tv Closing Bell CNBC January 11, 2016 3:00pm-5:01pm EST
the dow now down every day in year. this year sucks. >> so far. we're still early. >> so far. >> top of the first inning, brian. thanks so much for watching, everybody. >> "closing bell," big hour, starts now. hi and welcome to the "closing bell," everybody, i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. yes, a big hour coming up. early on it looked like the bulls were finally going to have their day today, the dow did open 100 points higher, but then the major averages lost those early gains as oil prices fell again. this time wti below $31 a barrel. it hit $30.88 at one point and since just the oil price itself, energy stocks across the board are deep in the red today and now some market analysts are calling for an earnings recession as we get ready for alcoa to report tonight.
we were going to look at whether stocks will be able to get off the mat anytime soon. >> here is another one, biotech also getting hit hard after a ton of news at the jpmorgan healthcare conference in san francisco. we have the ceo of biogen about his company's pipeline as you saw that sector today, bill, down 4.5%. we will talk to biogen coming up. over the weekend protests in germany that could be very bad news for chancellor merkel. we have the details and the impact that angela merkel's vulnerability could have on the broader european economy. that's a o story we're watching carefully right now. >> oil hitting a fresh 12-year low today. jackie deangelis has the latest. >> as you said at the top of the show it was really interesting the way equities tried to take off today and oil dragged them back down. we saw 5% decline, 31.41 is where we finished the session but that was after we hit an
intraday low of 30.88, a 12-year low. traders always telling me we test these lows before we brake and hold. it's not surprising as we approach that $30 mark we will probably going to break through it. what drove the losses today, this was all about china, multiple pieces of the story here. obviously a lot of people are worried about the demand side so they will be watching every data point that comes out of china this week and next week to try to assess what's going on. some of these smaller data points even more important than the chinese gdp number, but at the same time you had a note for morgan stanley out this morning reminding us we could have a currency issue on our hands. the dollar index is a dollar versus a basket of currencies. if we see devaluation to what some people could think 10, 15% you could see the dollar index spike 2 to 3%. that could be enough alone saying morgan stanley to drive oil down into the 20s. this is something people have been calling for for quite some
time. goldman sachs has been calling for it about six months ago, right now traders getting very nervous that it's actually going to happen finally. >> exactly. >> jackie, thank you so much. let's talk about commodity stocks now under a lot of pressure as a result. it doesn't have to do with the price of oil either, bob pisani. >> it doesn't. it has to do with china and indirectly changes in the way we use certain energy products. arch coal declared bankruptcy, this is playing havoc with all the commodity names, if they needed more trouble. take a look at shreveport mack more ran. we're talking 2001 levels for freeport with what was going on with arch port's bankruptcy and china as well. you can see other coal names, you can imagine what's going on with the coal names. here is peabody energy down 20%. obviously this has produced pressures on producers of coal,
china's growth slows, we have power plants switching to historically low priced natural gas as opposed to using coal as well. so that's a major issue there. so you can see the whole complex, the down side right now, there's console energy, jeks, here is another company that produces oil and natural gas as well as coal, that's down about 10% also on the biggest decliner names. another thing i want to point out is the strong dollar is a major problem, as it relates to china, china was down overnight, 6 or 7% and the shanghai stock market the important thing here is even though china was down, the european and u.s. markets didn't react that much because chinese authorities put it higher, priced it higher yesterday. the important thing there is that calmed the markets a little bit. we're reacting largely to what's going on with oil. the currency wars in addition to the slowly in china is also two big issues, two separate issues and to a certain extent that's
bugging our stock market, particularly the commodities. back to you. >> all right, bob, thank you very much. robert, turning to merger news of a day. look at shares of both shire and baxalta, both moving lower after the two signed off on a deal in which shire would be acquired by baxalta. >> and shares of acametrix skyrocketi skyrocketing. >> we turn to mike santoli. welcome, mike. >> thanks a lot. >> thiel making, we're looking for any animal spirits for this market. >> $32 billion deal is a great start, you wake up on a monday, seems like it suggests the game still has time to play out. i don't know that it's going to be that convincing. if i'm making a list of the things that you want to see to get support into this market it's going to be things obviously like maybe positive earnings pre announcement, you want the macro and oil to stabilize but deal flow is something that should accompany
it along with corporate buy backs that ramp up as well. we have to see that. it's not have to, you really probably have to see it for this bull market to sort of prove that it still is one. >> if you don't have to at least it will help. >> if you look back to the selloff in september, we got dell, emc, big marquis deals that said corporate confidence still intact. >> you would think the deals being announced now were planned before all this mayhem involving china and the price of oil collapsing and all that. >> sure. >> it's now that we have to wonder if anybody is going to be thinking about a thiel. >> exactly. your stock price has probably been hit just because you are a global company, let's say, that's a problem. the high yield market where many of these deals might get funded are closed for business at the moment. which is why you might end up seeing these opportunistic strategic deals. healthcare is obviously in long-term consolidation, shire, it's a cross border thing, former spinoff. a lot of these pieces are in place that was making this a
relatively obvious type transaction, but i think you would want to see a lot more of that from some of the usual suspects. you look at the shares of goldman sachs right now, you look at the investment bank, the market in general is not saying, hey, we have a officer tile deal activity pipeline here. >> obviously they would be the direct beneficiaries of that. what about in real tail? it was talked about from the share prices there, but is that the kind of deal making activity if they go private that's going to bolster confidence or reflect how bad it's gotten. >> if you can execute those deals -- kohl's has been in the news in this regard, many other specialty and chain retailers will be surfaced on every screen as potential leverage buyout candidates, the numbers seem to work if the earnings don't fall apart and they have real estate. the capital markets are still looking for value as opposed to just kind of hunk ring down. >> defensive versus a strategic deal of some kind. thanks, mike.
>> let's get to our "closing bell" exchange for this monday. joining us jeffrey eves from investor plais.com. peter costa from empire executions is on the floor of the new york stock exchange and john brady from rjl brian is playing the job of rick santelli from chicago. peter costa, you would think that we are due for some kind of a bounce in the equity market, we got one the first thing this morning but it collapsed again. what's going on? >> if you look at it i think people are just fed up with, you know, the story from china, i think that there's a certain amount of institutional bailout going on, lightning up in positions, we're seeing really a trimming of overall across the board investments right now and, you know, that's not unusual, market has had a great run, there is a lot of profits to be ache taken off the table and i think that people are waiting for that capitulation so i think guys are trying to position themselves because they're
expecting some sort of major move on the down side, one big blow out. i do think, you know, i probably agree with him as well so a lot of people are lightning up on positions. >> it's a move where it's not just the merge names getting hit today. some of the worst performers are caterpillar, freeport mack more ran, a lot of exposure back to china. what's it going to take out of that country to stabilize markets here? >> that's a great question. i don't think the's going to be much of anything. part of the reason we are seeing all this volatility is everybody is waiting for a reason to get back in. i don't think anybody truly believes the market will crash 40%. i think there's a lot of people hoping it will go down a little more and they can buy the dip on some ray of sunshine but we haven't seen a ray of sunshine. it's been a pretty crappy year so far. i expect it to turn around, but this wait and see, we haven't really seen anything so the narrative continues. i think the negatively in china we will have to stomach it and deal with it probably for the rest of january. >> is china the catalyst you
watch most closely or is it oil? what's the message of the market to you right now? >> well, bill, that's right. i think china and oil are certainly out there, but there have been of a couple things that have played a role today more specifically, two things really. first, you know, coming out of the weekend it looks as if the democratic primary process is pretty close, bernie sanders and hillary clinton are running neck and neck both in iowa and new hampshire and that's going to kind of force perhaps secretary clinton to run a little bit further left with, i.e., higher tax policies and the such and that makes the markets a little nervous. we'd like to maybe have a little more visibility at least on the democratic primary side. secondly, you know, it's been another touch year for hedge funds, a lot of the liquidation taking place in equities and commodities has to do hedge fund redemptions will be pretty high. the volatility of the mark and the low interest cycle we are in is that the hedge fund model of 2 and 20 doesn't quite work and you're going to see a shrinking
of the hedge fund industry and i think you are seeing liquidations as well. >> jeff, so what about the energy space, would you still find value there longer term or is it time to throw in the towel? >> i think demand is pretty much cooked for the medium term, i think it's very difficult to catch a falling knife here. i think there are strategic bets you can make, maybe risk has been protocol he were valued and mlp is up to some of the selloff, i don't think maybe the midstream names are as bad as some people think. you buy the index you are buying a lot of energy companies. there are a whole bunch of people bought index funds and got energy more than they perhaps want right now. >> if they buy now, though, it's 6.5% of the s&p 500. >> i mean, sure, if you are going to average into the s&p 500 for the next 30 years, but if we're talking about 2015 i don't know if i would necessarily want to have the entire s&p 500 including energy. i'd say there's a lot of people talking about oil getting under
20, it's certainly not going to go much higher from here. i would be underweight energy to be honest. i think you can be strategic about some of that stuff in the midstream names but i wouldn't be touching it for the next several months. >> peter costa, if we were to close right here at these levels for the dow, the s&p and the nasdaq, we have now wiped out all of the gains from the fourth quarter in six trading sessions and the fourth quarter, let's all remember, was the best we had seen in two years. so, you know, we are reminded once again that down is quicker. you have said before you're waiting for 18.65 on the s&p 500, are you going to hold fast to that number? >> 1850, 1865, somewhere in that level. if you look at the starts, you know, the s&p and the dow both bounce ds off in that area and i think that that's still a potential to happen, but i think one of the bigger things that we're not really talking a lot about, i think that some sovereign oil funds are starting to liquidate. we don't necessarily see it from
our firm but you have to think that a lot of obligations have been met. i think that, you know, you're looking at oil at $30 a barrel, now that you have a lot of obligations and i think that there is starting to be some movement from those funds to try to get cash to meet the obligations for the first quarter. just something to keep an eye on. i'm not 100% sure if it's even right but it's a little bit about common sense and i think that that -- that we may potentially be seeing that. >> whether it's kazakhstan or some of the others. >> norway. >> a lot of people looking for those dollars desperately turning to the sovereign wealth funds. >> appreciate your thoughts today. >> a little more than 45 minutes to go here. keeping an eye on the dow which was currently down 70 points, roughly the range we have seen in the last couple hours. the s&p giving up 14 points, at the moment the nasdaq by far the worst performer today. interestingly with a lot of can
biotech concerns weighing on it, it's down about 52 points. >> coming up as biotech stocks do struggle biogen's ceo will join us in a first on cnbc interview, we will find out how m&a could put key drugs into biogen's pipeline. earnings season officially -- unofficially -- anyway, it kicks off less than an hour from now. alcoa's results are out after the bell. klaus kleinfeld will join us on "closing bell."
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s&p 500 index that are positive, led by the consumer staples stocks, then utilities, and then telecom, energy at the bottom of the heap. >> energy on the mat. even though consumer discretionary is in the red, macy's up better than 5% today. the political ripple effects of the new year's eve assaults in germany, big sell today by german chancellor angela merkel, michelle caruso-cabrera joins us with a special report on these high stakes. >> angela merkel addressing the situation at a conference today saying europe is, quote, vulnerable because it is not yet in control of the migrant situation, however, increasingly there is talks that she is the one who is vulnerable, politically vulnerable. this comes after german police arrested protestors in colon on saturday and used a water canon to clear the streets. it was a protest organized by a
german anti-islamic group. the mood in colon is tense following a spring of squaults and robberies on new year's eve. the reports on attacks of women by groups of men described by police as predominantly arab or not african, have called for controls for migrants in germany. political analysts say the decision to allow those million plus refugees has hurt angela merkel's standing in germany in ways that the european debt crisis and greece ever had. even before the a sults there was open questioning of whether or not she will survive as leader of the country. the only possible name thrown about is the country's finance manager. that's a long way off perhaps but certainly what has happened with the migrant situation makes somebody who seems incredibly in control, the politician of europe, now -- now we're talking
about auto possibly losing her. >> not just the politician of europe but let's remember "time magazine" named her the news maker of the year, person of the year last year for her handling not only of the syrian refugee crisis but also the greek debt crisis, she became the master of herding cats. >> and given her credit for holding the european union together. if wolfgang had had her position greece would not have been a member of the european union anymore. she is incredibly committed to keeping things together at this point. >> it's interesting how much this will embolden the hard right, far right, anti-eu people throughout europe, the politicians wherever they may be, now all the cases about why she has been doing the wrong thing. >> it's a great point to highlight. we have seen the rise of the extreme right and extreme left throughout europe. germanys with a the one place it
seemed you hadn't seen that rise of populism. if she goes it's going to be another place where they have definitely won. >> even while things are up in the air in port gul, spain, scandinavia. >> far reaching. >> thanks, michelle. >> we have 40 minutes left in the trading session. holding steady at these levels, but again, if you just joined us we essentially with these declines today have wiped out all of the gains that the markets achieved in the fourth quarter in just these first six trading days of 2014. >> and coming up morgan stanley's head of emerging markets is sounding the warning on a made in china recession. also up next biogen's ceo joining us in a first on cnbc interview. we will talk new drugs in this company's pipeline when we come back.
that's stock owned by company executives, directors and certain stockholders, the next lock up expiration is april 10th. this is a company that went open at 16, closed on 30 and now trading at just about 7.50. >> biotech stocks down sharply today, the nasdaq biotech index down roughly 5% for a time today. shares of biogen among them, that's down 1.75% right now. >> our own meg tirrell is at the jpmorgan health conference in san francisco and she joins us with biogen's ceo george scangos. >> thank you so much. george, thank you for joining us. >> happy to be here. >> let's start with a border look at what's going on in kbooit right now. it's been a huff start of the year, do you happy this sort of negativity about the sector will continue or do you think we will come out of this? >> at some point we will come out of it. it can't continue forever
because there are so many good things in the pipeline. i expect at some point the will be enough good news from new projects and data that things will turn around. >> do you find the apprehension is arrange the drug pricing issue. >> there is a lot of noise about drug pricing these days and i think that does concern investors and it should. look, drug pricing is a complicated topic and we've been criticiz criticized, other companies have been criticized for raising the price of our drugs over the years. people say with he need money to fund things in the future. we have raised our prices of our drugs and we did use that money to bring forward new compounds. so whereas 20 years ago we had one compound for ms, we used the revenues from that to bring forward plegradi, we're funding the research for lingo and other
compounds that hopefully can reverse the course of the process. there is no question that ms patients are better off as a result and now we are using the revenues from all of those to fund our projects on alzheimer's disease so we have interesting compounds moving forward for alzheimer's disease, those are incredibly expensive trials. there should be no confusion that drug price right side related to innovative new drugs and that some controls on drug pricing or pressure on drug prices that forces them down will slow the flow of new drugs. >> do you anticipate given the environment that you will have to attenuate and slow down the price increases on your drugs? >> i think that's probably prudent and we can't really talk about what we intend to the to do in the future with prices, but i think it's a political year, a lot of noise about drug prices right now, we don't want to be raising a red flag in
front of a bull. >> bill griffeth here. we were talking before this segment about the rocky start to the markets this year and the impact that might have on mergers and acquisitions, companies may rethink an acquisition they might have had, a lot of consolidation in the biotech industry, do you think we will see a slow down in m&a activity as a result of this rocky start to 2016, especially as it pertains to these high yield bond markets? >> well, look, i think the m&a and the biotech industry, if anything, can only be accelerated by decrease in prices. it makes companies a better value and so they become easier targets. so i would expect if this continues that there will be an increase in the number of acquisitions. >> that would be interesting. also, george, while we have you just a question on -- as biogen enters this period of maybe looking towards those alzheimer's drugs to be future block busters it is a little
risky, you are sailing into the unknown. how much are you going to try to double down on that investment and get it right versus working on the cash flow that might be coming from son-in-law of your existing multiple sclerosis products? >> i think we have to do both. we have a very interesting portfolio of alzheimer's candidates and as you know we had pretty encouraging data in an early clinical study that's moving into phase three. we are partnered with east high on that compound and others. so in total we have four compounds moving through development for alzheimer's disease. we are targeting other neurological diseases, als, parkinson's, spinal muscular at fee. we have programs going forward. they all have a certain amount of risk, i believe we are carrying them out in a thoughtful way where the potential benefits certainly outweighs the risk that we're taking. you know, at the same time obviously we have to generate a return for our investors and to maintain earnings growth and
revenue growth that hopefully will be greater than earnings growth. so we have to do both. >> i want to ask you about your multiple sclerosis franchise because that was sort of troubling for investors to see, you know, some maybe missing expectations in tech if i had air ra your oral medicine. how are you feeling in that market with the safety concerns, a little bit about the drug, how is that feeling and looking going forward? >> it's feeling pretty good. i think certainly the tech fidera has stabilized and maybe doing a little better than stabilized. we are taking a lot of, you know, action to make sure that patients and physicians understand the risk/benefit profile. we think it's a great drug which offers a great risk/benefit profile to patients with ms. we are pretty -- feeling pretty good about it. >> so much more to talk b i hope we will have you back on with all of these updates coming through the year. thanks for joining us. we have the ceo of alumen
joining us in the next hour with a big announcement of a new company to develop a blood test for cancer coming up in 4:00 p.m. >> that was ex sliegt news. meg, thank you. george, nice to see you again. thank you for being with us. how quickly things can change. suddenly the dow is positive, a pain of 37 points. >> vix is below 25. everything is fine, bill. >> yes, suddenly. >> time for a cnbc news update. let's get over to sue herrera. >> hi. here is what's happening at this hour. check out this gopro video of the raid by mexican marines when they captured joaquin "el chapo" guzman, it was shot at their safe house on friday. they captured the drug lord six months after he escaped from prison. mexican authorities say the process of expediting "el chapo" to the united states has done. a federal judge in california overseeing more than 500 lawsuits filed against volkswagen intends to name former fbi director robert
mueller as the settlement master. mueller will facilitate settlement discussions. gop presidential candidate donald trump taking swipes at a host of opponents during a morning rally. he also pledged to rescind president obama's executive orders on guns. a new nbc news poll shows trump with a 16 point lead among gop presidential contenders. ringling brothers and barnum & bailey circus is ending its elephant acts 18 months early and will retire all of the during elephants in may. the move comes after scrutiny of acts due to concerns over animal cruelty. that's the cnbc news update. sorry for the frog in my throat. >> we need cough buttons around here. >> we do. >> that gopro video that was amazing, like watching an episode of 24 in real life. >> it was shot by the mexican marines as they went in and captured him. fascinating stuff. it really is. >> hope it inspires the next
generation, too. law enforcement can be exciting. >> a great use for it. >> thank you, sue. less than half an hour to go here. what a turn around it's been in just the last 15 minutes. we were down 70 points on the dow, we are now up 55. keeping a very close eye on oil which has been a little bit of a turning point for markets but the s&p now up about 2 points, the nasdaq still slightly negative. >> oh, that last hour of trading, huh? up next a leading trader will tell us what he's watching as we head toward the close this monday. >> morgan stanley emerging markets says a made in china recession could be on the way. i've been called a control freak...
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clearly the tide has turned the other direction, we were down about 50, 60, 70 points on the dow about 15 minutes ago and now up 59, 60 points on the industrial average with the s&p turning positive as well. we will see how we do in this final half hour of trading. meantime, kohl's has been one of the big inn withers today, there was that "wall street journal" report this morning that said the retailer is considering a no of to break up or go private. what i find fascinating is management is concerned that the stock's 40% decline from last
april could make it a target for activist investors. they have taking a preemptive strike before they hear from a carl icahn type. >> that has the attention of the rest of the retail space for sure on kohl's. so some green and actually more green as we look at this market. i'm joined by gordon char love. what turned things around. >> we have had some interesting intraday volatility right from the opening bell. china was sloppy, but europe didn't follow form. we came in here today, was looking reasonably well, but then up 100, down 100, pack into green here. down volume eclipsing up volume pretty significantly. >> was it oil? it doesn't look like that's moved up materially. >> it's more about uncertainty, it's a risk off situation. look, you have corporate earnings are due to come out, people are very confused about the move last month, i mean, china in a melt down, are we going into a recession, are we reacting to the fed, is the fed
reacting to us. so i think a bit of risk off. what green you have seen has been in some of the defensive sectors and i think that people are waiting to see exactly where we stand when we start to get some of these earnings, alcoa today and some of the big ones behind it. >> we will get it after the bell. we will let you get back to it. >> thank you so much. >> a global recession made in china, that's what morgan stanley's head of emerging markets is warning about in his most recent piece in the economic times, richard charm ma said global gdp will likely contract by 5% in year. richard joins us right now. why not? is there a cyclical move or is something going on otherwise? >> no, i think that what's been happening in china has really been taking place over the last few years which is there has been a massive buildup in debt, there is no other developing country in history that has
taken on debt as rapidly since china has done since the 2008 global financial crisis. i think that's really what's happening now. it's paying a price for this massive ak is lags in debt. now, when exactly this will lead to a melt down is hard to call, but this is the big risk that the global economy faces currently. >> i wonder what that also means because it's an unusual situation, you know, the u.s. declining and sending the global economy into recession, we've seen that, it's not pretty. what does this version of a downturn look like and how does it come back and affect u.s.? >> well, first off i think that the 2008 experience was extremely unique as far as global recession goes. there have been about five global recessions over the last 40 years or so and 2008 was a very extreme version on that. i think that is really off the stable. that's not what i'm expecting. but it is quite possible to get a milder global recession this time based on what's happening
in china just because the chinese economy was become to large and significant in the world today. all the global revisions in the past have been caused by the united states but now china has become the largest contributor to global growth over the last decade. how this impacts the u.s. economy, i don't think the u.s. economy needs to fear an outright recession, but i think that in the u.s. what we're looking for is that in 2016 we started off with most growth forecasts up around 2.5% growth in 2016. i suspect that those need to come down by possibly a percentage point and we could grow in 2016 by 1.5% due to the weakness in global demand which hurts u.s. exports and also hurts the profits of u.s. companies which are increasingly exposed to foreign sales. >> so far we have seen the commodity prices moving lower as if we are in a recession already. some interest rates around the world are negative now, suggesting recessionary times
there. does that continue or are we hitting bottom right now or what do you think the fallout is from the economic forecast you're making right now? >> well, the economic forecast really sort of suggests that if you look at the history of commodity prices after having a boom for a decade they spend a long time correcting the excesses of the decade. the 200 year history of commodity prices is commodity prices have gone nowhere, but after a strong boom they typically spend 15 to 20 years in correcting the excesses. i think that commodity prices from here may not fall much further but what you can expect is an extended trading range and for the price of oil i think that about dpief years ago we all thought 70 to $80 was a floor for the price of oil. that's likely to be the cap for the price of oil. >> what's your bottom price, then? >> i think if you remember that
far from the bottom i doubt we will get below the 10, 15% on the down side for oil, but there is always a possibility for an overshoot. it's hard to see how the price can sustain below $30 a garl barrel. i think from 30 we could bounce back up to 40, 50 and languish there for a long time to come. >> richard, thank you very much. that's richard sharma from morgan stanley investments. >> these markets continue to move higher. the dow now up 87 points, it has been a roller coaster today, up, down, up again. >> the market opened up 100 points, they said there is the bounce we've been waiting for. >> not at 2:00 p.m. >> here is the bounce we've been waiting for. >> we will see if we can hold on to it with a little more than 50
minutes to go and i will lumina is forming is new company to develop blood tests that can detect cancer before symptoms arise. >> also amazon's prime video service shined brightly last night at the golden globes but netflix not so much. julia boorstin who was in attendance will have that story when we come back.
welcome back. turn around tuesday has arrived a bit early. the dow is up 80 points after being down about that much right before we came on air the top of the hour. there are a couple different reasons circulating as to why, it doesn't have to do with options expiration this week, is it buy orders on the close, is it rumors about further action we might see out of china tonight, nothing concrete we can tell you at this point other than it has lifted, even the nasdaq today into positive territory. fit bit shares, though, meanwhile falling below the company's $20 ipo price for the first time since going public last june. the decline can be attributed to, first, analysts are split over its new blaze smart watch. >> everybody just kind of yawned. >> yes. some see this blaze as a misstep to complete with the apple
watch, others see it as a solid upgrade for fitness bands. also a class action lawsuit filed against fit bit claiming the technology is flawed and does it not provide consistent or accurate results. >> i'm going to leave it right there. >> in the drawer. >> yes. >> amazon, the surprising big winner at the golden globes last night. julia boorstin was in los angeles. your gown was lovely. how were you wearing? >> i don't remember, but it was gold just like the awards that amazon brought home the most of. amazon ake i believe taking home two golden globes awards, mozart in the jungle and prime content original industry. it beat out favorites including orange is the new black and hbo's veep. amazon tied with u.s.a. which won two awards for mr. robot beating favorites like hbo's "game of thrones" and netflix's narco for best drama.
now netflix led in terms of nominations of all the networks with eight it did not bring home any awards and broadcasters won just two in total, one for each of the actresses leading fox's empire as well as cw's crazy ex-girlfriend. fox swept nearly all the awards including top film and best actor for the revenant and t"th martia martian". the globes are determined by a small group of foreign artists but they are sought after helping studios lure talent and helping potentially their viewers from streaming video as well as the box office. globes wins can help in terms of momentum and potential attention from the academy before the final oscar vote. we will be getting those oscar nominations out this thursday. guys, back over to you. >> oh, boy. i remember when cable was overtaking broadcast, now streaming is the one that's getting all the attention.
>> what's next? video games? >> that will be in six months or something. thank you, julia. >> about 11 minutes to go here. a little off the highs of the hour, the dow is up 55 points, the s&p is up 2 and the nasdaq back into the red. >> we are about to unofficially kick off earnings season with alcoa after the bell tonight and some market analysts say a profit recession could rear its head this quarter. we will have details next when we come back. equals great rates. it's a fact. kind of like reunions equal blatant lying. the company is actually doing really well on, on social media. oh that's interesting. i - i started social media. oh! it was my...baby. you ppremium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay
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discover the magic of scottsdale. plan your getaway at magicalscottsdale.com you're going to see the dow is up 86 points. good, finally we're getting the bounce we expected. as you can see from the chart today it's been more complicated than that is correct we have been all over the map, after a 100 point gain in the opening, lower by midafternoon, back up 82 points right now. joining us as we get ready for earning season we have sam stovall. the possibility exists we have an earnings recession for the fourth quarter? >> exactly. the s&p capital iq estimates calling for a 1% decline for all of 2015. there have been 13 times since world war 2:00 we have had an earnings recession and that either preceded or accompanied
ten times in which we had an economic recession. so the jury is out as to whether an earnings recession will translate to an economic one. we don't think it will but that's certainly one reason why investors are worried. >> something different is going on and if it's china weighing on the world then the question remains how that truly affects us. how do you define an earnings recession. there are rules of thumb. is it just the fact they were negative? >> it's a full 12 months compared with the prior 12 months that's negative. many times we have had quarter versus year ago quarter that's negative. actually we are expect to go see this fourth contract be the second consecutive one. i'm not going to quibble over the second quarter because it was up own 0.1% so maybe it was the third successful downward move on a quarterly basis. >> with a rounder error of some kind. >> sure. the worry is do prices lead fundamentals, do earnings lead the overall economy right now the jury is out.
we say no but still to be determined. >> i'm tempted to turn to the super bowl page here. >> what's going on? >> so we're showing your pop. tell us what's going on. >> bob stovall, he didn't create it but he popularized the super bowl indicator. >> it's almost like edison and the phone graph, edison and the light bulb, he didn't invent but it but he improved upon it. what pop did was he -- don't play a lloyd benson on me saying i knew thomas edison. >> i know bob stovall he is being b. to turn 90 years old. who has to win to keep the bull market going? >> we have to have somebody from the nfc, national football conference or a team like pittsburgh from the old nfl to win the super bowl and that would be positive for the stock market. like the january barometer, if you will, it's a good indicator
of what's to happen in the year ahead. >> albeit illogical. >> if it's up, but if it's down it's more like a measure of uncertainty, but, yes, with the january barometer there's more causation with that correlation with the super bowl theory there is none. >> i'm relieved to see the panthers, they're having a pretty good season. >> i'm still voting for peyton manning since my giants are not in there. that would have been a bullish indicator for the stock market. >> if denver wins it would be an indication for concern for the year ahead. >> you better change your mind, bill, quickly. for the sake of all of our viewers there. >> the best to you and to pops there. >> thank you very much. >> great piece if you haven't seen it. >> happy birthday, pop. >> he looks pretty good there. >> i thought talking about me. >> you look, good, too, sam. >> happy birthday, pop. you have another month to go before that. we're going to take a look at the markets, what another wild day it's been.
♪ ♪ those who define sophistication stand out. those who dare to redefine it stand apart. the all-new lexus rx and rx hybrid. never has luxury been this expressive. this is the pursuit of perfection. all right. very quickly, we've got 90 seconds left, bob pisani with me for the closing countdown. shanghai down another 5% overnight. from the peak it hit in late december that market is down 18%.
we're getting close to bear market territory but we are not there yet. today's dow opened up 100 points, then fell, but we are finishing out right now at least with a gain of 74 points. oil very interesting day, bob pisani, it hit $30.88 at one point, it is around $31 right now. >> thank you, morgan stanley which called for $20 oil. >> goldman has been talking about that, too. >> i know. people have been asking what's going on late in the day. one is oil, oil didn't do too much late in the day, the other is this whole currency thing. overnight shanghai down 6 or 7% and yet our markets in the u.s. markets didn't really react to that. that's because the chinese kept the ranimbe high against the dollar. today we saw the value of the ranimbe moving up against the dollar. dollar went down against the ranimbe late in the day and this is all speculation maybe overnight the peoples bank of
china might do something with her ranimbe to further strengthen it. >> we will see what happens tonight with chain. another crazy day for the market, the dow up 57 points, esco technology at the big board, get ready for earnings from alcoa and her ceo with the second hour of the "closing bell" with kelly evans. see you tomorrow, kell. thank you, bill. welcome to the "closing bell." i'm kelly evans. what a final hour of trading it has been. let's take a look at how we're if i know shik the day which was a roller coaster ride, up 100, down 100, at the goes going out with a gain of 50 points on the dow, not too shabby, one of its stronger performances of the year, it was up a third of 1%. very different from what the broad s&p 500 did, it only managed to slightly close higher, adding 1.5 points and the nasdaq couldn't do it today, weighed down by biotech and a few other things going on. i believe with that closing
level it does put it very close the nasdaq at least to erasing all of the gains it saw in the fourth quarter. joining today's panel as we await for the first earnings report of the season we have our own mike santoli and catherine ram pell from the "washington post." and for more on today's market action "fast money" trader guy adami. >> what do you make of the trading day and ultimately the close. >> we've been saying for a couple days that the market was really stressed to the down side, been going almost straight down for the last seven days. it didn't take much of a spark. oil markets closed and didn't fall apart at the end of the day. some people attributing comments of fed official dennis lockhart basically saying we may not have enough data in the first quarter to have confidence to raise rates again. i don't think it really changes the message from what the fed officials have been saying all along which is we're data dependent. i think the markets were in the mood to say maybe they're
looking for dovishness where maybe it doesn't exist. >> $700 million to buy art cashin told you. finally a slightly more positive sheen but only slightly as people trying to make sense of what happened in these markets. >> people stopped freaking out about china and remembered that china doesn't affect the u.s. economy all that much. there was a lot of pressure last week freaking out about chinese manufacturing, whether the chinese government has a handle on markets, whether they're intervening too much and that hurt us, especially in the u.s. i think today probably people calmed down a little bit. >> that said, guy, we should look at some of the names most exposed in china's growth did. caterpillar, freeport mcmore ran was down, can the market leave those names behind. >> they've left those names behind for quite some time. i think catherine makes good points. but we discount china when it serves our purposes. i'm not suggesting that that is
what she's doing, but china still the second biggest economy on the planet, soon to become the largest economy on the planet, so you can't trumpet them as this great growth engine that will help us on the one hand and discount them on the other hand. we didn't get down to the august 24th lows of 1867 give or take but the fact we bounced off 1900 is good. it should set us up for a bounce up towards 1970. crude oil still near death and we've talked about this for the last six to nine months. maybe the fact the s&p didn't fall out of bed on a day crude oil is down 5.5% maybe you see some capitulation over the next couple days. >> alcoa officially kicking off the season, mary thompson has the report. >> it looks like the company's earnings were slightly better than expected. earnings excluding items 4 cents a share, analysts were looking for 2 cents a share. revenues a hair light, analysts
were looking for $5.29 billion. upstream business mildly profitable, $58 million adjusted ebitda of $239 million. the company also said that it exceeded its productivity goals for 2015, $1.2 billion. it's target was for $900 million. looking ahead for 2016 the company does expect continued strong demand for aluminum. global demand a 6% increase for 2016 of the making it a record year for aluminum demand. it's projecting a strong year for the global aerospace sales although expecting a decline in the heavy duty trailer and truck market specifically in north america. overall the company coming in with better than expected results for the fourth quarter facing very division -- vef difficult environment because of the decline in aluminum prices and of course the oversupply of aluminum as well. keep in mind the company is
planning to separate into two separate basis in 2016 and in light of this the company is saying that it is expecting to implement overhead reduction programs across the company of which $100 million in benefits will be realized in 2016 and $225 million in benefits to be realized in two years. kelly, back to you. >> all right. mary, a lot to dig through there. thank you. our mary thompson. let's bring in alcoa ceo clause kline field and we're joined by jim cramer. clause, just looking through -- >> hello. >> what is happening here, bottom line you managed a small beat but we are still talking about earnings down about 90% from last year. as the difficult macro conditions persist what else can you do to try to post better numbers for this company? >> that's true. that's true. look, i think if you look at the quarter it's been really a solid quarter. we have substantially grown our aerospace business, our
customers have seen it and positively responded and we've seen a string of large contracts and overall of the last quarter 4 billion of aerospace contractser for the whole jeer 9 billion. our midstream business we are continuing to upgrade the profitability to go to higher margin, auto is one of those, we've increased the our auto, doubled the shipments compared to last year. on the upstream side as you said and before very, very difficult environment. we have seen the price decline over the course of the year in aluminum of almost 30% and aluminum in a of over 40%. we have done everything in our own control, reshaped the business and look where we are, we're still standing and making a profit. so look at cash, look at productivity, all of this good, all that we have on our own control. >> you are also about to split the business. it goes back to some of what you are saying which is there are parts doing much better than the upstream business, the downstream business has grown
contracts, et cetera. can you break down for us how profitable that piece of the business was in the fourth quarter relative to obviously the difficult environment that persisted for the upstream business? >> well, look, i mean, as we are going into the separation, i mean, both businesses are really attractive in a different way. on the one hand we have a very, very attractive value add business with a very nice expanded aerospace portfolio. our improvement side on the margin in the midstream in working out very well. statement on the upstream side we are taking all the actions into our hands, we changed the architecture of this business, we have five different businesses in there, we have alumina, an end view position on our bauxite business, we have a strong first quarter within in alumina, improving our position
on aluminum, all of these are businesses that can do very, very well and also look at it like this, i mean, today we are in a trough and we still have doing well in this trough. look at the upside potential that this business has. >> jim. >> klaus, revenues for aerospace you have $9 billion in orders it's the exact amount precision cast parts has to have and it's being without for three times than your company is worth. is the way to look at this new company to be an engineering company primarily with aerospace, which is an incredible growth market and another company even in this environment where alumina was down 25% you are still profitable. people might have an option to pick either one, make a bet on commodity increase in the world or make a bet on the continued strength of the aerospace side. >> that's exactly right. keep in mind, i mean, the value add business stands on --
obviously we're talking about aerospace and it's an attractive business, we've continued to see growth, but it also has a strong position in auto. we also have a good position in commercial transportation. commercial transportation in north america is going a little bit down but it's not falling down. then you have the upstream business as you correctly said, there are some people that say, hey, look, this is in a trough, look at what we are doing in a trough and they are maintaining their competitiveness, we've increased our competitiveness. how would that business look like when the market comes back, when it even comes mildly back because, i mean, a decline compared to the one that we've seen in 2015, that's not a normal situation, 40-plus decline on alumina pricing and more than 30% on aluminum that's not a normal environment. >> $1.9 billion in cash, which is a nice step over 1.8. how is that cash going to break
down between the two companies? >> well, i mean, we will go through this once we go closer into the first half of this year when we basically work through the structure and when we work through how we are going to arrange the balance sheet. this is work that's still ahead of us. we are on track with the separation and as you can see through the numbers all of this looks very positive into light of the separation. >> we look at the shares up about 2.6% on what looks like the first earnings beat since early 2015. klaus, just a final comment as investors are concerned about the situation in china, can you explain to us to what extent that country's demand and supply situation is hurting your business and how much worse you think it might get, how much longer you think the slow growth or negative growth environment there might persist. >> one thing i forgot to mention, i mean, on the aluminum side we are also putting out a new demand forecast for this year and we believe demand worldwide is going to increase in 2016 by 6%.
this on top of the 6.5% of last year, on top of the 9% the year before last. aluminum is very, very hot -- hot, hot metal, a lot of people want to have more of this. china in reality is not exporting so it's basically self-contained. the situation in china as you know when you look at the financial markets, the financial markets always swing stronger than the industry. on the industrial side we're seeing they're going through a major transformation, a lot of things going on there. for us it's most important that we focus on those things that we have under our own control, we are not dependent on china. china has opportunities rather than threats for us. >> understood. klaus, thank you for joining us. >> thank you, klaus. >> klaus kleinfeld. again, jim, those shares up after hours and maybe a lot of negatively has been priced in. >> it sure seems likes it to me. i'm gratified to see that alumina wasn't a big loss.
so this is a big of an upside surprise to start the year. >> the conversation with alcoa's ceo with klaus kleinfeld will continue on "mad money." jim cramer, appreciate you joining us. thoughts, mike, on the report, the stock reaction, the outlook for this difficult sector. >> i think you hit it when it comes to the stock reaction, if you just look at the chart, a one year, two year chart of alcoa it looks like every other base commodity, and other commodity stock. if you have a little bit of a lift could suggest people have been braced for something even worse. obviously the story about alcoa is a little different because of the split. jim hitting that precision cap parts comp for the engineered materials business which is probably alcoa's dream that the world starts to look at it that way. >> triple the value. they're aiming in the earnings release for a late 2016 or second half 2016 split of those two businesses. let's get to a news alert on through lieu lemon. seema mody joins us. >> lulu lemon shares up over 4%
after hours, the company raising its q4 guidance earnings and revenue above consensus, now expecting earnings in the range of 78 to 80 cents a share, lulu thumben attributing this to a successful holiday season, saying strong execution in sales online during the key holiday weeks. it does see gross margins and expenses remaining in line with prior guidance and q4 same store sales in the high single digits. investors like what the company has to say. up 4.8% after hours. >> that's an interesting move. thank you very much. let's see. lulu thumben want to do a quick thought before we leave. >> i mean, again, a lot of hopes built up into the holiday and people say, do you know what, the pricing wasn't right, the mix wasn't right. if any consumer company comes out and says we actually figured something out for holiday it's going to be a positive. >> guy, you agree? >> you're talking about a company that's not cheap but also a company with close to 26% short interest that's been sold off. my sense is if you don't fade in
rally it probably trades up towards 60 bucks, we could have another conversation. >> catherine, have you been buying lulu lemon? favorite workout apparel? >> i'm not a yoga person. i should i should be in the 21st century, but that's never caught my fancy. >> they are doing blazers for men, they've moved on. the shares are up almost 6% on that news. guy, do you buy or sell alcoa? >> i know you've got to run. respectfully klaus has never seen a quarter he hasn't liked over the years i've been watching him. i will say this, though, alcoa is not cheap, it's 16 times forward earnings but the good news is we got down around levels we last saw a couple years ago, 760 or so. if nothing else you can trade if from the long side against that. every quarter has been faded. this one might bounce closer to 8.75 then i think you sell it again. >> fair enough. thank you for joining us. >> later. >> guy adami and the rest of the "fast money" crew are coming up
top of next hour talking to dennis gartman on why he thinks this is the era -- the new era of oil. see what that means. at&t bringing back it's unlimited data plans but there is a catch. plus bill gates and jeff bezos among the big names inn skres something in a new company developing a blood test to detect cancer before tumors form. the ceo tells us about the new venture and what it means for the fight against cancer. you're watching cnbc first in business worldwide. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov
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let's send it back to seema mody for a market flash. >> take a look at this chart. shares of for profit education provider apollo education group spiking by as much as 25% on a dow jones report saying apollo global management is in advanced talks to buy the company. earlier today we learned apollo education was exploring strategic alternatives, source according to dow jones say a deal could be reached in the next few weeks and they could pay roughly a billion dollars for apollo education. you can see the stock up now about 2 23%. a lot of apollos in that story. >> but a move up 23% like you
just said. 2010 at&t stopped offering unlimited data plans to its new customers, now the cell provider is bringing it back but with a slight catch. mobile users have to subscribe to directv or u verse tv service. ina freed joins us with a look behind this strategy. what do you think is going to be the customer response in are will he take directv, is it worth it for the unlimited data? >> unlimited data from the two big carriers has basically been nonexistent for the last five years, it's pretty appealing, at the same time once you lock your cellphone and tv service it's going to be hard to ever switch. >> i saw one analyst report saying this is going to put pressure on verizon which may seem to suggest all people look at is the headline. >> we want to watch video and unlimited is really one of the key ways to do it. if you don't have an unlimited
plan and you want to watch that high definition video it's going to eat through your gigabytes pretty fast. >> right. again, first it was text messaging, it had to be unlimited, data plans it feels like it has to be unlimited and is this move by at&t going to work? >> it's definitely moving in this direction. now we have saturation in carriers facing the situation where it's a zero sum game. you have to offer something more. obviously you keep moving the line of what is a great offer. so if you are at&t you have to play whatever advantage you have which is first of all they own the network, they have a landline company and a cable company basically. what that means is you can further bundle things and try to make money on another part of the business. if you are only a wireless carrier it costs you a lot more money to offer that unlimited data. >> catherine, it seems like, okay, the bundle is not dead afterall. it seemed like there was a move to offer morale la cart options. >> before it used to be the dates that it was really, really expensive for the companies to offer these kinds of plans,
personally if you were going to select out the customers who use the most data. that's when we had throttling. it sounds like they will do some of that if you reach 22 gigs a month. it was expensive. >> do you think they will be doing some of that. >> they say they won't really throttle except, again, if you use more than 22 gigabytes and then only where there's network congestion but that is the big risk that they only get the customers that is basically trying to use their cell phones as home internet. that would be bad for them. if they can get some average users to just don't want to worry about their plans then it's a good thing, again, especially if they get wireless customers that weren't using their video or directv customers that were getting their cellphone services from verizon then it's a good strategy for them. >> the quadruple play got a lot of talk a while back, it's obviously here again. to me the question becomes if you are an at&t or verizon not just how much can we make on
this offering but how much does it hurt our competition. basically does it put our competition in a position of attempt to go match it and if it costs them more than us then it's a net advantage. >> the story today in the journal reminds us brent debt trading 39 cents on the dollar. there is a lot of pressure on them. >> the industry said there shouldn't be four in in market if they had their way several times, actually. it's great for consumers, actually, is the take away. >> do you agree, ina? >> i think, you know, clearly you have at&t and verizon being able to offer things that sprint and t-mobile can't and that's going to be painful for sprint and t-mobile, they've got both been clever, especially t-mobile with things like binge on but we don't have a video service, they are not going to have a video service tomorrow. to the degree at&t and verizon are able to offer services is that they can't offer it's hard to compete when you have a service that you literally can't offer. >> thanks for joining us. ina fried. coming up next we will take
auto show where it is all happening and has the details for us. >> interesting show. there is no one model that is dominating the show getting all of the attention, instead we are seeing a variety of models being shown. volkswagen is getting the lion's share of attention from reporters which is understandable. the company was hoping that the unveiling of the new tiguan that is going to be coming out here in the united states would deflect attention from what's going on when it comes to the rigged diesel emissions scandal. that was not the case. we had a chance to finally talk with volkswagen ceo mueller for the first time here in the united states about where this company is when it comes to finding a remedy for almost a half million defective cars that something needs to be done with. >> it will be a lot of work to do that and we -- it's not the last product we will offer for our customers. we are preparing a better and
new volkswagen, we have to change some processes, we have installed new member of board with integrity and law, so we do a lot to get back the trust of our shareholders. >> mueller talking with us today saying it is possible that volkswagen will wind up buying back some of those 500,000 defective vehicles with rigged diesel emissions. as you take a look at sales over the last five years we are now sitting at an all time high for annual sales here in the united states of 17.5 million. kelly, the expectation here is that we will see sales go at least a little higher, maybe 17.6, 17.7 in 2017 year in the u.s. >> one thing that vw seems to be getting right is introducing a crossover suv model. a lot of cars there seems to be
just that, cars, because they were developed back when oil and gas prices were much higher. what about suvs, they were 60% of the car sales last month. are car makers able to meet this sudden unexpected spurt of demand? >> they're able to meet it in terms of supplying those vehicles. there's plenty of suvs and crossovers that can be built. where the question is, where a lot of people are focused on will we see even more models coming out. with see that a little bit. you're talking about the development cycle. it takes time. so from some auto makers they're looking at this saying we've already got a slue of suvs, do we bring out any more because what happens if three years from now oil prices skyrocket then they're stuck. >> that's true. mike. >> phil, i wonder you mentioned that the expectation is that total industry sales could nudge a bit higher from these record levels. is there any concern about this stutter step we saw in the monthly sales? >> they're concerned on the
luxury side because when you look at the glut, if you will, of luxury cars, not suvs and crossovers, because those are still in demand as they are for the entire market, but luxury cars, there's a lot of supply out there and i've talked with more than a few dealers who have said, okay, are there enough buyers out there or do we have to start seeing more incentives being slapped on the hood? i should point out jim lents at lexus said not a problem at lexus. might be a problem with some of the other luxury names but not a problem with lexus. >> what about this chrysler minivan, is that exciting people? is there anything new and fresh about the minivan these days? >> no. i'm not trying to be cruel. i'm not trying to be cruel to chrysler or to the minivan folks. sales of minivans, kelly, in 20,000 almost 1.4 million were sold in the united states. do you know how many were sold last year, 503,000. it's a very small niche market, it's been replaced by the crossover and suv. that's what young parents are
graph tagd toward. >> you never know. some hipster millennials might make the minivan cool again. >> frumpy is the new cool. >> exactly. we won't call it just yet. phil, thanks for joining us. phil lebeau, after a full and busy day out in detroit. time for a cnbc news update. let's get over to sue herrera. >> my husband is looking at buying a minivan. i don't know what that says about him, but here is what's happening at this hour. an appeals court has granted a request by leading daily fantasy companies fanduel and draft kings to keep operating in new york. those two companies are appealing an injunction by new york's attorney general who wants to shut them down. still images released today of paris shooting suspect salah abdeslam. in a reversal of its previous stance george washington university says it will rescind an honorary degree ri awarded to
bill cosby in 1987 saying the debate over the honor was creating trauma for sexual assault victims. last year they said they never took back honorary degrees based on information that came to light later. and lionel messy has won the fifa player of the year award for a record fifth time. he ended rihn nald dough's two year hold on the trophy which signifies soccer's top player. that's the cnbc news update this hour. back to you, kell. >> we want to know if he pies the minivan, that will be our market indicator. >> it's something about the video thing and reclining seats. i don't know. >> like the new living room. >> that's exactly right. >> sue, thank you so much. >> sure. >> up next, we will discuss how the plunge in oil prices today could impact earnings season and your investments, plus we will speak exclusively with the ye of illumina about his company's startup that hopes to defeat
today. the s&p 500 only close bd a point higher and the nasdaq was down another 5 points, the nasdaq close to giving up all of its fourth quarter gains in the first six trading days of the year. oil touched a fresh 12 year low today down more than 6%. jackie deangelis joins us. another of% downward today. >> that's right. it was another day for beating in the pits for oil traders today. we closed at 31.41 at around 2: 2:30. the intraday low was a 12 year low. remember, traders are telling me we test the lows first and then brake and hold. because we're getting so close to that $30 mark it is possible to see the 2 handle and see it soon. part of the fear was over china. it's not just a demand story anymore. we will be watching the data that comes out of china closely. traders are honing in on that, but morgan stanley making the
point that part of this has to do with currencies, if we do continue to see a devaluation of the yuan that's going to have an impact on the dollar intention that could potentially move crude lower and morgan stanley said that's enough to give us the 2 handle right alone. a 15% decline in wti in the last week alone. i want to make the point that we haven't seen this or we have seen this 13 times only over the last decade. kensho gave us that data. they point out while the energy stocks got beaten up today those are certainly some of the losers you will see some winners here, dollar general, ross stores, dollar tree, these are some of the retailers that benefit when oil prices come down. also o'reilly auto and tractor supply. people an eye on some of these names. if the pressure does continue on oil prices you could see a little bit more of a pop here. it's not necessarily all bad news. guests were op today saying they think oil is washing out here.
i still have some of the extreme people i'm talking to saying that the teens are possible when it comes to oil prices. nothing has changed here with the fundamental supply demand story and in that case the world still a wash in oil, kelly. >> and concerned about growth. jackie, thank you for now. that shanghai composite kicked things off by taking a leg lower more than 5% during the training session. joining us with more on china's growth picture is susan lee. >> some of the post circuit breaker era finishing pretty much close to the lows of the session and the r & b is the story for the first quarter in china, for instance, we had a second day of a stronger fix of the chinese cnc and that impacted stocks at shong could think because the inter bank rates shot up and spiked to record levels. this has to do with intervention into the offshore markets because they have been basically
buying rmb, selling u.s. dollars but that's draining a lot of liquidity and also dragging down a lot of these bank names in hong kong. we saw the slide yesterday down over 2%, two career lows in hong kong. shanghai four year lows at this point, adding to the bearish sentiment. people don't know where authorities want to take the rnb and the chinese economy. later on today we will get another reed on china that comes with the trade figures. when it comes to trade numbers it's not the exports side of the equation that matters it's all about the imports, how much is china slowing down, how much less are they buying from the rest of the world. we also saw that with the cpi and ppi numbers over the weekend. >> that's right. quite early there. susan. we appreciate you joining us. that's susan lee out of hong kong. david zergos enters the fray and says the china drama is not over yet. let's begin with those questions susan raised, where are the
chinese namel the renminbi and where do you think the economy is headed from here. >> happy new year. on the china story we've been pretty stead fast in our view and we wrote a lot about this in august. i think to start the year i've recycled the commentaries that we put out during that august/september period. really it's a bit of a kind of a repeat of what we saw and i think the paf loaf yan market response is to sell and then ask questions later when it comes to an rihn minute bee devaluation. our view is different in that we think the renminbi devaluation is a positive and should be looked at in a glass half full not half empty way and it's something that's probably good for china in the sense that it decouples itself from u.s. monetary policy at a time when the u.s. is moving toward a tightening and they need more of an easy. >> how much exposure do you think the united states has to
this point to what's happening in china? >> our exports to china are tiny, 1%, and, you know, the story line is really one i think more of contagion in financial markets and loans to chinese entities that are maybe not going to be able to pay back those dollars that they borrowed when we were printing lots of dollars and they were veriees to get in the international capital market. so the chinese have built up a lot of debt, on the back of very strong gdp growth over many years, and people are rightfully worrying that if there is a devaluation which should strengthen the economy it makes it harder to pay back those debts. that's the crux of where the financial markets get nervous. i don't think this means a lot more main street. it could have implications, serious implications on wall street, but it's going to feel in our world a lot more like a light 1990s emerging market
crisis where main street is kind of happily chugging along and wall street is getting a few hiccups along the way. >> mike. >> david, that certainly makes sense. i wonder if this is a rerun to some degree of what happened in late summer. what were the relevant ingredients that allowed things to stabilize in our markets after that? >> well, it's interesting because we started to stabilize reasonably quickly and people kind of came to grips with the fact that the chinese weren't going quickly to 7 or 7.5% and sort of saying the same thing today, they are not interested in going aggressively. they want to be a reserve currency, they are not going to act like a traditional emerging market currency where you just walk in one day and it's down 20 or 30%. they could, but i think it would be very self-defeating given all the hard work they've done to get into the spr and bring the msci shares toward inclusion in the msci. all of that sort of was happening. if you will remember in
september we got another blow because janet flebd up her press conference and put a lot of doom and gloom into the system. we had another downturn in the s&p before it all kind of came back and janet sort of repented a little for her since and started talking the u.s. economy back up. i think the story line is very similar. i don't expect janet to do what she did. >> i assume you're long the s&p 500 and i thought i was going to see some jeffrey's 2016 here. >> i have the hat here, i got one for you. it's the i love qe hats, they replaced the no hater hats. i also have one more for you, this is also the it's not 1937 hat. so i will bring both those when i come back to the studio and see you soon hopefully. >> thank you, david, for joining us. appreciate it very much. >> bye-bye. we have a news alert on disney. let's get the details from julia boorstin. >> the walt dissy company has
elected mark parker the president and ceo of nike to its board of directors, he will be named director effective immediately, he will stand for election along with the companies other directors on march 3rd in chicago. now disney has 12 directors. disney ceo bob iger saying that market parker is recognized for driving seller growth of an industry leading brand, that makes him a great fit for disney's brand. certainly company -- disney's growth over the past several years is notable and the company looking to add other people that have that expertise in brand building. back over to you. >> appreciate t julia. i mean, makes sense, right? >> makes all kinds of sense. disney has its pick of directors, anybody would be glad to sit on that board and obviously just that kind of consumer know how is a much bigger piece of disney's business than it has opinion in years past. >> they have to sell a lot of gear. >> dresses and probably sneakers, i'm sure -- >> wonder boxes. >> who better to have on the
board. >> absolutely. this could be the holy grail for cancer doctors, bill gates and jeff bezos investing in grail which is developing a blood test to detect cancer faster than ever. we will speak to the ceo about how this could revolution nice treatment. you're watching cnbc first in business worldwide. you pay your car insurance
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wilt come back. genetics and sequencing company illumina creating a company called grail which will develop a blood test to spot early signs of cancer. it's already catching the eye of bill gates and jeff bezos who have poured millions into into the new company. this as the biotech index struggles today. with us now on a cnbc exclusive live from the jpmorgan health conference meg tirrell and illumina ceo jay flatly. >> jay, thank you four joining us. >> great to see. >> you big news out over the weekend, very ambitious length badge we're hearing. you're calling this company grail, you have said it will make the first mor dent in cancer mortality putting $100 million in here with big names in here with you guys. do you think you can get this to market by 2019. tell us about what you have already done to make you believe you can get this going so fast. >> we've been working right now for a couple years and the light bulb went on for us 18 months
ago in our noninvasive prenatal test where we accidentally were finding cancer in women when we weren't testing for that, we were testing for down syndrome. we began to think what would happen if we designed a test that was targeted to find cancer in healthy individuals. about six months ago we had sufficient evidence that this was all going to work. we created a brand new company called grail under this idea and bring in incredible investors from outside and kick it off which we did yesterday. >> you say you can find cancer in people before they are symptomatic. >> that's right. >> how do you then help those people and do you treat them? are the their piece available to make a dent? >> in some cases yes, in some cases no. one of the most important things is that we detect cancer early and the reason is that when it is found early it's often treatable in a whole different way than when cancer has advanced. surgery works when you detect cancer at stage 1 or stage 2 which is very challenging at
stage 4. there are other interventions as well, chemotherapy and radiation can be much more effective if you find this early. >> kelly. >> thanks. jay, appreciate you joining us. i was just wondering as we look back on the era of having increased mammograms at earlier ages and the same i guess on the prostate guys -- side for a lot of guys, now people are moving the other direction and saying that was triggering a lot of false positives and might have caused more harm than good. what happens if as great as your technology is it ushers in an era of raising that anxiety about cancer for all sorts of people. >> that's a great question. there's a fundamental difference here. in the tests that you cited which are challenging and have high false positive rates, you're looking for something which is an indication for cancer, either a psa test or shadow on an x-ray. in the case of what we're doing with grail we are measuring the dna from the cancer cells
themselves so it's quite different. we are am measuring the cancer. we will know if we detect a set of mutations that cancer is present in that individual we will need to go figure out where it is. we would we would not launch this if we had a high positive rate. that is very important. >> and one related question on that is, is the definition of cancer so black and white? is it the presence, period of these kind of mutations and they only need to be detected or is there a critical mass of them. how much gray area will there be, as it will change as we have more information available. >> it will be. and that is why the tests will scan across a wide set of mutations. because it is only the fact that you have a collection of mutations that would allow us with great specificity and sensitivity to declare that someone has cancer. and the other thing we could do with the test is measure the rate of change. if someone had mutations, we
could look again in six months and see whether the load has stayed the same oregon up -- stayed the same or gone up. >> and we can't let you go without asking you about genome sequency. and i just had it done using your own technology. will there come a day, when healthy people, are genomed for routine health care and when will that come? >> we believe everyone will be sequenced at birth and to help manage their health. that is 20 to 30 years from now. but people will sector into the medical system, cancer being one of them. >> so much more to talk about. come back and talk to us again soon. next up, we have merck ceo ken frazier from jp morgan, that is coming up at the top of "fast
welcome back. powerball has become the world's largest jackpot. hitting a record $1.4 billion. but there are things to avoid if you want to strike it rich. eric chemi is here with tips and tricks. >> we can't predict the numbers so forget what you see on the internet where people talk about these are the numbers that are most likely to come up. that is random chance. what is not random chance are the numbers that people pick. they pick a lot of lucky numbers. like birthdays, like the number seven. like the number three. you don't want to pick these numbers. because if you do, and you win, you will have to share with other people. and as mike said on the break, there is nothing worse than going up there with the big check and holding it with another guy who picked the same numbers as you. >> this is a big anxiety of mine. >> if you want to be a billionaire, just a millionaire. don't pick the lucky numbers. anything less than 31 gets picked too much because of birthdays.
so pick boring numbers. things that are like 34. 40, 46. numbers that people don't care about and are boring. if you win with these numbers you won't have to share and don't pick fortune cookie numbers. 110 people once shared the same lottery because they picked it off the same fortune cookie. these are serious matters. >> i'm going to pick it with the fortune cookie. >> and you'll win. >> because you are so generous. >> eric chemi, thank you. and alcoa kicking off earnings. and the r-word is looming large. how worried should you be about an earnings' recession. that's next. sophistication... ...redefined. introducing the all-new lexus rx and rx hybrid. agile handling. available 12.3-inch navigation screen and panorama glass roof.
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welcome back. checking in on alcoa, slightly higher after reporting an earnings beat for the first time in over a year. but some are worried we will see an earnings recession when it kicks into high gear. mike. >> that is what the estimates say. even if we beat by a couple of percentage points it is down a couple of quarters in a row. that explains why the market is having a hard time. it doesn't fore-tell this is it for quarters to come. >> and not with the profits, but
not yet with the u.s. economy though. >> we have silver linings. unemployment is good. inflation is quite low. we talked about the auto numbers earlier. consumers look happy right now. so i'm not too freaked out. >> we'll leave it there. "closing bell" ends and "fast money" begins right now. >> live from the nasdaq market site in new york city's times square, this is "fast money." i'm melissa lee. your panel on the board. breaking below $30 a barrel and that has gartman declaring a new commodities. and how low they could go. and biotech stocks crashing. and should you step in and buy. we'll ask the ceo of merck in an exclusive interview. and if you are looking for the next earnings winners, we have the three names