tv Squawk on the Street CNBC December 31, 2015 9:00am-11:01am EST
20-year stuff. >> i don't care if it is 21 years after tomorrow. we are still going to do it. >> we milked it again. didn't you like that? >> there were more of you doing the bloopers. >> the pronunciations. >> happy new year. right now, it is time for "squawk on the street." good morning and welcome to "squawk on the street." i'm sara eisen along with simon hobbs. taking a look at pressure, under pressure on the full trading day of 2015. they are indicated to open lower. this is a make or break session for the s&p 500. up a whopping 0.2% for 2015.
nasdaq futures under pressure as well. london and paris have wrapped up abbreviated sessions. germany, among the abbreviated markets that are closed on this new year's eve. the client is in europe following a pretty brutal month for european stocks. >> we have seen some selling of treasuries lately. yields higher today. a bit of a different story. crude oil, arguably the story of the year. down again under pressure. both wti and brent above $30,000 a barrel. >> will the s&p finish in the green for the year? >> new year's eve celebrations already kicking off around the world. some cities canceling plans over security concerns. george lucas opening up about his break-up with star wars saying he sold out to the white slaves. disney down 10% since november.
can the s&p finish the year in positive territory? that's a question that will be answer in the final day of 2015. nasdaq leading with a year to date gabe of 7%. 0.2%. just 4.5 points positive for the year. the dow jones, nearly, 1.25%. mike with oil under pressure. can we hope for a positive session? >> it is great the markets left us with some positive moments. last year, december 29th was the high for the year. we sold off for two days. we also had a weak january. i don't think that means anything. the trajectory of the year the way it looks like it is going to finish is almost precisely how it happened in 2011. all of these analogies are complications with it. it seems as if the market did
its best to stick to the flat line. oil was the constant weight on it. i don't know that relationship has to stay in place for a full year to come. otherwise, we would be talking about a balance in jobless claims. a worst than ever expected. maybe that's why you have a strength in treasuries this morning. we would also be talking about the fed minutes next week. >> the jobs report. >> there are some stakes on the table beyond plus or minus for 2015. >> it is interesting you mentioned 2011. we came into the last day of 2011 up just over five points. i think the point about jobs friday, next friday, is really interesting. the one thing that we don't know about next year is market investors or stock market investors, is what's going to happen to the economy. is it going to get stronger? is the recovery going to be maintained or do you weaken off
and then you overlay on that whole discussion about what the fed is going to do with interest rates. you come into this jobs report with very strong figures at the tail end of the year. 218,000 is the average for the last three months. remember what's happened every year recently. we have had bad weather over christmas and new year. that depressed jobs and growth. does that mean when we start getting these figures, we get artificially high jobs growth, gdp growth. does that knock into your perceptions of what the fed is going to do. >> don't let that flat line market on the s&p fool you. energy, down 24%. energy stocks for the year, with some beaten up by 70%-80%. consumer discretionary finishing
with a gain. some stocks up 120 and 140. >> the majority of stocks had at least a 20% stock. very tumultuous. remember china. >> the nasdaq leading with apple down. nobody would have said that. >> for more on the markets around what we can expect, let's bring in more views. john stouffer and erin gibbs joins us equity cio at s&p capital i.q. good morning. welcome on new year's eve here. i was interested to see, erin that we have our own survey within cnbc. very pleasantly surprised. the equity analyst that they looked at. they looked on average for 6.8% gain on the s&p. i thought in general people appeared more down beat than that. what's your assessment. >> when you look at earnings growth, we estimate about 7.5%.
now, we are coming in with a pretty high valuations. we are at the top of a two-year range. if the market just grows sort of along with those, any expectations? yes, we are looking at about 7%. >> what a lot of people would say, it is about the multiple or the confidence in the market? we have had gains when we got then. the multiple expanded. people were more confident to pay a higher price for a given earning stream. if the feds, other central banks are removing the comfort blanket in many ways, what happens to the multiple on those earnings. >> we have stayed for the past few years with all the quantitative easing and tightening across the world. the s&p 500 has stadium within a range of 15 1/2 times to 17 1/2 times. you can see that ebb and flow as we have this fear and confidence flow across. i think if we end toward the
year, right now, we are about 17 times, close to the top, we could see that gain. it has been fairly tight. if the s&p 500 gets to 15 1/2, bye. >> the s&p 500 and 15 1/2 is a buy. i would say it is a buy right here where we are right now. >> we think earnings are likely to grow around 7, 7 1/2 point next year. we think the energy patch is likely to improve. we think we are over these down 6.5 that we have seen. we think the bottom was reached around 34. that seems to be a marker for the price of oil when people go, my gosh, $34. this is too cheap. they come back in to buy. >> like many of your fellow
strategists, you were overtly optimistic on the stock market this year. you must be days pointed to see it flat line towards the end of the year. why are you so positive next year? >> we have to say, this looks a lot like 2011. i heard mike mention that. i see a parallel there, a disappointing year. the s&p 500 tends after a flat or negative year to go up in the following year if you go all the way back to the end of 1965. the only six years where you had successive down years were '73 and '74. that was the big bump up in oil prices. the gas lines, as i recall. the other years were 2000, 2001, and 2002. that was tech bubble 9/11 and getting over the 2001 session. otherwise, usually, you have an up year and we also think the fundamentals continue to improve at home whether you look at
jobs, auto sales, housing. you have got cheap interest -- cheap oil, low interest rates. you have wages beginning to move higher. that's a pretty good mix for better things ahead. we think the market will first discount that beginning to happen. we will recognize it further. >> within the market, value strategies have suffered tremendously. what do you think is going to be the case in 2016? do you think that value might cloth close this gap with growth a little bit? >> i think value could close the gap? a lot of people piling into the high-dividend yielding companies. i think value could play. excluding energy. right now, there are some very beaten-up energy stocks. it still looks like they are going to have a rough 2016. i think you have to look at it with value but also pick your
sectors. >> we'll leave it there. have a great evening tonight. enjoy the long weekend. erin gibbs from s&p capital i.q. in the meantime, new year's eve celebrations ringing in around the world. in europe, belgium police have arrested six people in connection with an alleged plot to target the brussels sell pragss this evening. the city's fireworks and festivities have been canceled and major cities around the world are stepping up security ahead of tonight's celebrations after the year that we have had. chapman bell is in london with the latest in preparations in that city. over to you, sir. >> that's right, simon. as you have said, countries have gun welcoming 2016. some of the first countries, new zealand and australia with big fireworks displays. here in london, they are
expecting a big fireworks display. more than 100,000 tickets have been sold. many more people all around london. there will be 3,000 police on duty along with armed police. as you know, in the u.k., police here don't normally carry guns. there will be armed patrols as well. they point out no specific threats to the celebrations here in london. as you said, belgium has now cancelled their fireworks celebrations. six people detained in that country today in addition to two more earlier in the week who were tie to a possible plot to attack the celebrations in the capital of brussels. they following the lead of paris, who also canceled their fireworks displays after their terror attacks there last month. security in paris this evening, there will be people celebrating. however, no fireworks. they will have 11,000 police and
military and other personnel securing the area. celebrations will continue but it will be amid tight security across the continent. >> thank you very much, chapman bell reporting for nbc in london. here on this show, we will speak to the president of the times square alliance to discuss safety measures this city is taking as we get ready to ring in the new year. >> first, still to come on "squawk on the street," herb greenberg breaking out his list of the best and worst ceos and who might be in the hot seat of 2016. >> george lucas sounding off about disney and the new star wars film including some controversial comments. first, a look at the s&p leaders first, a look at the s&p leaders fget beautyrest, posturepedic,
very intimately involved in them. >> and you sold them? >> i sold them to the white slavers that take these things. >> white slavers. he didn't complete his thought. he did say he would have taken a different approach to this new star wars film. listen? >> they wanted to do a retro movie. i don't like that. every movie, i worked very hard to make them different, completely different, with different planets, with different spaceships, with different, to make it new. >> i am sure a lot of star wars fans would be interested in that. the interview aired in conjunction with the kennedy center honors which did honor george lucas in a very big tribute. >> it is one thing to be part of the creative conversation and to say, i would have been more of an individual person. there is a line that you cross where it is disengiingenuous to
people you sold the business to. >> it was a little bit but the reports were that george lucas could have sold it for more. he chose disney and perhaps took less than he otherwise might have made, because he thought it would be in good hands. to me, it is a guy who has lived with this franchise as creator for 35 years. almost nothing somebody else did with it might have been perfectly satisfactory. >> that was the comment, they were like his children. >> star wars is like getting over a lost love. so he is grieving. >> the way the latest movie had been made, clearly, the decision was made to essentially walk directly in the footsteps of the initial movie and make it a very, corporate, this is -- we are going to plant our flag for the new leg of this franchise. it is not the way he would have done it. >> he sold it for $4 billion. >> absolutely. he didn't have the time to do
the next three. nobody was going to give him the same amount of money disney is spending on these movies. >> let's talk about disney. it is closing up the year so far, almost up 13%, which makes it an outperformer. in the last few weeks, it has really shown weekness as these blockbuster numbers come out from the box office. >> disney was one of the blue chip stocks that people were hiding in for much of the year. half the year, they felt there was no way you could go wrong with it. they were inattentive to the va valuation and the risk. >> all these things that seemed to be this playbook that could not fail when it came to disney stock. we had a little bit of a comuppins. there was no way star wars could have made up for that. >> unless the rest of the franchise is super strong. if you were to hit $3 billion or $4 billion for each of those, that would be material. >> it would absolutely be
material. it is much more about the life of the franchise. the market is never going to place a big multiple on any one film's box office. it is considered to be this perpetual franchise, yes, absolutely. >> which is why george lucas is not helpful after you sold it for $4 billion. >> i don't think it is going to hurt the film. >> it will for some people. >> when we return, art cashin's unique perspective on the market as we count down to the opening bell. "the fin the final trading session as we head into the break.
the s&p closed up just 4% positive. can we maintain that or do we erode it to' negative finish? art cashin is with us from ubs. can we paint as a battle for the flat line? in practice is that what will happen today? >> i honestly did say i think there ever people with interest on both sides as we discussed the mutual fund industry would like to eke out a mild plus. there are people with option positions and we're going to have a little bit of a rebound at the close. >> we have really thin volumes. i think it was the third largest trading center of the year
yesterday. wouldn't they have punched it higher yesterday to try and maintain the flat line? >> as we discussed, there is a rather recent phenomenon the last five years where the final two days, down with pressure. people shorting what they assume will see tax selling into the new year. i think there was some of that. >> just to reflect a little, the u.s. bull market for stocks is about 6 1/2 years old. it is the fourth biggest, longest in history. janet yellen was asked at the press conference whether recoveries die of old age. do bull markets die of old age? >> they wear down. it was interesting. you had an earlier guest who was talking about the back to back weakness and he cited a time that was very real and rather painful for me, which was the '73/'74 bear market.
>> i think that will come home to roost. the manufacturing sector is going to have some difficulties. we have to be wary of terrorism, not only physical terrorism but some signs we might wind up with cyberterrorism. that could be particularly painful. >> if draghi doesn't have as much physical information as people think, will that go into 2016? >> i this i that's a perception the market has. the currencies are not operating. if you are going to have that maynor divergence, you would have seen the dollar spike very strongly and the euro come down, that is almost the opposite of what happened. >> the euro has been strong away from the parody that so many
were expecting at 108. >> i would like to be all wine and roses here. i think the first quarter is going to be strenuous for us. >> why? why can we not surprise to the up side here? >> you can always surprise one way or another. doing this for 50 years, looking at the things i normally look at, it looks like the economies on several continents will be under some strain. if the market can ride past that, that will be great. we are still having a problem getting revenues up. we are maintaining earnings through financial engineering. you are not seeing growth in sales. that's going to be a problem. >> it is not very cheerful given the awesome tie that you are wearing today in the spirit of new year's eve. this is a winner. art o. has always impressed us with the ties. >> i hope you imagine to get some. >> i sure do look forward to it. >> have a good new year. we appreciate the service during the course of the year.
you are watching cnbc "squawk on the street." the opening bell, the final one, is set to ring in just about one minute time. i am watching the price of oil, which is down. it has come back from the worst levels of the session, which could be key to see whether we can eke out a gain for the day and for the year for the s&p. >> a little bit of stability. what's been interesting, the past couple of days, even with crude weak, the high yield market has stayed relatively firm. it is hard to know if we can extrapolate that. that's been an interesting dynamic. >> watching the energy companies which were at the bottom of the list again yesterday. i want to show you the opening bell, which is going to ring here in a second at the new york
stock exchange. final poll trading day, s&p 500 stands up 0.2%. can we get a gain the fourth year in a row the fourth year for gains. this will be the first year since 2008. here at big board, ringing the opening bell, phillips highlighting the official lighting. it is all about new year's eve. at the nasdaq, times square alliance celebrating new year's eve. we are speaking to the president about tonight's festivities how they are taking extra cautionary measures on security. looking at the opening action. many you have to watch the w winners and losers. nike on top of the dow. mcdonald's the second best performer. some see that as a surprise given the weaker results of mcdonald's. >> i think mcdonald's is in this class of companies with very
large stable blue chips with high dividend payouts. it has been treated like a 3% corporate bond where it has gone up over the years. i look at kellogg's, kroger, kimberly-clark. no reason they are all beginning with kfrmt"k." they have been working very well because they are reliable. you have the visas of the world that fit with netflix and amazon. people think they have this virtual platform that people cannot penetrate or challenge easily. they are these kind of annuity businesses. beyond those, anything that has to make heavy products and put them out into the world, it has not been a great year. >> the fed has been able to reinvigorate perceptions. that was a huge franchise for the first half of the year. a lot of people were sincerely worried about and a lot of the franchisees were getting really, really aggressively worried about and they came in and were
able to turn around the perceptions of mcdonlgd's. the other one i would mention is starbucks. up over 50%, almost 50%. >> i would put that in my category of platform companies that sit there and are threwput businesses where more volume is great for their margins. >> unlike price line, we spent a lot of time on the technology and went behind the curve on the cutting edge of the business. i am trying to remember what the recent attempt at an acquisition with iac. angie's list of course pushing back. >> i would point out one other mover in the morning. it might be on some speculation in news.
vodaphone up. liberty mobile up. liberty global, a big european cable operator. the market is taking note haof . the fact that the stocks are seeming to get a little bit of a lift is worth watching. >> all 30 stocks in the dow are opening lower. coca-cola is the biggest decliner. apple finding itself in such an unusual spot this year, which is underperforming the nasdaq and technology. s&p up 6% and am before today's session down 3% for the year. this was the year all the apple's, including all the analysts, which are sticking to their bullish forecast in the face of weakness are worried about iphone growth and the next new product. by many accounts, the watch as a flop and so are some of the new products. they just didn't get into the mainstream. >> i think that is all true. i could also tell a story this stock is digesting a 75% run in
a single year up into the spring. essentially, we are creating reasons why it is settling back. it has huge spirts and takes some time off and does not acts a bellwether for the overall market. it operates on its own clock. >> that stock clearly has a momentum of its own as far as hedge funds are concerned. if you don't believe, if they don't believe that apple is going to rise, for example, amazon has been the gift for many mutual funds so far this year, those that are ahead have heavy positions in amazon, which has continued to gain despite the valuation arguments and others like netflix. apple's stock is one that is so big. it requires so much buying arguably to keep it up there in a general sense that it can fall quite rapidly. as we have seen it in the past year, it bounced back. we went through this two or three years ago.
everybody was throwing in the towel it appeared and wush, you are off to the races again. it is always a gain of expectation. even when apple puts out great earnings and doesn't show weakness about china. everybody is worried about the economic environment. >> i have had a pet theory about apple for a while. the market doesn't quite know what to do with a $600 billion company where you have to handicap rapid unit growth. >> you can't price what's in the pipeline. you have no idea what it is. over time, as they grow so fast, the value has to be dragged up. >> we have to do a shoutout to the best performers in the s&p 500, netflix and amazon, up 122%. you have to wonder what next year will look like for a company that has grown so strongly. it has shot to the forefront as
they started reporting those results. >> the sceptics capitulated. largely, it was because of the cloud business. to say this company can never earn a proper return. >> you just leave it be and surrender and load up for the new year. >> bob pisani is on the floor with what else is moving on this last trading day in 2015. good morning. >> it is groundhog day. oil is smacking the markets around. take a look at oil at 6:30 this morning. it happened yesterday. oil drops and take a look. even europe dropped. most of europe is closed. look at france. right around the same time, you saw the drop in oil and france dropped. you see what's going on there. the same thing with u.s. futures here. we were either side positive or negligent n negative basically.
you see us opening down right now. as for positive or negative on 2015, we have essentially gone negative. these numbers nor tfor the s&p there you see materials, energy, financial and health care all to the down side. as for the year, s&p just went negative for the year. put up some numbers here. this is just prior to the opening you are looking at. the point is, it depends on how you slice and dice it. if you look at the broadest possible way, it would be the russell 3,000, the 1000 and 2000 together. we are down a fraction more. the ipo market, a lot of winners and losers in 2015. mostly more losers than winners. some of the big winners were godaddy and fitbit. great numbers at the end. fitbit, great orders. big movement in the app store. a lot more losers. a lot in specialty sectors like etsy, fogo de chao.
then, there were the leftovers. the big one was albertson's, soul cycle, univision, neiman marcus and mcgraw-hill. the leftovers. the biggest in 2016 is going to be tech. more public ipos i'll bet are going to happen. a few that filed nutanix, a big cnbc disrupter, the second company on the disrupter company to go public after square and pure storage. we also had a cybersecurity firm, secureworks, a dell subsidiary. the big equity ex complaining has all filed. all of these could happen very soon. nutanix and secureworks could potentially happen in the next couple of weeks. we will keep an eye on that.
a lot of maybes that are floating around out there. there is a cloudera, that is social finance. >> a lot is going to depend on the market conditions and the state of financing. i wanted to mention about what might be going on next week. we asked our friends what happens in the beginning of the new year. some restaurants, notably outperform the overall market in the beginning of the year. this is the first day of next week. the s&p is up 0.9% on the first day of trading in the new year. restaurants doing a little bit better. not so the stock market down 98 points right now largely on oil.
>> some people pay $400 to go to olive garden tonight. >> good morning, rick. >> good morning, mike. it has been a fairly active range towards the end of the year for treasuries even though the volume may be on the light side. that doesn't change the significance, in my opinion. let's look at a year to date of five-year note yields. we are making new highs going into the end of the year as we came very close to the 180 level. granted, it is the highest yields going back to september of last year. i'm going to take you back to september of 2010. you could see that there is a pretty open field should we start to clear this zone, which is very much a symptom of the fed and the short end always grabbing into the notion that normal zation of rates has been well telegraphed and anticipated. look at intraday of tens. they are giving back a little bit, not much, year to date on
tens. there is a lot of wood up here. settle at 217 last year. the high yield for tens was made the second week in june, a whisker under 250. if we look at what's going on with regard to the dollar, it has had a good year. i really like opening this chart up to 20 years. if we start to clear 100 on the dollar index, it really also has a pretty clearfield and if we look at the last chart, the dollar versus the yuan, lowest on the yuan, highest on the dollar and it makes extremes for the last month going back to may of 2011. sara, back to you. 20 plus higher on the dollar against brazil and russia. cities around the world rings in the new year. security is the top concern. brussels canceling their new year's eve celebration due to terror threats. moscow's red square will also be
closed. what about new york city's security plans. the president of the times square alliance, tim hawkins. welcome. >> good to see you. tell us a little bit about how the preparations this year differ from previous years? >> first of all, the nypd makes times square safe all year-round. they do an amazing job. never more so than on new year's eve. we heard the other day from mayor de blasio and commissioner bratton, they are adding some extra, 500 to 800 extra officers. they all do airport security for the people entering in times square. it is one of the safest places on the planet because of that. lots of people you don't see are watching to make sure things go okay. >> there is a lot of fear about public safety this year. are you expecting the same sort of crowd? what kind of numbers are you looking for tonight? >> we usually get about 1 million people when the crowds
go up to central park from times square. 1 billion watching around the world. whenever the world seems a little crazy and people say, we have to be afraid and change our way of life. people seem almost more determined to make the pilgrimage to times square and celebrate. no matter how crazy the world is, i'm going to celebrate the people that i love and the things that are good in life no matter what. people are even more determined to do that. >> tim, the world is changing none theless. i wonder as a set of business people, which effectively you are, how life is changing for you. just yesterday, we were talking about how toys are us is going to leave the square. the rents are so high. clearly, there is the added security concerns that you guys have to deal with all year-round. times square is times square, 365 days of the year. i guess you guys have to grapple with that. there is this whole question of the public nudity which in the summer became a huge issue and a
view that maybe it was getting more seedy there and the rest of the city should strike back. where are you as a group of business people? >> the interesting thing about times square, the problems we have right now are some of our problems of success. we are building out these amazing pedestrian plazas, because more people are coming to times square than ever before. we had some problems with some people that were taking advantage of tourists. we are going to get a law passed to deal with that. yes, i'm going to miss the ferris wheel and toys "r" us. just like capitalism and new york city, there is always something new that is going to entertain people in a new way. times square is synonymous with entertainment and market forces that are bringing new ways for people to entertain themselves and enjoy themselves whether it is new year's eve or the experience of being a great urban place. >> briefly, if you would, would you support the
depedestrianation, which is a big issue. >> we think it is incredibly important to have space for pedestrians. it is a green solution to prioritize pedestrians. not toe say there aren't cars but to prioritize pedestrians and make it a great public space for the entire world. >> good to see you. thank you. >> you can always pay $400 at olive garden let's get out to rick santelli in chicago. >> the last read on chicago purchasing manager survey is the december read, is a big miss. 42.9. so get this. this makes seven out of 12. seven out of 12 under 50 and this particular number is the lowest number since basically the fourth of july, 2009. so not a very good read.
when we look at this number and it is following a 48.7, what jumps out at me is the best read of the year was almost 60. 59.4 in january. other than this number, the lowest read for the year was then followed in february at 45.8. we make the new low going back to '09. we are going to have a representative from the org beg anization that puts this together. this was a surprise from the last day of 2015. back to you. >> fresh when we come back to work next week. >> in the meantime, after battling for the title of top performing nasdaq 100 stock of the year, netflix and amazon engaging in a different kind of showdown. we will look at the straeaming war and what's in store for 2016. ♪ and then santa's workers zapped it right to our house.
who would have guessed some months ago that we might close out the year at $36 a year. >> oil prices under pressure this morning, coming well off session lows, about 36.50 for wti. just turning positive. they are just still trading around parody. watch these closely. not a lot of conviction at this point in the trade as we head into the new year. things could turn around. we could get a little bit of a rl rally heading into the close. for the year, oil prices down more than 30%. a very dramatic decline. the saudi budget for 2016 basing its assumptions on $29 oil. if that were to happen, this could be another 20% drop from where we are right now. net gas is another story today. selling off yesterday. bouncing back up ahead of the inventory. the weather is part of this
story as well. the theme for commodities has been volatility. traders are telling me they expect that to continue into january. sarah? >> thank you, jackie. >> still to come, herb greenberg with his list of this year's best and worst ceos. keep it here on this final trading day with the dow down 112 points. we'll be right back. announcer: it's time to make room
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china was the best performing market in asia. riding out solidly in the green. a positive 2015 for japanese markets. the nikkei in japan finishing above 19,000 for its highest year-end closing price since 1996. stocks are getting a boost from the bank of japan's pretty aggressive asset purchase program. and, right now in tokyo, they are just a few minutes away from ringing in the new year. as we get ready to say happy new year in jap, guys, the japanese yen weaker for a fourth straight year. the japanese exporters loved that. that's what helped the market. it was only about half a percent
weaker. strategists are pretty bearish on this currency. >> it is one of the most telegraphed policies in the world. strategists bearish, everyone seems to be bullish on the equities. it seems like another favorite hedge fund trade going into the world. you said it was a high since 1996 in the nikkei. only 50% higher to get to the 1999 high. >> $660 billion as to how much the bank of japan is buying. as you were mentioning, as to whether they will run out of bonds and whether the pension funds will keep selling to them. that's an open question as is the rise in the consumption tax next year. apparently, it is still on track. >> the economy continues to l g languish. this qe program is helping but they have to figure out a way to
stimulate growth. >> the bigger issue next year will be the yuan. we showed the dollar yen for example for a lot of the japanese. it would be about whether yuan is trading. china is a question no matter what. what we saw this year was that china matters to the u.s. stock market. wed a 10% correction off the high in august because of china. the fed waited on its interest decision. this is going to be a question. >> did how much it matters peak at that moment? >> we have kind of loosened the relationships. >> we want to show the tokyo new year's eve celebrations when we return on cnbc. the big business of returning gifts.
it is not just new york. we are going to keep an eye on that shot obviously. with the markets down taking away some of the new year's cheer. the dow down, 85 points. the s&p interestingly in the red again for 2015. >> as we count down to the tokyo celebration, sara will now wish you a happy year in japanese. >> i don't want to mess it up. it is a very difficult language. pass. santelli, did we stump you? >> you did in terms of multilingual happy new year's wishes. >> we work our way up through china in the next hour as well. let's get to our road map for the next 60 minutes here on cnbc. the last trading day of the year. how should you set yourself up for the new year?
the other side of the holiday shopping season. the returns, just how big the business of returned goods is. we will be joined with the best and worst ceos of 2015. who could be in the hot seat next year? >> on this final trading day of the year, we start with the markets and they are right across the board. we want to know if it means anything for investing in 2016. larry mcdonald, head of u.s. strategy at societe general. also with us, we have paul christopher head of global market strategy at wells fargo investment institute. larry, you have been cautious, warning about some of the problems bubbling up in the credit markets. clearly, it has been volumes and it is light trading on this final day of 2015. does it foreshadow anything about the new year. >> mike santelli was wisely talking about crowded trades. central bankers around the world
are feeding these crowded trades. one of the most crowded trades and perspectives heading into 2016 is the perspective that the fed and the u.s. economy are going to drive the policy path. i think that's very poly anish. credit risk drives the u.s. economy. that's what investors should watch. >> isn't it only a problem if oil prices weaken further? we were talking about the stabilization? that has really been the driver, isn't it, larry? >> absolutely. remember, the economists keep telling us we're going to have five to six rate hikes over the next, say, 12-15 months. that means a stronger dollar. that means weaker oil, weaker commodities. we are in this conundrum where if you really believe the fed policy path in higher rates and
stronger u.s. dollar, it is going to drive energy prices lower and create more credit risk. that's the conundrum and what we face. >> almost any asset class you look at here outside of energy and some of the currencies has done very little in 2015. how do you think we are set up as an asset allocator. >> that was to paul. hang on, larry. >> the volatility of last year we think will continue into 2016. eventually, that cvolatility is going to create opportunities. we think that industrials will do better in '16 as the economy settles into a firmer path. we think some of these credit risks will go away sensitive to the unemployed about the dollar strengthening. there is other impacts too on credit risk and on oil prices. that's going to come as
production gets cut. with that we think will be a stronger impact than rising interest rates and the strength of the dollar. we could see actually some improvement and some opportunities in credit markets going forward. >> larry, let me come back to the point. i mean, when you started this conversation, you laid it out there. you said that credit risks could drive the markets. what do you actually mean by th that? >> first of all, it is going to drive the fed policy path. the market is expecting four to five rate hikes over the next 12-18 months. the fed could be derailed by credit risks. >> for people sitting at home, what do you mean by that? are you suggesting that we are going to have like corporate bond yield spikes substantially higher? do you think companies will be going to the wall. there is an argument that one of the reasons the feds actually raised rates despite it won't meet the target. they realized that zero interest
rates were doing no good for the economy overall. >> if you look at brazil five year cds, this is a major country. if you look at, say, petrograss five-year cds, glencore. peabody. you have a lot of different companies that are in financial difficult and stress. that stress in the markets contracts credit and it can force the fed not to hike rates in 2016. that's what happened in september. >> you are going as far as to say we won't get full rate hikes in the fed. they will be concerned about visible blow-ups. you are the head of u.s. strategy. that seems like a huge statement to make. >> that's what happened in september a year ago. 80% of u.s. economists told us they were going to hike, the fed was going to hike in september or june and they didn't hike. so credit risk has derailed the fed. here is the bottom line point.
if you are at home looking for ideas. in 2014 and '15, you are better off sitting in the boat with cash and putting money to work into moments of fear. in october, 2015, the s&p was down 10% if you bought that fear, outperformed the market. this year, if you stayed in cash the entire year and put money to work in september or august, you outperformed the market. that playbook is probably going to work again in 2016. >> i want to bring it back to the stock market, which ultimately is earnings. analysts are expecting a double digit recovery in ernlarnings. >> we are looking for aly bit more modest increase in operating earnings up to $130 per share next year on the s&p. there has been so much negative sentiment, so much pessimism. there might be room for a little bit of multiple expansion as well. we are still looking for the s&p
to finish next year, 2230 to 2330. a decent year we are looking for in the s&p next year consistent with a steady but solid but unspectacular year in the economy. >> thank you very much, gentlemen. for your outlooks. larry mcdonald, and paul christopher. >> up next, the holiday shopping season might be over but the major return season is just getting started. we are going to look at the booming business of unwanted gifts. essentially, we will meet a guy who buys returns from the big retailers for cents on the dollar when "squawk on the street" comes right back. this is the one place we're not afraid to fail. some of these experiments may not work. but a few might shape the future. like turning algae into biofuel... ...new technology for capturing co2 emissions...
welcome back. a strong holiday season. the apple watch. that growth. joining us, matt mcclintock who upgraded fitbit. tell us the thesis on the upgrade. the stock had a tough month heading in. >> the thesis on the upgrade back in november was the story was becoming too compelling. this is the fastest consumer growth story in the world of any meaningful size. it is growing at 150% plus growth rate. we see a long runway for that
type of growth for this story. when you think about fitbit, this is more than a consumer electronics company. this is a health care company. there are a lot of health aspects of this story that we find are too compelling that we think can sustain the story of the growth rates. >> a lot of chatter has centered around the potential threat from the apple watch or other devices or whether fitbit is this transitional technology that will get embedded in other devices. the real key is how big it will get. >> wearable technology is a category overall that can grow to reach hundreds of units per year. we are looking at 25 to 30 million per year that are shipped in the u.s. that can go to the hundreds. when you this i about the overall opportunity, it is very large. as this technology becomes
evolved, as it evolves, it picks up more features and becomes more meaningful to the consumer, it could ultimately become a part of your everyday life almost where you cannot avoid using it at all. when we think about fitbit, itself, they are the largest company in wearable technology. they have roughly 80% market share. there market share is increasing despite the launch of the apple watch and the threat of new competitors that have come into the market. they are gaining market share. when you talk about apple specifically, if you look at google trends, activity, people search more for fitbit than they do for apple watch, which we find certainly an interesting data point. you clearly lay out the bullish argument. the stock used to trade at $51. it still trades at $29 but it is a $6 billion company. a lot of what you are suggesting is clearly in the price at this
depressed level. >> i think that's really interesting. what's in the price. i don't think a new product launch is embedded in the current price at $29. we believe they are going to launch several products in 2016. they could launch a product as early as next week at the consumer electronics show. we think that that type of runway that could come from a new product launch could actually sustain growth rates that go into the hundreds of percents for next year. right now, we are only modeling 30% growth of next year and the street is in line with where we are at. there is massive up side depending on the success of the new products. their history of product launches has been quite success if i have. we believe that. that history will continue in 2016. when we look at the stock at $29, we think it is too compelling. >> you are asking people to buy something on a complete unknown.
you are asking people to buy on a product that you don't know or know when it will be launched. >> i am asking people to buy the most knowledgeable company in the world. this is no different than people buying apple on the hope the new iphone or ipad or apple watch, et cetera, continues to come out and be innovative and successful. fitbit has a proven track record of success. their brand is the most dominant brand in wearable technology. this is a solid company for this category. >> matt mcclintock at barkleys. two fitbits made their way into my home this holiday season. thanks very much. >> i bought 12 of them for my relatives last year and only one is using them 12 months on. clearly, a very busy time for holiday returns with nearly one quarter of online purchases from companies like amazon and walmart expected to be returned
to the retailer. our next guest is in the business of buying those returns from the retailer and then selling them off. his peak season is just beginning. we welcome to the program michael ringleston, president of shorewood liquidators. it is nice to have you here and nice to learn more about the business that you are in. what do you actually buy? >> we buy store returns from amazon and home depot, primarily. how do you buy them? do you know what you are buying? are you buying truckload of good it's? >> the retailers manifest the items for us. we know what we are buying up front. we pay a percentage of retail is how it works. they will say, i i have a truckload of goods and you pay them $300. >> essentially. >> the dollar amounts are a lot
more. usually, trucks range around $100,000 depending on the categories. we would pay 5% to 20%. >> why are they selling them to you and not unloading the trucks and putting them back on the shelves? >> they are not allowed to put them back on the shefls for resale. they have to be liquidated off or returned to the manufacturer. returning to the manufacturer it creates a logistic problem. if they can sell it for 5% to 20%, it is almost straight profit. they would rather liquidate it off and do what they do best, which is retail. >> i think you have two warehouses outside chicago at the moment. you have 90 employees this holiday season. what are you actually engaged in now? physically, what are you doing? we are a processor.
we sell on our online platforms. as you just saw slide by.com and in the holiday season, we will wholesale off to smaller companies, flee marketers and whatnot. >> this season, what are you seeing in terms of returns? where are the most returns coming from, which retailer? >> amazon would be our largest account during this season. obviously, in the summer, home depot would be providing more. is there too much. offer board is blowing up and you are stuck with some of that. >> sure, that happens. we have channels that we recycle products like that. with he don't resell them on the market. we have deals. they take anything that's like that.
most of the time, it actually stops at the retailer's level. it doesn't even make it to us. how deep are the discounts? >> 45% to 50% range. it is good enough for the retailers to continue to deal with us and great savings for the consumer. >> michael, where do you think your industry is going? e-commerce is about 14% or 15% of the roux etail market at the moment. amazon is catching with its growth. half of the growth within e-commerce. where is your business in five years time? how does your side of processing this grow? what does it look like? what's the landscape like in five years, do you think? >> in five years, for my company, we would be processing more. a lot more emphasis on data for
technology. right now, we have downstreaming. we wipe customers data. it will be more of that going into the future. a lot of these retailers are starting to want to do this recommerce on their own. best buy is a good example. they do what we do for their own products. they don't liquidate at all. >> it has been a pleasure meeting you. >> it was my pleasure. >> michael ringleston joining us from shorewood liquidators. >> when we come back, media stocks having a rough sec half of 2015. all the big names seeing significant losses as cord cutting gains momentum. what's ahead for the new year. pf the bre before the break, a look at this year's dow winners. we'll be right back on "squawk on the street."
playbook. we are looking at the entertainment industry. here is julia boorstin. >> in 2016, the media industry will undergo its biggest transformation yetle toing in the footsteps of hbo and cbs. all the big players will find new ways to bypass cable and satellite tv companies and offer their content directly to consumers via apps and to make it easier to navigate all these new options, look for new bundles of digital video from amazon, hulu and apple. they will feel growing pressure to hold on to consuming revenues. expect more consolidation among media giants with john malone looking to receive skate. and viacom and cbs looking to be up for grabs. technology looking to take off as oculous takes off.
holiday game and virtual reality will introduce a range of experiences grasping for a piece of the $150 million v.r. market. another area to watch is mobile. carriers will become mobile tv providers investing in video and providing their own content bundles to help differentiate their services and compete. we'll have more coming up in "squawk alley" with a look at t-mobile's battle with youtube over its mobile video offering. >> thank you. see you in the next hour. julia boorstin with her predictions for next year. sara is also breaking out her own playbook. >> from last year. we need to be held to see if our predictions were right. i made some predictions on consumer staples and products. >> i imagine you were right. >> not so bad. an interesting look back. last year at this time i predicted we would see a recovery at the low income level in wages. this was partly true. we did see a wage recovery.
it didn't help all the companies i meb chund. certainly, didn't help mcdonald's but did walmart and png. you could argue they have their own problems. >> and they have to pay their people more. raising their own employee wages was an issue. >> pain abroad. this was a currency product that we would see a stronger dollar for a second year in a row particularly against some of the asian currencies like a slowing chai sna. that had to be one of stories of the year with the dollar up 8.5%. 20% against the euro and places like brazil and russia, the ruble. >> it certainly capped their earnings growth. yet, the stocks themselves did okay. people were after very stable companies. >> now, here is my favorite prediction that i got. this was the m&a story of consumer growth. because of slow growth and the need for cost cuts, they would
bulk up. i mentioned we might see a sequel to the heinz deal. guess what? in march we did see a sequel. they bought kraft for $54 billion. that was part of the record year for m&a. we will see if that leads to sales growth. we were talking about hormel. best performer of the consumer staple. >> we will be getting another sequel. >> people think we might eventually. it is going to take a while to integrate these two first. >> energy, by far the worst performing sector of the year. will there be a rebound in 2016? we'll talk to an energy portfolio manager. some hedge funds suggesting that this is really the deal for the next three or five years. monday, after the long weekend, an exclusive interview with the san francisco fed president, john williams. one of the biggest questions for
next year is, what will the economy do and how will the fed react? random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.
good morning, everyone. i'm sue herera. here is your cnbc news update. the rain may be over. the flooding is getting worse for parts of the midwest. more highways are being closed as waters continue to rise. the mississippi river is expected to crest later today. that flood willing has killed 21 people and caused widespread
evacuations. more terrorist arrests in brussels where authorities have already canceled new year's celebrations. six people are in custody after a series of raids across the city. other person was also arrested and charged with terrorist activity in connection to last month's paris attacks. 21 passengers board an air canada flight headed to toronto from shanghai were hurt after that plane experienced heavy turbulence. this woman describing the terrifying moments. >> it was just like you would in a roller coaster. the plane was just go down very extremely and lots of screaming. >> the injured were taken to local hospitals. all are in stable conditions. >> it is already 2016 in many parts of the world, specifically asia. basically, the celebrations taking place in capitals around the world. there, you see australia.
beautiful fireworks. wonderful. 2016 in australia. that is the news update this hour. let's hope it is a good year. jackie, back to you. hi, sue, welcome back. we are waiting for the department of energy to release its energy report on natural gas. i can look at price action and tell you, it is a little bearish. we were trading at 235. nat gas has gained about 15% in a weak. a little resistance in this trade at 237. i think that was the high we saw the other day. if we breakthrough that, one expert telling me, with he could see a 40% pop in that gas. colder temperatures are coming. that's what traders are looking at, the ten-day forecast. not seeming to move the needle through the resistance point. this 232 mark is probably where we are going to stay. waiting for that number to come
across. as soon as we have it, we'll put itten o the bottom of the screen for you. >> interesting to see a turn-around in the last few minutes. nymex prices are positive. >> we talked about that earlier. there was a possibility we could see this crude rebound as we head into new years eve. i'm not surprised to see this action. >> not doing a lot to help the stock market with the dow down 150. we'll keep an eye on it. energy is the worst performing sector in the market this year. what can we expect going into 2016? >> eric nuddle is a portfolio manager. >> with crude prices down more than 30% this year, as the pan jury of an energy-focused fund, how did you fair? >> it was a pretty terrible year. i am excited when i look at 2016. it seems like everybody is
competing. whether it is going to be a $20 oil or 15. the interest in oil is near record high. i can paint a scenario where the oil market is undersupplied and there is not many talking about that potential income. >> when does that happen? what is the thesis there? >> i think it is going to be about a q-4, 2016 event. we all know that iranian barrels are likely to hit in q-1. with he know that refineries could go down. when we look at 2016, if demand in 2015 increased by 1.8 billion barrels per day, the strongest piece of growth going back in six years. looking to next year, the current oversupply is estimated at anywhere between 1 and 1.5 million barrels which in the context of a 95 million market is not that great. my thesis is that the current oversupply will be worked off but by year's growth in demand. the decline in u.s. production as the u.s. producer. production has already fallin by 400 barrels per day. by q-2 of next year, that
production level will be down by a further 500 barrels per day. that matches all of the barrels that will likely be coming john stream from iran. we know that it was down $200 billion. that was the biggest drop in history. that will be down another 20%, 30%. it will be the nonopec, non-u.s. barrels that will lead to an undersupply. >> we have heard from before from some energy bulls. you run an energy fund and that would be helpful. >> looking out to 2016, i am effectively fully invested, because i really do think the risk has swung from being invested energy stocks to not being invested energy stocks. i am buying names that have fallin by 80%. when you are down 80%, you can easily double and you are still down 60% from the highs.
>> eric, kyle bass, who many will remember made half a billion dollars betting against subprime mortgages has given an interview to another tv network in which he suggests that now is the time to buy energy if you are on a three to five-year time horizon. you should commit capital now. if i believe what kyle bass says and i am sitting at home and i want to commit for the next three to five years, what do i buy? what do i know will be there in 3-5 years time and will be a sure bet? >> the best risk to reward opportunities are buying those named that are perceived as being overleveraged. as oil recovers, the perception will swing from the balance sheet problems to the missed pricing. bay tex energy as i referenced. everybody is concerned because debt at $35 is very high.
this is a name where there is no debt maturity until 2081 and given that it has fallin 80, it could potentially double that year and that oil will rally into the 50s by q-3 or q-4 by 2016. >> do you have a safer bet, a slightly less risky mid-stream bet that people could go for? >> i don't focus op the mid streams. they have held up much better than the rest of the energy complex. if one was looking for a safer bet, my largest holding is a name called crescent point energy. we sell in u.s. dollars and we are getting a 39%. a name like crescent point gets a huge uplift in the oil and their plays rival the top plays
and they are trading at two-thirds of the value of many of the premier perceived elite u.s. title oil names. >> eric, your basically saying the opposite of what a lot of generalists are saying, which is look for the really good balance sheets and the companies with the great acheage. the ones most leveraged to the commodity prices are the way to go into 2016. >> i do. i don't think they appreciate math. the world is declining at about 8% per year from natural declines. we have the largest drop in cap ex in history last year. that is going to get worse looking out to 2016. u.s. production is in free-fall. the areas of production growth this year being iraq and saudi arabia. they are producing near maximum operational capabilities. today's oil price up 40 or 45, the entire sector is bankrupt. it is a question of how long, whether it is quarters or years. >> eric, thank you for joining us. what is sure to be another big story in 2016. we just got the word from aaa,
restaurant linked to a neurovirus outbreak that sickened more than 130 people earlier this month. it has put pressures on shares this year. the stock is down 29% year to date. back to you, simon. >> thank you very much. let's send it down to rick santelli, last trading day of 2015. rick, what are you focused on? >> we're focused on the last trading day's data. chicago pmi headline number, about he low 50 by quite a bit since july of '09. that made 7 out of 12 below 50. we have the expert. she talks to the respondents. headline number down 5.8. 7 out of 12, below 50. 42.9. any comment on that part. a real disappointment of the year. we average this year at 50.4 and 60.7 in 2014. that gives you the scope of where we are. the story of a strong doll are a.
weaker commodity prices. >> not only is it below 50. below 40. >> new orders, production, employment. what's a company to do, right? you have bodies. you have bodies coming into the last month of the year. you know your new orders are low. demand is weak. this isn't the greatest picture to go into january. it is minus 17.2. how much are they working it through? >> these are numbers that we haven't seen since 2009. the strongest number was the first. the weakest is the last. let's talk delivery. >> this is peak season, the
lowest in six years. we are preparing for things like chinese new year that comes on february 8th. >> this is a bit of a shocker. everybody says, there is no pricing pressure. i say, if there is no growth, there is no pricing pressure. here is an interest, where prices paid jumped 5.1. what's the culprit here? what i'm hearing from the purchasers, there is going to be price increases. they have done their consolidation. there are fewer players and prices are going up. >> the dark side to m&a. >> the special question was, what do you think your demand is going to be in 2013? 55% of our survey respond dents sa
said it is going to be up. >> if i recall, they were really optimistic. same scenario. they were dead wrong. >> they had been wrong all year. every month, we had asked them, what do you think your demand es going to be. they kept pushing it out. they pushed it out to quarter three. we were hopeful it never came. we did get that big bump in october. november and december have been a huge disappointment. we are below forecast on revenues and sales. >> if we had to summarize this up in our last 40 seconds, what should we learn? obviously, anybody could be wrong and they were optimistic. we finished off the week. manufacturing is most likely going in recessionary direction. what does that mean for the overall economy? any ideas? >> one thing we are looking at, we are having a little bit of an inventory correction. we are stuck with a lot of winter goods. you go in any store. there are tons of coats, mittens, hats and gloves. people that move the snow and all that, they are up to their skis in salt. there is no reorders.
retailers the weather was a big issue this month. i can't tell you how many times guests say, too cold, we are not doing well, too warm, we are not doing well. thank you for all your time this year. happy new year, sarah. is back to you. >> and to you, rick santelli. >> thank you very much. >> up next, herb greenberg joins us with his list of this year's best and worst ceo performance. "squawk on the street" will be right back.
as 2015 comes to a close, there are clearly some ceos that appear to have performed better than others. here with his list is herb greenberg, partner at pacific square research, a cnbc contributor and more importantly, the widest man in cnbc that operates out of san diego. where do you want to start, herb? >> thank you very much, simon. i'm not going to go the traditional route. everyone thinks you should have marissa myers and others. number one on my list is brian kelly of pure green mountain. that may be not surprising to people that have seen me talk about this company forever. the company is getting acquired for 90. get acquired from $92 this
share. a huge premium by a company called jb holding. i have to tell you. in the end, it comes down to execution. brian kelly has misexecuted with the transition of the keurig, 2.0 and the creation of the 2015 for the s&p 500 to wruns it got bought out. remember, it surged 80%. they bought it at quite the people wrum. i want to say one thing, that is if you look at the stock chart from keurig, gmcr, if you read the prospectus that they put out during the sale, there were a number of attempts by a mystery buyer. they don't name names. they haven't been able to figure
it out. starting from when the stock was above $100 all the way down to where it hit $r50 where they did not take this. i wonder if that sort of -- if you can add that to your list of complaints about mr. kelly. >> look, you could look at any -- there are companies -- there's companies that -- if you say the acquirer is a public company, a short sale would go short that company. look at men's warehouse and swroes ef a. bank. classic example. you can take a look at people wanting to get in there for whatever reason. honestly, i'm looking at a failing business with misexecution. i'm going to put that on the top of my list. no way around it. we can argue any which way. >> i just want to get in the -- reid hastings, netflix, jeff bezos, amazon, starbucks. a lot of people would pick those out. let's go to the ones that you don't like again and kick some
more tires there. >> pier one imports. pier one imports, alexander smith. this company -- we had highlighted it as a red flag back in february. the stock was -- the market cap was over $1 billion. now it's $400 million. this is a company where the cfo was the scapegoat. he was kicked out. in the end the buck starts and stops with the ceo. because this company is off everybody's radar and no one is talking about it, i say alex smith is on the worst list, and he can say and they've said that this is all about, you know, retail, the customers in retail. look, they misexecuted all the way along as if they were making it up as they went along, and instead of getting better, it's gotten worse. >> what were the other options for pier one? i mean, if you don't have to gamble at e-commerce, what should they have been doing? >> what should they have been doing? they tried to go -- i think they were stuck. i think their aesthetic was wrong for the marketplace, and i think they basically were between, you know, a rock and a hard place, so to speak.
i don't know what they could have done. it was like -- it's an old concept. you go in the stores, and they're forced to transition on-line with a concept that does not translate well on-line. i think there was very little they could do. although you never know what a different ceo might have done. by the way, alex smith got a lot of credit a couple of years ago for turning the company around, but once you turn it around, you got to execute and pull through. i also want to point out one other person, ken mcdonny. it's an itt -- he has agreed to resign in february because the company is under s.e.c. investigation. cfpb investigation. they've got a lot of things going on here. i want to tell you a quick story. back a few years ago when i was with cnbc full-time, i interviewed kevin on cnbc, and when the interview was over, we could still hear what the cameraman was saying in indianapolis. cameraman said, hey, how did that go. kevin said, well, i got what i
wanted. he didn't get what he wanted. well, there's such a thing as karma, and in that case you could spin these things as much as you want, and, by the way, in the end he didn't quite get what he wanted either. >> all right, herb. on a roll. i do want to go back to the winners because reid hastings of netflix, jeff bezos of amazon. they happen to be the two best performing stocks in the s&p. that's not necessarily why you put them on the list. you are talking a lot about execution. >> it's about execution. i actually -- reid hastings was on my worst list a number of years ago, and that was because of that horrible misstep they made when they were transitioning from dvr to streaming. look, it's been in my crosshairs for a long time because the stock -- it's because you have the difference between the stock and the actual execution. reid haightsings, from the beginning of this company through now, he has reinvented this company. he has had some missteps. he has moved ahead. some people would have fallen flat on their face with the misstep he had at one point in
time. he just kept moving along. you have to give him big credit for execution. you also have to get -- jeff bezos, among retailers, i know it's obvious, but among retailers, he is just -- the execution just keeps continuing. as a customer, we all know that and we all see that. i also want to bring up one other person, and that is ron mcmullan of kroger. kroger is such an enormous -- execution is so tremendous. there's a ralph's store. it's owned by kroger out here. there's a ralph's store near me in del mar heights near del mar. before i moved out east and since i came back, you know, we've been talking years here, the execution of that store is so tremendous. you watch how they compete against whole foods. this is what you are looking for from a great ceo. it's execution. >> they've been rewarded too with the stock up 30%. cincinnati's finest. >> herb, just before we let you go, can you actually see the sea from where you are? i'm fascinated by the live shot
you've established in your front room. we all think about what we might do in 2016. can you see the sea from there? you just turn away and run to the beach in your shorts? >> you know what, the sea -- the sea is four miles due west of me, but it doesn't matter because i still get that great salt air corroding everything around my house. >> still living the dream, mate. in tv terms. thank you very much. herb greenberg joining us there from san diego. now, closer to home, starting this monday our own sarah eisen will join wilfred frost co-hosting "worldwide exchange." sar wra is here to tell us about the new show. >> 5:00 a.m., everything you missed overnight. everything you need to know for the u.s. trading day. there is another british man in my life, simon. wilfred frost coming from london. it's going to be what's trending, what's buzzing, and more importantly, what's moving in the markets now and what we expect for later in the trading
day with some great tidbits, facts, and talkers so you can be smart for the entire day. that starts monday. >> i just tune in at 5:00 and you'll tell me everything i need to know. >> resolutions -- >> just in time for the resolutions. >> wake up earlier. don't have to wake up at 3:00 a.m. with me, but definitely at 5:00 a.m. coming up here on "squawk on the street" -- which, by the way, i'll still be here as well. >> get it in now because there's only three more days before she gets up at 3:00 a.m. daily. good luck. >> here on the show we're going to tackle the outlook for the ipo market, which is pretty sleepy this year. what about next year? squawk alley coming up next.