation in paris where at least 12 people have been killed in a shooting incident at the offices of a french satirical magazine. french is raising its anti-terrorism alert to its highest level in the greater paris area. joining us on the phone, bob liscouski. welcome back to the program, sir. what is your reaction to the events in paris today? bob liscouski, can you hear me? i think we have a problem. >> okay. when we come back the vp of innovation for lg electronics. join "squawk alley."
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have a look at the energy sector. bouncing back a bit today. dom chu is back. >> it's a big deal. energy stocks are trying to rebound after this selling pressure over the course of the past week and arguably over the past six or seven months this on the back of higher oil prices. but prices just turned negative following the department of energy's inventory data. leading the way higher for this morning at least for now are anadarko petroleum, marathon baker hughes and halliburton. they're green. the question is whether or not they stay that way over the course of today's session. back over to you. for more on the paris situation, let's bring in bob liscouski. welcome back to the program. clearly it's a difficult day in paris with these shooting. i believe 12 confirmed dead at the hands of machine guns and people reportedly running away
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shouting "allah." what is the reaction to what you know? >> good morning, simon. it certainly seems look a farley well planned attack. the attack started off, it must have had some pretty good operational, preoperational planning given the fact they understood when meetings were going to be taking place, when most of their targets would be present which apparently wasn't that frequently. they knew that the police protection was going to be there, based upon preoperational surveillance. it looks like a fairly well planned attack and as well as their ability to excoordinate with the getaway car. >> i am in no way condoning the murder of 12 people with what i say but professionally, is it not a case where you say, look what you're doing is deeply offensive to a section of the community. and whilst i defend your right to say it and i will always defend your right to say it you
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have to understand the anger that creates and how you are inflaming what happens on the streets of this country further down the line. if you frame this in a racial context, in this country the narrative might be different. is there ever a conversation to be had, mr. liscouski, along those lines? >> it's certainly an interesting perspective, simon, i'll tell you. posing that question to me i suggest that the media clearly has the freedom of the press at its side. i don't think this is necessarily from a racial perspective the way i'd pose it. this is really freedom of the press and the ability to kind of speak one's mind in a way that the media and the press have done for centuries. i think there is a level of responsibility and i think that's been well addressed with responsible journalism. but these view points are going to get out there. i think it's really the onus on people's reaction to those view points is what has to be controlled here. extremist groups shouldn't let us or dictate how we you know
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in the free country, the free world, have the ability to speak our mind. and if speaking our mind is offensive, you know i think that's what allows great nations prosper. you may not agree with it. >> bob, the nypd increasing patrols obviously the wake of the attack probably not a huge surprise. if we find out that the gunmen were in some way encouraged to act by isis or al qaeda, what is the barrier to having that kind of encouragement cross into the states? >> well i think irrespective of whether it's isis inspired or al qaeda inspired the general type of attack is something we prepare for frequently here in the united states. through active shooter training, dhs, department of homeland security and the fbi are very aggressive about putting notices out and helping police forces train against these types after tacks. there has been plenty of precedence for it the mumbai-style attack in 2008 in india shocked people in the
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level of planning that can go into soft targets. we look at that very strongly here in the united states and work with private sector and law enforcement to try to prepare against these types of attacks. the challenge we have is the fact that they're pretty unpredictable. they're relatively -- i say they're relatively easy to perpetrate because it doesn't require a lot of sophistication to conduct an attack like this with disastrous outcomes. whether it's a movie theater-style type of attack that took place in colorado or regrettably a school shooting or what have you, this is the nature of our society that we're open and people have access to weapons that they can use for things like this without a whole lot of planning. that's point number one. the other point is fact that we know that there are lone wolves or, you know, self-inspired extremists that get their inspiration from the internet or from other types of publications that encourage them to conduct these types of attacks. the "inspire" magazine published by al qaeda periodically routinely goes out and lone
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wolves and others should be picking up arms against people in the united states. the fbi and dhs, again, and local law enforcement are very aware of those type of things. i think this is just going to raise that level of awareness even further. >> thank you. robert liscouski, former assist and the secretary of homeland security. thank you. we have breaking news on housing. diana olick has details on that. >> we do have it confirmed that president obama will announce a reduction in fha mortgage insurance premiums tomorrow at a housing event in phoenix, arizona. the reduction will be from the current 1.35% insurance premium to 0.85%. that is a significant drop and will definitely make a difference on many people's monthly mortgage payments. now, a source i spoke with who has seen the president's speech already says this quote couldn't come at a better the better time. especially right before the spring housing market.
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the spring housing marketing begins in february. why so important? not only will it give a boost of confidence to the lagging housing recovery now. we've seen mortgage applications falling dramatically as fewer and fewer people are getting into the market. but what it will also do is help the fha. as you may recall fannie mae and fred mac announced talo down payment mortgage product. at 3%. and the fha could stand to lose significant volume if all of that business went to fanny and freddy. by lowering the premium they are making themselves competitive again with fanny and fred di-dy. and that is important to keep the fha healthy. president to announce tomorrow. >> thanks dianna for that. keeping an eye on the markets for that. we are in rally mode here. the s&p off five straight days of losses getting a nice bounce.
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we are you have a high we are off the highs of the session. nasdaq clearly in the lead. we'll have mur in the market action after the break.
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welcome back to squawk on the street. we're seeing three big macroeconomic themes show up in the data. strong u.s. growth. weak foreign growth and lower oil prices. fourth quarter gdp revised up 0.4%. we're now over 3%. this number had been hovering around 2% after the strong two quarters in the is second and third. looks like the fourth is above 3%. deustche bank the perennial optimist. and the goldman sachs at just 2 and a half percent. why the change? we got to go back to breaking news. >> we are going take you who washington. secretary of state john kerry making a statement about the french attack. >> to meet with us and talk about the important relationship
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between poland and the united states a very important nato member. before i do talk however about our relationship both of us were just talking about the horrific attack in paris today. the murderous attack on the headquarters of the charlie hebdo in paris. i would like to say directly to the people of paris and of all of france that each and every american stands with you today not just in horror or in anger or in outrage for this vicious act of violence. but we stand with you in solidarity and in commitment, both to the cause of confronting ek extremism and in the cause which
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the extremists fear so much and which has always united our two country, freedom. no country knows better than france that freedom has a price to. france gave birth to democracy itself. france sparked so many revolutions of the human spirit born of freedom and of free expression and that is what the extremists fear the most. they may wield weapons. but we in france and in the united states share a commitment to those who wield something that is far more powerful. not just a pen, but a pen that represents an instrument of freedom, not fear. free expression and a free press are core values. they are universal values. principals that can be attacked but never eradicated because brave and decent people around the world will never give in to the intimidation and the terror that those seeking to destroy
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those values employ. i agree with the french imam who today called the slain journalists martyrs for liberty. toopd's murders are part of a larger confrontation, not between civilizations, no. but between civilization itself and those who are opposed to a civilized world. the murderers dared proclaim charlie hebdo is dead. but make no mistake. they are wrong. today, tomorrow in paris in france or across the world, the freedom of expression that this magazine, no matter what your feelings were about it the freedom of expression that it represented is not able to be killed by this kind of act of terror. on the contrary, it will never be eradicated by any act of
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terror. what they don't understand, what these people who do these things don't understand is they will only strengthen the commitment to that freedom and our commitment to a civilized world. i'd like to just say a quick word if i may directly to the people of france. [speaking foreign language]
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>> secretary of state john kerry making a statement about the attack in france this morning. obviously in two language, telling the french we stay with you and the principles of free speech can be attack but not eradicate eradicated. let's bring in michelle caruso cabrera. >> as secretary of state he's one of the many leaders tasked with what is the great challenge of our time which is battling terrorism and to see what happens in paris. we worry that it can happen all over the world. it is the attempt by the terrorists certainly to do that but that is also his greet charge he faces. as we see what's been unfolding in the middle east for now decades and most recently the situation with iraq and iran. there is something i want to show you. we're going to bring up the website of the charlie hebdo. it's now been changed to this. i am charlie.
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and this is the rallying cry now across france about an hour from now, 6:00 paris time there are going to be rallies or canned candle light vigils or moments of silence will people are saying i am charlie to show homage. >> in the meantime michelle, obviously we are now confirming three gunmen, not two as earlier reports ad had stated and we assume the man hunt continues. >> we assume that. absolutely. we know the three are at large still. we've seen the video of them getting away in the getaway car. we haven't seen explicit statements there is

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