Forecast by Goldman Sachs today cutting its forecast on the price and that added some of the momentum there, and by the way, were still getting a lot of photographs from you folks around the country of what youre paying for gasoline. I saw the lowest price today coming in once again from oklahoma city. Theyre paying 1. 55 right now. Not too shabby. And so the debate about whether this should ultimately be a good thing for the u. S. Committee continues. Yes, it does. Jo and meanwhile, if you are a regular watcher of cnbc theres a good chance this man wants to hilt you with a massive tax hike. Top democrat Chris Van Hollen joins us to explain his plan for wall street and high earners to fund a jind middle class tax cut. Theres always took he may run for governor of maryland following martin omalley. We have two ceos of mega Drug Companies joining us. The heads of biogen and merck checking in from the Jpmorgan Health care conference. Would you have been seeing megs wonderful interviews all day today. Shell be joining us with those two gentlemen on the closing bell today. Looking forward to all that. Here is where we stand with an hour to go. The dow is off 100 points. Starting the week again on a down note. Off half a percent. The s p is off about 17 points 0. 8 and the nasdaq the underperformer today off 38. If were down 100 points or more on the dow, it would be six straight sessions where weve had triple digit moves for the dow. You go back to june of 13 to match that. That was the taper tantrum. This is almost the reverse of the taper tantrum. That was spurred by people talking about Interest Rates going up. This time around its Interest Rates going down. Which were going to talk about right now with tom from the sevens report. Hes part of our the closing bell exchange. Mark ibell is also with us so is Beth Ann Bovino anthony chan from chase and Rick Santelli joining us today as well. Tom, its all about oil, isnt it today . Yeah absolutely. As has been the case really since the beginning of december but its not just oil, its oil contagion. One of the best ways we can look at that is through xle, the energy etf. The market is following it lock step. Until that stabilizes im afraid the stock market is going to have a hard time generating any positive momentum. Does that make sense to you, anthony chan . I think eventually you will get a supply response and as that supply response occurs you will start to see prices stabilize, and dont forget you will also get a demand response with these low Energy Prices at some point. People will start demanding a lot more energy putting a little upward pressure. The combination of the supply destruction and the demand response i think over the next six months will in fact lead to more stable prices and the markets will calm down. Mark, weve had the debate many times on the closing bell, of whether Lower Oil Prices are good or bad for the economy net net. Whats your stand on that . Yeah i think if youre a developed market whether its the u. S. Europe japan, i think its good. Now, im not surprised the market is trading down this concert with it going down just because it dropped so rapidly. The average person will start feeling the impact of Lower Oil Prices when they start getting the credit card bills. So over all, i know were an Energy Producer and it hurts that segment of the market, but theres a couple hundred million americans that feel pretty good when theyre going to the pump. I think were in that beneficiary of cheap oil. Beth ann, this hearkens back to the jobs report friday with that disappointing wage growth number because if you started to see that pick up im guessing markets here would have a friendlier tone to them. But the fact thats not falling into place in your opinion how much of a concern is it and will it push back the feds ultimate response . The wage numbers were certainly disappointing. You saw pretty much a weak reading. However one thing i would note is in real wages thanks again to the gas pump its sort of like a pay raise at the pump. Thats one thing we have to keep in mind. Another thing is that while we did see some weak readings in terms of wages, we are expecting those to climb higher for three reasons. One, the jobs gains. Job creation is at a 15year high in the United States for 2014. That means that theres more demand. Another thing to take into account is the shortterm Unemployment Rate which recently has been a pretty good predictor of wage gains suggests we could see improvement there. And finally, the quit rate which is now at a sixyear high suggests theres more Bargaining Power for workers when they go and ask their bosses for a raise. Rick santelli, back to 190 on the tenyear. Whats going on in your arena . It is just so fascinating. Yes, 191 now. Lets consider these are going to be new low yield closes for tens going back to about the third week in may of 2013. But thats not the big news, bill. Here is the big news. Were at a 249 30year. Four basis points away from testing the alltime low yield close from july at 245. Whats going on . Shows you how much the curve has flattened. If you can consider in july we had a 138 low for tens 245 low for 30s, now you look at the distance between them it just leaps out. Were 50 basis points away from a 10 challenging. Were 3 basis points away from a 30. To me that continues to paint the story that all is not well with the Global Economy in addition to of course the effective trade buying our paper versus much lower paper pretty much all across the globe. We heard that from fed officials saying lower rates affecting that demand for paper. Lets go to Jackie Deangelis keeping an eye on oil prices which seem to be the lynch pin of this market and even as soon as we close today or settled, i should say, there still continues to be relentless downward pressure. Thats exactly right, kelly. A lot of selling pressure into the close. We didnt close under 46 but we hit that mark today. 46. 07 is where we stood, down 2. 29. Of course, goldman taking its average price forecast for wti in 2015 down was part of the problem, but the other issue is more sort of geopolitical commentary from opec members. You have venezuela and iran really trying to press on the cartel to do something about production. These are countries that are really getting squeezed when their break even for oil is around 100 a barrel. Theyre really feeling it. But opec digging its heels in the sand saying it will not do anything to reduce the bleeding and traders think prices are going to go lower from here. Throw in with that a stronger dollar today and it was the perfect storm to go lower. Back to you. Why are natural gas futures down as much as they are . Were in the deep freeze in much of the country. Are firewood futures up or something . Is that how were heating our homes . I dont understand that . Jackie, thanks very much. Thanks. Anthony chan whats your version of why were seeing this flattening of the yield curve rick was just describing here . Is it forecasting Slower Growth or is it just because european investors cant get enough of our bonds because theyre not getting anything at home right now . I think when you look at the bund and i know rick would agree with that, you look at the low tenyear bund yields people dont want to get into bunds so they get into the treasury market. The u. S. Economy will grow at 3 . People tell you the labor market is not strong. I agree with beth ann. When you see the labor market job growth nonfarm payrolls grew by 2. 5 even population growth if you dont believe the labor force grew by just 0. 1 labor markets are getting tighter. Thats wage pressure. I think the yield curve is remaining flat because theres simply the prospects that on january 22nd the ecb is going to flood the market with quantitative easing and all that is going to continue to put downward pressure and make it a lot more competitive with u. S. Treasuries. Lets say the ecb does go ahead with this step of quaezing. Quaezing quantitative easing. We dont know if they will or if they wont, but that means the European Central bank is going to be buying a lot more bonds . Isnt the problem right now if you want to frame it that way we already have so many buyers of government bonds . Well thats exactly right. You look at ecb qe and you say what are they going to do push rates lower . Thats already too low. Thats part of the problem. But really its about inflation. Thats what ecb qe is about. Trying to stimulate inflation in the eu and economic growth. Whether or not theyre going to be successful well see but im pretty sure theyre going to try it on january 22nd. Do you think, tom, if the European Central bank starts buying bonds the People Holding them right now will start buying other assets riskier ones in europe, maybe ones here . Will that support europes stock market, maybe encourage people to go out into the risk curve and buy some loans, make some loans . Yeah, i think over time, at least with regards to stocks. The with unthingung thing we know about qe qe make nominal stock prices go up. We know when the central Bank Launches qe generally speaking nominal stock prices goes up. I think it will be good for european stocks. The european economy, well have to see. We saw that here in our own stock market in the last few years. Mark lets talk to investors for a moment then. Where do you see some possible growth here or are you looking for value . Would you look to energy yet at this point . Yeah i think to tee it off on the last point a from a multiasset diversified portfolio, i think europe could be the surprise story, not because the economies are Getting Better but qe has worked here its worked in japan from a stock market effect, i think with the currency coming down thats the first place to look. I think energy gets interesting. You move to 55 a barrel thats a 20 move up from here. I got to believe some hedge funds. And its interesting how speculators got the blame when oil went up so high. They dont get talked about as much as probably being the reasons its come down so low. I have to believe theyre going to start engaging in that trade. That would be a nice move for the year. Dont you think people have to start looking at that. I know we have to go. Do you think it was the speculators who pushed oil prices down or who had to jump once the house caught fire . I think its everything. Its athe hedge funds, supply iraq libya supply lower demand worldwide. It all adds up but they certainly got all the blame on the upside and they dont get talked about as much now that its come on the downside. Somebody pick up Rick Santelli off the Trading Floor after mark said qe has worked here in the u. S. Well it all depends on your definition of work. From a stock market effect it sure has. There you go. Thanks everybody. Good to see you this afternoon. All right. We have 49 minutes left in the trading session. Setting the stage the dow is down 103 points. Was down 165. Right now weve got six straight trading sessions to begin the new year. Every single trading day this year in 2015 weve seen a triple digit move either up or down in the Dow Jones Industrial average. Well see if that stay this is way as we head toward the close. Weve got a couple pharmaceutical heavyweights speaking with us live from the Jpmorgan Health care conference out in San Francisco coming up. The ceos of biogen and merck to discuss their most promising drugs in the taxline and a whole lot more. And congressman Chris Van Hollen of maryland proposing hot button tax breaks for the middle class to be paid for by pretty much cnbc viewers. Well tell you the details and mr. Van hollen will be here to state his case coming up. Plus Jeremy Siegel says the do you will hit 20,000 but he says it will be a bumpy ride getting there. Dont go anywhere. Were back in two. [container door opening] what makes it an suv is what you can get into it. [container door closing] what makes it an nx is what you can get out of it. Introducing the firstever lexus nx turbo and hybrid. Once you go beyond utility theres no going back. Well tell you the details and female announcer during sleep trains huge year end Clearance Sale, get beautyrest, posturepedic even tempurpedic mattress sets at low clearance prices. Plus, free sameday delivery, setup and removal of your old set. And through monday, get 3 years interestfree financing on selected models. But hurry this special financing offer ends Martin Luther king jr. Day. Dont miss the year end Clearance Sale at sleep train. Your ticket to a better nights sleep i stand corrected by my own producer. I figured my Close Friends and twitter would call me on this one. We havent had a triple digit move on the dow every trading day of this year. First friday, january 2 ndnd, it was only a double digit move. I thought we said that one didnt count. It didnt count because kelly wasnt here. It would be six Straight Days though. Cnbc has been bringing you some of the biggest names in the Health Care Industry from the Jpmorgan Health care conference in San Francisco today. Our own meg terrell is there. She joins us with the ceo of biogen. Meg . Kelly and bill thank you so much. Im joined by the ceo of biogen. Its been a very busy cycle for you. Lets start with your ms drug it was the Pipeline Data that just read out. Tell us about the way the market should respond to that. It was a little bit of a mixed reaction. Were very encouraged by the data. It was a trial intended to determine whether or not the compound had the ability to induce remile nation and we believe it did demonstrate that. Thats actually repairing the nerve damage you see in multiple sclerosis. In to repair the nerve damage. We did not have an impact on the disease process in that area so some people have had questions about that but we dont believe those issues are relevant to ms. The most relevant measure for ms is whether or not we can induce remylenation. So theres potential to start reversing some of the damage. That would be the hope. We have a trial going on in multiple sclerosis going on now. I would say the results of this trial certainly increase our optimism that that trial will be positive. Lets talk about alzheimers. I think you surprised a lot of people with the data. Theres been so little success in alzheimers. How optimistic are you thats going to bear out . I think the data is quite compelling. It was a one year trial. There were 200 patients in the trial. We showed a statistically significant dose and time related reduction in the amyloid plaque in the brains of those patients and improvement in two measures of cognition. The data was surprising to us that we could show that in such a small trial but extremely encouraging and were gearing up to start a phase three trial just as fast as we can. When do you expect that phase three to start . It will start over the course of the year. Were in discussion with the regulators and finalizing the design of the trial, but well get that up and running as soon as we can. Lets talk about building your pipeline. You Just Announced a deal over the weekend building up a slate of experimental medicines in pain. Tell us about the decision to buy that company. We bought a Company Called convergence, a Little Company in the uk thats expert in the development of drugs for pain. This particular asset phase two compound that they had is has very good phase two data and targets a target that is amazingly well validated. People who dont have this who have a mutation in the gene cant feel pain. Conversely, patients who have an active version are hypersensitive to pain. Modulating this does impact the ability to feel pain. This compounded demonstrated in phase two it can do that. Were excited well hopefully bring forward a compound that will help patients. We hope to branch out. Youre starting with very small indication in pain but the pain could be a huge market for you guys. What is the opportunity for these drugs . Well it can be huge as you said. We have to start in a focused way and test these drugs in a single disease. We have another drug targeted for pain and well have phase two data on that compound over the course of this year as well. Pain is an important area. Theres need for better pain drug that is really can control pain well without being narcotics, and we think thats a significant need and a significant opportunity for us. Lets talk about one of the concerns weighing on the minds of executives and probably investors in biotech and thats drug pricing and reimbursement. Weve seen a lot of pressure in hepatitis c drugs. Now, express scrips told us this could expand into other therapeutic areas where there are a lot of drugs on the market. The price of drugs has been going up. Theres no thats clear. I dont anticipate that drug prices will rise as rapidly as they have in the past. We have already moderated our price increases weve been taking but in the end the reimbursement rates for drugs will be related to the benefits they bring to patients and payers. Thats why were working on the indicators we are. Alzheimers disease repair and multiple color multiple sclerosis, als, parkinsons all those diseases need a significant level of improvement. If we bring forward drugs that make a real difference in the lives of patients provide value to those patients theyll continue to get reimbursed at good levels. One last question for you, a quick one. Biotech had a tremendous 2014 outperforming the Broader Market for the fifth year in a row. Can it do it again . I would hope so. The reason i say that is i think the outperformance is due to substance. Its not hype. Its not over expectations. Its the fact that companies have brought forward a lot of very interesting new drugs. Weve done that. So we are seeing really better therapy for a lot of diseases and therapy for diseases that were not treatable before and i expect that to continue in 15 and beyond. Thank you so much for joining us. Thank you, meg. Appreciate it. Bill and kelly, back to you guys. All right. Our meg terrell. Thank you so much. Its interesting, bill to hear his remarks that he thinks the pace of drug pricing increases will be lower in the future. That of course a flash point everywhere from washington potentially to the investor kyle bass and well bring this issue up again next hour when we hear from the ceo. Very much so. Of merck. 40 minutes to go. The dow trying to keep from having a triple digit down day. The dow is up 92 points right now. The s p off 15 and the nasdaq 37. No thanks to oil which has been down 5 today. Tough times at the Container Stores lowering Sales Guidance late last week. Retailers ceo will be joining us. Well find out what his plans are to turn things around. Alcoa posting results after the close. Well get you the numbers the second they hit the tape and well brings you an exclusive interview with alcoas ceo Klaus Kleinfeld. You wont want to miss a moment of that discussion coming up. Welcome back. The drop in oil prices continues. We just saw brent crude settling below 50 for first time in nearly six years, and meanwhile exxon and chevron as expected are the underperformers today on the dow anyway. Theyre off 2 respectively as that index overall hangs in to the tune of about minus 0. 64 off 113 points. Dominic chu is here today. I didnt see him in the newsroom earlier. Hes tracking the movers. I have been very stealthy. Lets talk about stocks that arent being stealthy at all. Lets talk about tiffanys having its worst day in a decade after it cut its guidance for the year citing a disappointing Holiday Shopping period. On the Technology Size sandisk plummeting after saying Fourth Quarter sales would come in below prior forecasts due to weaker demands for retail products. Down 14. 5 . A different story for lululemon. Its trading higher after raising guidance crediting improving trends and stronger holiday sales. Those shares up 7. 5 in an otherwise down tape. Back over to you guys. Some big swings today, dom. Thank you very much. Another dock thats beenstock thats been on the move is the Container Store. Down 50 in the past year. What is the company doing to turn things around . Joining us is the ceo kip tyndall and National Retail federation matthew shea because it was announced kip has been elected the new chairman of nrfs board of directors. Good to see you both. Thanks for joining us today. Thanks bill. Thank you. Good to see you. Kip, lets talk business first. You guys lowered guidance last week. Whats going on . Did you have a rough Holiday Season or what happened . Well no not at all. We had a little frustrated with our traffic numbers. All of our other metrics, earnings were great, average ticket was great, the new stores are doing great. Gna was excellent. Traffic was down a point or two below our expectations and we also announced thursday that traffic is up so far for the Fourth Quarter, sales are up for the Fourth Quarter, so, you know, theres a lot of metrics involved. Were very pleased with almost all of the metrics. Traffic bugged us a little bit in the second and Third Quarter and now were thrilled to see that up in the Fourth Quarter. Were very happy with the start to our office sale which is a big, big thing to the container thing in the Fourth Quarter. We put our best selling product on sale and people are receiving that very, very well. Matthew, as kip is bound to become the new chairman of the National Retail federation, do you think what hes experiencing in some of the traffic declines over the Holiday Season is indicative of whats happening with retail overall . No. Kelly, i think were glad to have you here broadcasting from the show. Weve got 34,000 people here this week. Theres a great deal of energy and enthusiasm here. The numbers are increasing pretty significantly, up 10 in terms of attendees, up 20 in terms of exhibitors and retail companies, and we headed into the end of the year with gas prices low, Consumer Confidence rising stock market in relative terms doing very well and we think that positions us well to get off to the beginning of the year in a good way, and, in fact, were very interested to see how the bed between courtney and Steve Liesman goes when we announce our holiday final results on wednesday morning. Who owes whom 100 bucks. We feel great about the show, great about this quarter, and i think the outlook at this big show is just terrific right now. But kip, lets face it you came public what in 2013 and your stock has never looked back from that time frame. You were down 50 in the last year. So clearly something is going on especially now. Youre at a price point where you would think that you would be sensitive to the lower gasoline prices that people have been paying for the last several months now. So im wondering, you know, i know youre putting a positive spin on it which is what your job is but what is going on there do you think . Well bill the stock is still well over 30 times earnings. We came out a year ago at 18. It popped to 36 and doubled the first day. It went on to 46, which was roughly 150 times earnings. So the Container Store stock is still trading at a little over 30 times earnings and its been very volatile more volatile than we want but, you know, we feel great about the near term medium term future. All of our metrics are good. We think weve resolve the traffic issue that is bugged us a little bit in the second and Third Quarter and were looking forward to a great year. Kip, explain to me as just the general public why i need to go into the Container Store, why i should go into the Container Store. What Value Proposition that offers me as a shopper when forget you guys for anybody out there, im getting a great experience online through my mobile device through social interactions, et cetera. Explain to me the Value Proposition for walking into the Container Store today. Well first of all, the vast majority of our products and, you know, im anxious to talk with matt about the National RetailFederation Show but the vast majority of the Container Stores products are proprietary, exclusive in may tour, theyre not available anywhere else. Thats the best defense against huge online merchants and we also sell solutions. What really thrills me is the Container Store, we solve your problem. Were selling solutions not items. Thats harder to do online than it is in the store with an experienced, well trained salesperson. Thats the way we keep vivacious, wonderful experiences at the bricks and mortar locations and we provide all of that that we can online but the solution selling online is tougher than items online. Lets talk about hey, matt, lets talk about retail for a second. More than one wall street analyst right now has said after this Holiday Season that maybe we are overretailed in this country and there have been these stories that have gone around anecdotally about the number of malls in this country that are falling by the wayside because of the number of stores that are going out of business and stores being closed. Jcpenney just now announcing. Are we over retailed . I know you have more retailers coming out the door there at the jabbot center but are we overretailed in this country right now . I think what were see something consumers and retailers are interacting in new ways and theyre taking advantage of all the new technology which of which is on display at the show. We saw it during the Holiday Season. The conversation has changed, and so now the winners and losers in retail are those that have adapted to those technologies and really retail is the most consumer centric driven industry in the world, so where consumers go retailers have to lead and try to be there in advance to meet their needs and people want to interact differently. In some cases that means it means more storage, in some cases, fewer. In some cases it means a more sophisticated job of blending the dige jal Online Mobile experience with the instore experience and we think historically weve seen in the last couple years, we think it will be true this year as well over the Holiday Season the difference between winners and losers in retail are those that have been able to effectively merge those channels and give customers a seamless interactive experience. Giving the customer exactly what she wants. If she that day wants to order online and pick up at the store, youre literally meeting her at the curb with two babies in the car seat in the backseat and giving her the product without even coming into the store. In a way theyre your existing Distribution Centers for the product as well. Guys, thank you so much. We know this time of year can often make or break it for the big guys. We have 30 minutes to go. Dow is off 115 points. Pressure on oil, treasuries are rallying again today. Plenty to keep an eye on as we head towards the close. Coming up did the Islamic State hack the pentagons social media accounts today and was it a preview of some very scary coming attractions . Were going to go live to washington for the latest developments if you havent heard this story yet. Up next Central Banks actually want inflation and arent getting it. Why are some are very worried about it. Steve liesman and Michelle Carusocabrera and ian shepherd shepherdson hash this one out when we come back. Mmm, a perfect 177degrees. And thats why this road warrior rents from national. I can bypass the counter and go straight to my car. And i dont have to talk to any humans, unless i want to. And i dont. And national lets me choose any car in the aisle. Control. Its so, whats the word . Sexy. Go national. Go like a pro. Developments if you havent ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to developments if you havent i dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Moving lower here the dow down 133 points now. Down 165 at the lows of the session, and if you just joined us, weve been keeping track of the stats so far for 2015. This would be the sixth trading session in a row of triple digit moves by the dow either up or down. Something we havent seen since june of 13. Wow. Meantime, employment, wages, inflation inflation, my goodness, economists have been perplexed about why wages and inflation are still so low even as job growth surges and Interest Rates remain effectively at zero. So joining us now, Ian Shepherdson from pantheon macro economics with cnbcs Michelle Carusocabrera and Steve Liesman. Steve, lets frame what were talking about. The Unemployment Rate keeps falling and yet theres no inflation. Not only that kelly, but the wage rates are declining, at least they did in the one report we got for december and i think this is posing a challenge to policymakers thats the flip side of the challenge they faced in the 70s. You remember stagflation which was rising inflation and rising unemployment. That wasnt supposed to happen. It destroyed this concept we had of the phillips curve which posits this relationship between unemployment and inflation. Well, now we have the other side of it. We have declining unemployment and declining inflation or low inflation and wages falling as well. Now, again, its one report but if this trend continues, i think its going to create a real challenge for policymakers and their efforts and intentions to raise rates this year. Ian, is it possible theres just more slack in the labor force than these numbers suggest . I mean thats something the fed has been watching very carefully and addressing in each of their statements after their meetings. They keep watching the slack thats been in the labor force, and when that goes away thats when Wage Inflation starts to perk up. Yeah. Half the fed think that is slack is pretty much gone now and the other half thinks it isnt, but the wages data are kind of ambiguous. Until that one report in december where we saw the little dip, which i think is a fluke, but before that the trend was 2 yearoveryear and not going anywhere at all. Neither side could really deliver the knockout blow to the others and say were definitely right. What im interested in is whether we get that december number reversing and i think we will. Also at the end of the month we get the feds favorite measure of wage cost which is the employment cost index, and the wage component of that number has moved up quite significantly in the Third Quarter of last year. If it does it again in the Fourth Quarter, i think the case will become much stronger that the Hourly Earnings numbers which we all get excited about are not really very reliable and the true wage picture probably is a bit stronger than the Hourly Earnings numbers suggests. With unemployment barrelling down towards 5 by, i dont know, midyear, i think at that point the fed is going to find it much easier to say, look weve got to begin to normalize. After all rates are at super emergency levels and the economy is definitely not in any sort of super emergency anymore. Michelle its true wages arent the broadest picture of compensation. Companies have to pay benefits too, and those are increasing. Are we just not looking broadly enough at whats going on . I have been speaking with a lot of hedge funds because of the situation in europe, et cetera, and one of the things i stumbled across is that several of them not all of them but theres a growing vocal minority that believe the fed will not raise Interest Rates this year. Consensus, of course, is theyre going to do that because of employment. And when i say theyre not why . But employment is Getting Better. Theyre like forget about employment. Inflation is too low and why on earth would they raise rates when europe is in the situation and japan is in the situation that its in. What role does all of that play into this . Were not operating in a vacuum here. No. We know whats going on in europe but even though there are those who argue if we were in a vacuum, they would look at Inflation Numbers and say theres no reason for the fed to raise rates here. Why would you do it . Right. Steve, weve heard some of that lately as well from some of the fed members themselves. Yeah Charlie Evans says we shouldnt do it until 2016 and reading through the lines of what Dennis Lockhart said from atlanta today, i think his point was you know what . Im still in mid 2015 on a rate hike but i can be convinced otherwise if i dont have confidence the inflation rate is going to go up. I think theres more to it. If you think about the levers of Monetary Policy control, think about an airplane where you pull up and the plane goes up or you push down and the plane goes down. Thats not really working and i think what happens is the fed loses the ability, first of all, to understand what the right policy is but also how to guide the market. If its not Wage Inflation, if its not price inflation, then how and why does the fed say to the market were increasing rates and here is the reason why . Steve, are we so sure though that the labor market is tight . Im understanding obviously its tightening, things are Getting Better, but what if, for example, we have to wait for the broadest gauge of unemployment to come down well below 10 . What if were just not there yet . Youre talking obviously about the u6, a broader measure of labor slack in the economy which is now above 11 still and coming down. That is not the general view of the federal reserve, kelly. I think its a good point, but in general theyve looked to the Unemployment Rate as still the best measure. Some of them use a broader dashboard of indices, of labor slack in the economy, but fundamentally what we see here is we see the unplount rate coming down and the failure of wages to respond and the failure of broader inflation and its well to remember what the next several months will look like. I think ian will agree with this, its going to be hard to get a positive inflation picture given not only the decline in the price of oil but how thats going to work its way through the system. I think that implications of this, think about it, think about all the assumptions we have made that the fed is going to raise rates and what that means. That means the dollar of course, is going to keep going up this year right . What if its not . Right . Its already exactly. The fed is not doing quantitative easing so Interest Rates are going to go up. Exactly. And they havent. Almost record outflows from loan funds in december. This is an incredibly consequential question. I think its ironic the fed is getting the growth rate it wants and it wants more inflation. Once upon a time the fed would want higher growth and lower inflation. Were there now. Steve, you wait. I think they fear becoming japan is the problem. I think thats absolutely right. I think everything that theyve said says that the bigger mistake they think they can make is one in which they move too early, and its not hard to imagine if you look at the fed funds futures market guys and, again, its hard to argue with the market here theyre at 50 basis points for december 2015. Thats one or two hikes and i dont know if it goes any lower than that but right now the market is not seeing a whole lot of fed action this year. Weve got to go at this point. Thank you all for joining us. Ian, good to see you. Thank you for being with us as we talk about this Wage Inflation conundrum thats out there right now. You could put up the inflation break evens but well save you the headache. Well show whats happening with markets and they are tracking the move lower there thats keyed by oil, et cetera. By the way, if Inflation Expectations go down what does that mean . It means the nominal Interest Rates today, bill are actually moving up. Tightening is already happening and perhaps thats im gesticulating wildly and now im back in picture. Shes talking like Kenny Polcari now. U. S. Central commands twitter and youtube accounts hacked. The latest developments including who could have been behind it from eamon javers. Ant later merck on a tear up 10 . Another first on cnbc interview. Plenty to discuss, including fast tracking drug approvals by regulators competition from generics and why the Business Model for prescription drugs may now be in the crosshairs of a powerful activist investor. You wont want to miss it. A Td Ameritrade ira. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better Td Ameritrade. You got this. Welcome back. Let me just tell them right quick. Art carbon came by and said that accounts for the little bounce were seeing here on the indexes. Meanwhile, centcom social media accounts hacked. Eamon javers is here with the latest developments from washington. Centcom is the u. S. Combat and command responsible for the middle east as well as a number of other hotspots around the world and as of this hour theyre now back in charge of their twitter account and their youtube account which were both hacked earlier today. Apparently by a group or somebody sympathetic to isis. It was ominous there for a while earlier today to look at that twitter account and look at the youtube account and see these isis sympathetic messages out there including the message american soldiers were coming watch your back. Now officials are telling nbc newss Jim Miklaszewski there was nothing sensitive or classified on the twitter or youtube account and this is more a case of embarrassment than any actual damage to the pentagon. Nonetheless, guys very embarrassing for the u. S. Military to be hacked in its public accounts on a day when the president of the United States was out speaking about cyber security, guys. Eamon, thats for sure. Our eamon javers in washington. Were keeping an eye on the do you. We should mention there are a number of green names today. You have the likes of cisco. You have the likes of dupont, verizon, walmart, visa United Technologies all in the green at the moment. Energy has been the tough one today because of the 5 decline in oil but look at this. Weve cut the losses in half for the dow. Now down 60 points with all the stock coming to buy here on the close. The s p down 13. Nasdaq down 33. Still to come congressman Chris Van Hollen creating a storm of controversy calling for more tax breaks on the middle class to be paid for by what he calls wall street high rollers. That would be anyone who makes a lot of money. Van hollen makes his case coming up on the closing bell. Plus Jeremy Siegel on what could drive the dow to 20,000 this year. Yes, 20,000 perhaps with some twists and turns along the way that hell tell us about. Stay tuned. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Seven minutes left and were pulling back just a little bit, down 76 points on the industrial average with the s p down 14 the nasdaq down 36. If you just joined us oil has been in another slide today. The price of u. S. Crude down about 5 in todays session. Paul shatz a joining me and matt cheslock. Good too see you both. What do you think, paul . Weve had to this point five consecutive triple digit moves for the dow. Tremendous volatility. Do you see that continuing . Whats the message of the market here . Its not that volatile historically but because its been so quiet so we should have these every day. Volatility will wring itself up. The bulls have to step up in the next five or ten trading days. They got to make a new high or else youre probably heading sub 17,000. Do you feel like we have ten days before and the bulls have to make a new high here. Technically it will look kind of crummy in the short term. I will give them the benefit of the doubt. Since 2012 they havent let us down. Can you make a new high as thee cb approaches their deadline . Thats the question. People are very cautious and were seeing that in trading. Biotechs are holding us up. Two good mergers this morning and usually that would carry us higher. That ecb thats way down the road when you consider we have all the earnings coming out starting with alcoa tonight. Weve had some good forecasts today. One good one, one bad one and the stock acted accordingly. I think until then weve had a great trading range between 17,200 and 18,000. As far as the dow goes you buy it. It goes to 18,000 you sell it a little bit. There needs to be a catalyst to get us over the next hump. I dont know when were going to see it. I dont know if ten days is enough. Stay there, well come back with these two. Well see how we do with the closing countdown in a moment and then here it comes, earnings season. After the bell alcoa reports. Well have the numbers, the second it hits the tape and then per tradition alcoas ceo Klaus Kleinfeld will be speaking with us before he speaks to analysts. You want to hear what he says about the cost of aluminum. Youre watching cnbc, first in business worldwide. You stay up. You listen. You laugh. You worry. You do whatever it takes to take care of your family. And when its time to plan for your familys future were here for you. Were legalzoom, and for over 10 years weve helped families just like yours with wills, Living Trusts and more. Visit us today for legal help you can count on. Legalzoom. Legal help is here. These days, the most important person in your business could be a software developer. So, hows the app coming . Weve got to make something great. Hows the app coming . Weve got to do it fast. Lets do this on bluemix. You can build apps with analytics, big data, even ibm watson. That could give us the edge. Lets do this on bluemix. It can provide code for you. We could be first to market. Because being best is priority one. Being first is priority one. Theres a new way to work and its made with ibm. Welcome back. This is the dow. Today oil had the big weight there because of the decline. Goldman sachs lowering its price forecast and that took the wind out of that sail. Who knows we may have a triple digit move after all on the industrial average. That would be six sessions in a row that weve seen that happen this year. Let me show you the price of oil itself. 5 decline in wti u. S. Crude. There it is down to 45. 90 and brent was down more. The spread between these two is razor thin. The tenyear yield back to 1. 90 for a time. Remember 1. 88 is something weve been watching. That was the low in october and Rick Santelli was pointing out the yield on the 30year bond hit 2. 49. Were only a two basis points away from an alltime low. Youre a stock guy. Weve been long treasuries tlt, all of 2014. Youre not ready to give that up yet . Were getting close. My downside target on yields is 1. 55 and 2. 80 on the upside. Certainly im getting very close to taking some off the table. What about oil . Well i think oil listen between here and 40, but its not oil should not v but bottom. Well have volatility. Eventually i think aisleoil hits 60 bucks this year. It was 80 to 100 for so long. Its just a spike low per. Are you watching oil more than you watch bonds to see what stocks are going to do . Oil caused us this drop today. As an equity trader im looking at oil. Its not really bonds right now. Thank you, guys. Thank you for joining us. And we may get that triple digit decline now for the dow. Well see. But weve been talking oil, been talking Interest Rates, but now well talk earnings. Here comes alcoa to start the parade of reports for the Fourth Quarter and youll hear from ceo Klaus Kleinfeld exclusively on the second hour of the closing bell with kelly evans. Im see you tomorrow, kel. Thank you, bill. Welcome to the closing bell, everybody. Im kelly evans and here is how were finishing up this monday. Pretty much a losing day across wall street. The dow though avoiding its sixth straight triple digit decline but still weve had quite a run of them early in the new year. The industrials finishing off about 92 points with significant buys on the close. You heard from art cashin about those. The s p off 16 points and the nasdaq off 39 or about 0. 8 . Lets get to it with the panel. A ton of earnings on tap. Big interviews coming up. Car cardiff joins us with mare ji thompson and bob pisani and tim seymour. Good afternoon, everybody. Cardiff, is this all goldmans fault . I dont know. Goldmans report on oil today is very good. If you have get your hands on it, i recommend it. I want to say the takeaway is any rebound in oil prices would probably be more u shaped than v shaped. They talk about Storage Capacity. The market is in a contango but Storage Capacity is very high. Second thing they hit on is the Business Model, right . How manufacturing is essentially a model for what the shale industry is now and what Phil Verlager calls manufacturing in a sense. The point is if you look at whats happening with oil prices now, they dont just sneadnet to stay beneath break evens. Now producers are invent advisecentivized to find technological improvements. Wasnt goldman the guys who had 150 call on oil . 200. 200. Or am i being rude . Tim, you were saying as high as 200. It was bandied about, yes. The point being that at the time you can always kind of create a situation where the current trend continues and i think the reminder today that the trend were in is significantly counsel for some time was all the market needed to reinforce that. We looked this up last week. Theres only five times in the last 30 years where oil dropped 50 in six months and all five times oil was up six months later on average of 50 . If the historic trend follows, oil has gone from 100 to 50 and it will be 75 by the second half of the year thats if the historic trend follows. I was going to say its worth noting not all of this is a supply side shock. First of all, that would be good news. Second of all, it can come back. I was going to say whats the difference between what happened in those last five times . Was it supply or demand . This appears to be more of a demand side so its a slightly different scenario. Let me put it to you this way, you buy 7,000 worth of furniture. If oil is above 85 a barrel this year, you get a refund. I get a refund . If its above 85 i dont think id take that but 75. Tim seymour, how does that sound to you . Im going to stay away from the furniture side of the metaphor but i will say that i think around 70 youre i think at 65 youre kind of at a medium term marginal price of oil. I think were going to find that the place that oil prices can get back to. If you look at the crb, the commodity index, were back to where we were at the lows of the market in march of 2009. So the entire commodities spectrum has been beaten and to say that we dont have that kind of demand across the board, i would argue a little differently than mary. I think this is a supply response across the board throughout the commodity complex, and you dont have china on the demand side but its really about supply. I was going to say, tim, i apologize for that. Yes, definitely a supply issue at this time but there seems to be i think theres a growing expectation that this could turn into a demand issue as well given the growing slowing growth across the Global Economy and so some people are concerned about that as well. Its not purely i would say supply but there is an element of concern about demand going forward. I bring it up as well because at the end of the program we are going to have on a guy who has a houstonbased Furniture Store who is offering exactly this. Is that the whole point . I was trying to understand that. I wasnt just pulling i thought you pulled something off the top of your head. No. Its an interesting idea, bob, which i like it. If gets back to what are the expectations and how much do people think we could spring off the lows weve seen just like last time versus what goldmans report is getting to and a lot of people in the market just throwing in the towel. Look i focus on the macro side and very generally speaking this is an overwhelmingly good thing. There are huge compensating benefits outside of the energy sector. I want to say i think the pessimism bias that surrounds this has gotten a little too strong. People are trying to find the points of vulnerability and i think theyre focusing a little too much earnings are down 41 for the oil patch for the first quarter. Thats why were having problems. Hold that thought for a second. Speaking of earnings were kicking off with alcoas results. Morgan brennan has the numbers. Kelly, thats right. So alcoa releasing Fourth Quarter earnings. Adjusted 33 cents per share. That beats street consensus of 29 cents so a 4 cent beat on the bottom line. Revenue 6. 38 billion. Again, better than street expectations of 4 6. 04 billion. A 14 increase yearoveryear in sales. Also overall 2014 numbers both top and bottom line coming in better than expected. Alcoa saying this was the strongest full year operating results since 2008. A few outlooks for you here for 2013. Aerospace sales expected to increase 9 to 10 in 2015. Auto production expected to increase 2 to 4 . Also global aluminum demand expected by the company to increase 7 . So, again, a beat on the top and blue line for Fourth Quarter results for alcoa. Also for their full year versus what analysts were expecting. Right now were seeing the stock trade up 2 in afterhours. Kelly, back to you. Morgan thank you so much. And joining us now to talk more about the numbers and a krnz exclusive is alcoa ceo Klaus Kleinfeld and cnbcs very own jim cramer most of mad money. A warm welcome to you both. Klaus, well begin with you. Youve been reshaping, if you will transforming this business from one that just produces aluminum to one that makes a whole range of products. Where are we in this transformation . Well, if you look at the Fourth Quarter, its really capping off a wonderful accelerated transformation. You just heard the numbers. If you look at the revenues up 14 , and by the way, 50 of that is driven purely by organic growth. The profitability is up and literally we have i would almost call it a business trifecta. We have three groups and all of the three groups are performing very, very well. You go to the down stream business the down stream business now has its 19th consecutive quarter of ety improvement without the special effects we had in the quarter. You look at the midstream business midstream business substantially improved performance yearoveryear. Really substantially. And thinen you look at the commodity business, were improving our profitability. 13th consecutive quarter of improved profits there and this is not just a lucky 13. We believe thats accelerateing the transformation and showing in the Fourth Quarter and the yearoveryear numbers and thats good. And, jim . Mr. Cramer . Yeah klaus, congratulations. One of the things i have always talked about proprietary, i love the things youre trying to do in aerospace but the aluminum number jumps out. Is that sustainable. You beat by 64 million. You have strong pricing and low energy costs. A gigantic beat. Can that continue in 2015 . Well look i mean lets start with 2014. I mean because language is a very ambiguous thing. If i look at 2014 i think i would characterize 2014 in the general economic structure, not Fourth Quarter, Fourth Quarter was great, but general economy i thought was decent. Now, if you go to 2015 i mean, i see all the volatility in the world, but then again we look at our end markets, we look at whats happening regionally and i think it has the potential to stay that way, to also be a decent 2015. We had today a lot of discussion about oil price, and last time we talked i said that most people most economists have not built in the oil price factors. Now its very hard to predict where oil is going to go. It could go up again, but if you look at what people have come 0u9, experts have come out over the last weeks, they pretty much assume that if you have a barrel of oil roughly at 40, it could actually give an impact between 0. 4 increase of worldwide gdp to 0. 8 increase in worldwide gdp. You see places like china thats importing a lot where the impact is bigger on the higher end of this. So i would say 2015 has an opportunity even in light of all of the volatility to become a decent year. Klaus, i just have to ask, were all trying to understand why prices and not just oil prices but iron ore prices and copper prices and other prices aluminum was hit earlier and has bounced back a little bit, are so low when youre talking about a Global Economy in 2015 where you see still a pretty decent increase in demand generally descendde decent trends if not spectacular growth. Why the disconnect . Is it speculators being driven out of the market . Other players . A finance effect in other words . And if not why and how can there be this real drop in prices across the board and yet what seems to be a decent economy, some decent demand growth . First, lets also be clear. We are projecting another 7 rise in aluminum demand worldwide for 2015 and this is basically 10 Percentage Points increase in china and 4 Percentage Points increase in the World Without china. So youre right. We continue to see demand increasing and probably higher than in many other of the commodities given the capabilities of aluminum. The other thing you ask, you know, i think thats the big con numb drum nun drum. There is a lot of disconnect. I wish if i could predict the regional premiums but nobody can in fact. The regional premiums are partly the closest thing to reflecting the real physical demand and supply situation thats going on. For us we have taken a different approach here. Weve taken the approach we can control this outside world so we want to make sure that we in spite of whats going on outside of us we have a competitive, a very highly competitive commodity business and thats been behind all of the actions that weve taken on the commodity side. If you look at what weve done in the last years alone since this crisis started, i mean weve sold we curtailed, weve closed businesses. 31 of our smelting business currently is either 10e8dsold closed or curtailed. In addition to that if you look at the Fourth Quarter where we basically sold our stake in the u. S. In mt. Holly. We sold our stake in the jamaica refinery. So were coming down on the costs because were reduceing our cost position. Basically i cant predict what prices are going to be but what i can predict under economic theory, theyre not going to be lower if you are in the lowest percentile. Youre going to make money. Thats the whole idea. The second engine were adding is the value add engine. Thats where all of this innovation comes in automotive innovation today. The detroit auto show. The f150. This is the first allaluminum vehicle on the volume side hitting the u. S. A lot of good things going on there. Thats the philosophy were following. I followed your numbers closely. It looks like you take aerospace and made a big met. This is a big move for you. Do you think you can get double digit growth in aerospace this year . In terms of what . Well you know you look when you go over the Third Quarter versus Fourth Quarter, you raised your growth rate for aerospace. Yes. And youre that confident . We did. Why are you that confident . Yes, very confident. Just look at what boeing came out three weeks ago. Its the highest number theyve ever had. And just look at the backlog. Look at the order volumes that boeing and airbus have been generating in 2014. Airbus is supposed to give official numbers out tomorrow. Boeing had a very very impressive number already out in december. And then look at the backlog. Youre talking about an interesting that used to be cyclical but through very very good action of the industry players, i mean they have generated a backlog thats at eight years. Eight years of an increased 2014 production. If you were to calculate it with 2013 production levels you actually would get to nine years of backlog. Thats a fascinating way to put it. Thank you for joining us this afternoon. Shares still reacting positively to another earnings beat. Klaus kleinfeld, we appreciate it. Catch more of jim keeping the conversation going on alcoas results with clauseklaus tonight on mad money at 6 00 p. M. Thanks to everybody, tim seymour, thank you. Catch tim coming up on fast money. Theyll be talking to the ceo of the big pharma giant that just agreed to a more than 5 billion takeout. And ahead, its been a bumpy ride for stocks. Jeremy siegel says we can hit dow 20,000. And congressman Chris Van Hollen wants to give the middle class a giant tax cut and do it on raises taxes on a lot of people who may be watching. Hell make the case coming up on the closing bell. Youre watching cnbc, first in business worldwide. I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Welcome back. He was the market watcher who correctly predicted dow 18,000 last year. Now Jeremy Siegel says we could see dow 20,000 in 2015 but it will be a bumpy time. He joins us in a cnbc exclusive. Professor, welcome back. I should apologize for suggesting dow 18,000 was unrealistic last year. Look, we got there. What do you think though about the way we started trading this year and how does that portend for getting to 20,000 by the end of 2015 . Well remember last january was a bad january, and everyone was talking about as january goes so does the year but that didnt prove to be the effect. Weve had some bumps here at the beginning of this year but look today. We had a big decline, 4 5 in oil. Remember that happened last monday. We shaved 330 points off the dow. So i was actually surprised how well the market held off with such a good with such a plunge in oil. And, remember, you know, everyone asks about is the oil decline good or bad . For the s p 500 oil is much more concentrated than for the economy because of all the Oil Companies holding reserves and International Operations and the suppliers, the equipment for Oil Exploration are all in the index. As an economy, we know were ina net importer so we know we gain as an entire economy when oil prices go down. Its just those effects are longer to show up than the negative effects on the earnings of the energy sector. Okay. Cardiff . I largely gre lyagree with those points. If you view one of the channels through Monetary Policy works as pulling forward in times gains in risky assets in order to get a premature wealth effect you can see now essentially the real economy seems to be catching up which both validates the gains in the assets but at the same time makes it harder to know what happens next. Thats one of the big themes of the year is essentially the real economy is catching up to wall street. Thats been a theme weve heard a lot. People saying this is the year to buy main street not wall street. How do you think the stock market can keep climbing if the handoff cardiff is talking about takes place. Theres another factor. The strong dollar is a headwind for both the u. S. Economy and the stock market. Almost 40 of the revenues of S P Companies come from abroad. Those revenues will translate into less dollars, so, you know were going to get cheaper imported goods which is ultimately good for the consumer, but theres going to be headwinds in terms of selling abroad, in terms of translating, and thats why i said its a bumpy ride but i think once we adjust to the Lower Oil Prices we may see the fed on hold much longer as a result of the disinflation and low inflation we will experience. Mary . Professor, youre talking about dow 20,000 but what about the small cap stocks. If you have a scenario where we have continued low Energy Prices, low Interest Rates, the russell has lagged the larger indices. Why not put your money at work there . Wouldnt that be a better reflection of a positive on main street and would you agree with that, theres an argument for that right now . Im sorry, professor siegel did you hear my question . I cant hear. We seem to be having problems. Well try to fix that. Lets switch down to washington. Do we want to do that . Well do that in just a moment. We will be going to washington to our eamon javers right here. Im sorry, everybody, with some breaking news. Whats going on eamon . Hi kelly. Thats right. Nbc news capitol hill producer alexm oe is reporting paul ryan who ran for Vice President back in 2012 is saying he is not going to be a candidate for president in 2016. Paul ryan telling this to nbc news in a phone interview saying it is amazing the amount of encouragement ive gotten from people, from friends and supporters, but i feel like im in a position to make a big difference where i am, and i want to do that paul ryan said. Now, where is he and what is this big difference hes talking about . Well, paul ryan is expected or is the incoming chairman of the house ways and means committee, the tax writing committee. This decision by paul ryan so early on in the cycle likely to fuel speculation that he wants to get deeply involved in tax reform which is one of those issue areas where we thought we might be able to see some progress between democrats and republicans this year as republicans take over up on capitol hill. But the news here kelly s that paul ryan is saying he is not going to be running for president in 2016. All right. Eamon, thank you very much. That 2016 race certainly heating up. I believe we have the professor back with us. Do you want to make an early prognosis on 2016 . Romney, is he going to pull it off . I mean this is going to be a fascinating election coming up. I dont have any favorite that i think is going to pull away here, and i think were just going to have to wait and see. Just throwing it out there. Also wanted to ask you about this representative Chris Van Hollen will be joining us shortly and he has a plan for cutting tacks for the middle class in part by taxing Financial Transactions. What kind of impact will it have on the stock market . Oh thats a terrible idea. The europeans wanted to do that for an exchange in tax. Liquidity is one of the greatest features of markets, and if youre going to tax transactions, you are going to lower liquidity and every model i noloer liquidity means lower price, more costly capital raising. That idea has been floated a lot of times, but we economists who study it think its a very very bad idea not only for the capital markets, but also for the entire economy. Well pretty clear on that one, professor. So did want to ask you about it. Jeremy siegel thank you for joining us this afternoon. Thank you. Very much appreciate it. Talking about the path to dow 20,000 in 2015. And we have weve hit the breaking news on washington. You can see there paul ryan says hes not running for president in 2016. I wonder if that 2012 ticket may show up again. In any case is merck speeding up plans to submit new and potentially luck ra tiff lung cancer and hepatitis c drugs. Ken frazier has answers in a first on cnbc interview you cant afford to miss. And top leaders gathering in paris for an antiterror rally. President obama or any top u. S. Official nowhere to be found however. And the white house now admitting that was a mistake. Well get you the details straight ahead. Hey what are you doing . I was thinking about taking this speed test from comcast business. Oh yeah . If they cant give us faster internet or save us money, theyll give us 150 bucks. Sounds like a win win. Guys faster internet . I have never been on the internet and i am doing pretty well. Does he even work here . Dont listen to the naysayer. Take the comcast business speed test. Get faster speeds or more savings, or well give you 150. Comcast business. Built for business. All day cnbc has been live at the Jpmorgan Health care conference in San Francisco. Its the Biggest Health care event of the year and its where some of the top names are meeting and changing ideas. And meg terrell is out there and joins us with a special guest. Merck ceo ken frazier and a first on cnbc interview. Meg, take it away. Joining us is the ceo of merck, ken frazier. Thank you for joining us. Thanks for having me. Weve seen really big deal news. You guys did two really interesting deals in 2014. You bought a company for hepatitis c and a company for antibiotics. Tell us about that strategy not doing the big ones doing the specialized areas. Are you going to do more of that in 2015 . Absolutely. Both of those deals are important because theyre in areas that we want to focus on because we believe we have the opportunity to lead in hepatitis c and also in antimicrobial resistance. Merck has had a long history in infectious diseases. We intend to come forward with important medicines. Lets talk about the cubist deal. The last time we spoke you had just done it. Hours late theyre surprising news about the patent for the biggest drug in that deal. Tell us whether that changes the strategy with that deal. It doesnt change it at all. It was one of the many scenarios we thought about when we decided to do the deal. It wasnt even the worst Case Scenario regarding the patent issue and were confident in moving forward the deal will create value for us. Were very excited about the new drug that just got approved the other day for a gram negative infection. Do you fefl like through the courts you can extend that patent life. Is there an opportunity to do that . Youre a lawyer. Well appeal the trial courts decision and in due court well find out what the court of appeals thinks. Kelly, do you have a question . I do. Thank you. I want to ask you about something that came up recently for some comments kyle bass reportedly made at a conference. Hes a Big Hedge Fund guy. He said hed been spending six months working on the pharma face and potentially coming after you guys on pricing. What can you tell us about pricing for some of the new drugs and existing drugs on the market and whether you think youll ultly be able to fend off incompetent creased activism in your board rooms in perhaps the months ahead . Well with respect to pricing, i think the key is whether or not youre coming to market with a transformational drug that makes a huge difference to patients. In many of the areas that were researching, for example in cancer, with our hepatitis c doublet which we announced today we intend to file in the first half of the year these are areas where there really arent good options for patients. So in those areas, i think we can continue to move forward and show that these drugs have the value that is represented by the price. Id also say merck has always had good relationships with managed care providers. As it relates to the activist question, my personal view is that the best way for us to continue to deal with those kinds of issues is to continue to create value over the long term but not neglect to create the value in the short term. So the way to deal with that is to continue to be active as a Management Team and we try to do that by reducing our costs and investing in focused areas where we believe we have an opportunity to grow our business. And it sounds ken, like the research and development of the last couple years has helped you guys get over the worst of the patent clip that a lot of investors were earlier worried about, but what about some of the new things coming to market that youve been working on . What happens if your lung cancer drug for example isnt the first one out there . Well, i think theres a lot of room in this area for companies to succeed. This is an important area in cancer. Immu know therapy for cancer a brand new community. Weve shown our drug is effective in early data in seven tumor types. Were studying now 30 tumor types. I think this is a big area of unmet medical need and i think theres room for a lot of participants. Todays news that Bristol Mayers study was stopped i think is unquestionably good news for them. Unquestionably good news for the class and particularly its good news for patients. So much news in that kind of cancer drug. It was exciting to see bristolmyers and exciting to see your announcement. Theres so much competition and weve been hear being drug pricing. As youre entering hepatitis c, do you have to compete on price . I think drugs compete largely on the attributes of the drug. In other words, what does the data say . How easily are they used by patients . Its not just a price game. I think if the drugs are comparable, then you compete more on price than if the drugs have unique attributes and these drug that is were bringing to the market are hepatitis c doublet as well as our cancer drug we believe have special ap tributes. We look at Something Like the gilead drug and that has high cure rates. One pill once a day. We believe we have a competitive regimen along those lines in terms of once daily oral drug that can be used against broad populations of patients and an easy way to take that pill. We think well be very competitive on the merits. Ken frazier, thank you so much for joining us. Thank you for having me again, meg, and thank you. Back to you. Our thanks to you as well meg, its been a busy day for you. We appreciate all the interviews. We have much more coming up from the health care world. Johnson johnsons ceo coming up. And more big names continuing tomorrow with valiant pharmaceuticals ceo mark pearson. Hell be on the halftime report. Straight ahead here middle class tax cut paid for by the socalled wealthy. Maryland democratic congressman Chris Van Hollen unveiling the plan earlier today and hell provide all the details just ahead. And here is one reason to actually root for higher oil prices. By 7,000 worth of more Gallery Furniture and if the price of oil is 85 a barrel or higher at close of trading december 31st, 2015 your furniture is free free free. Coming up the man behind that huge promotion tells us whether these kinds of wild promotions really work and how far he potentially stands to lose if we dont get to 85 by year end. Stay tuned. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Toothbrush. Sweater. Extra sweater. Headphones, sleeping mask. Oh, and this is the xfinity tv app. He can watch his dvrd shows from where ever he wants. Hey. Have fun, make some friends. Alright. Did i mention his neck pillow . sniffs pillow watch your personal dvr library where ever you go. With the x1 entertainment operating system. A prominent democrat member of congress in the spotlight today asking for wall street and high earners to pay for a huge middle class tax cut. Joining me first on cnbc congressman Chris Van Hollen of maryland. Great to have you with us. We were all pretty shocked to see this proposal actually, and we just spoke with professor Jeremy Siegel about the fact that this would tax Financial Transactions which he thought was a terrible idea. Is there a way to do a middle class tax cut that doesnt include some of the provisions you outlined. Its interesting, theres nothing shock being it. Im sure middle class families will see this as a big benefit in addressing what weve seen as middle class squeeze. Stagnant wages for middle class families for decades now. In fact, what were proposing in terms of the high roller fee which is a Financial Market trading fee tracks with what the European Union is looking at and by the way, is onefifth the size of the transaction fee in the uk right now on stock transactions. So id be really interested in hearing and sitting down with somebody who is complaining about this if you look at a lot of these funds. Theyre charging investors a much, much bigger fee than this tiny little fee were talking about which also has the positive policy impact of curbing excessive speculation and dealing with the sort of skimming were seeing from the high speed computerized trading which is skimming value away from investors. So i wish folks on wall street would focus a little more on the fact that investors are being skimmed by high speed traders than worrying about a fee that will help actually provide the middle class families with some tax relief. Listen i understand your point, but, again, im wondering how Congress Works especially now its a gop majority. Is there a way to for example, if youre concerned about the speculative trading activity on wall street as you call it separate that from what youre suggesting here for a middle class tax cut. Theres interesting things about how you want to incentivize employers to raise wages, for example. Talk a little bit about that and whether youre worried that at all would mean if theyre paying more or invent sized to do so theyd have fewer workers . Right. So this plan has two aspects. Its trying to use the tax code to incentivize corporations to pay their employees a little more. My goodness we use the tax code to provide tax preferences to racehorses and corporate jets. Surely we can find a way to try to incentivize corporations to raise the wages of their employees and we have a provision in there that essentially says no you dont get to take a Tax Deduction for bonuses or compensation over 1 million unless youre giving your employees a raise that reflects worker productivity and cost of living right . Now, a corporation can give a ceo a bonus of 1 billion if it wants, but if it wants the Tax Deduction, then it cant be, you know, taking bonuses above 1 million and deducting them. So this says look if youre going to take those deductionseductions, because youre getting performance pay over 1 million, lets make sure your employees benefit a little bit from the performance of the corporation. I would hope actually we could come together on some of these things. Theres some mixed messages in here because you also want to create a savers bonus, 250 for workers who put at least 500 a year into retirement. Some of the initial feedback to what youre talking about as a financial transaction tax says is this going to tax peoples retirement accounts . Actually, this is a huge bonus and plus for savers. Because if you put away 500 you will get a savers bonus of 250. That is much larger than the infinitesimal fee that the normal person with a normal savings account would be nicked as a result of the Financial Market trading fee. So for example, john vogel, the founder of vanguard. Sure we know him well. He supports a financial Trading Market fee because he agrees that theres way too much speculative churning in the market that isnt doing anything for regular investors. So hes in favor of this kind of idea on policy grounds. What were saying is lets do this on policy grounds. Lets not allow those computerized high speed traders to skim value, and rather lets provide a savers bonus to incentivize more people to take advantage of taxfree savings accounts. Thats the way to go. The final plank of this is it goes after the top 1 of earn correct . With regard to mortgage interest deductions Capital Gains tax treatment. The Capital Gains tax rate has already gone up. This would be an additional increase and what else would be involved for the 1 as you put it . What we point out is what the Nonpartisan Congressional Budget Office has pointed out. If you look at all the tax expenditures, the values of tax at theduction deductions and tax exemptions. Today 17 of the dollar value of that goes to the top 1 of income earners. Thats 150 billion in tax expenditures each year going to the top 1 . So lets have a conversation. I think everybody would agree that 1 getting 17 of the deductions is a disproportionate share. So lets figure out how we can deal about that. Finally, congressman, do you support raising the gas tax . I support the proposal i put forward on the house floor which was to end make the changes we proposed to end these corporate inversions and we would have raised enough funds by preventing american corporations from changing their addresses overseas to avoid their tax responsibility here in the United States, we would have raised enough to fund the Transportation Fund for the next two years. Do you still im happy to work with my colleagues. If my colleagues want to come around to discuss the gas tax, im very open to that idea. If thats put forward, put on the table for congress you will support it . No im happy to engage in that conversation. I think the proposal the president has put forward and weve put forward which is to deal with some of this by ending tax breaks that actually encourage corporations to go overseas, invest those savings here at home thats a good way but im very happy to that conversation on the gas tax. Congressman, thank you for being here this afternoon. Again with the big proposal that would do a lot to change some of the current provisions that were talking about here, especially for high earners and might change incentives as well for your ceo. Millions of people visiting amazon every day to buy among other things birthday presents and today is amazon chief jeff bezos 51st birthday. He probably doesnt need too many presents. We have a story on cnbc. Com right now about how he made 1. 5 million a day since the day he was born based on his current wealth. Well see if all that money can buy his way to the hud list. And should president obama or someone high profile have attended the paris rally yesterday . Much more on that. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back. When does oil get so low its unprofitable . Allen is here to tell us. Kelly, we got a wrap up of a woods mckenzie study that looked at over 2,000 oil fields to see where the price point is you start losing money pulling it out of the ground. All sorts of stuff, u. S. And canadian tar sands are the biggies there, but people are just loving that story. Number two, we had the billionaire investor on squawk on the street earlier. Two stocks he loves, tesla and manchester u and then number three, whenever i put the word trump in a headline, people click on it. Donald trump suing Palm Beach County because he believes theyre routing airplanes over his club. He doesnt like it. He wants 100 million. Those are my big ones for you. You always deliver. Great to see you. Allen wastler back at headquarters. Up next the white house admitting it was a mistake not to send anyone of note to france, when we come back. Welcome back. 3. 7 Million People rallying against temperature in france. White house secretary of state admitting the mistake of not sending someone from the white house. I think its fair to say that we should have sent someone with a higher profile. Joining us now is the Vice President of the Woodrow Wilson center. Its great to have you here. You spend a lot of time thinking about the theater as obama as called this in the past of doing this of showing up of being a statesman. Do you find any real excuse or explanation for the u. S. Not having a high level official there . I helped advice republican and democrat secretaries of state on middle east toings and froings and whether they should go here or there. I really did try and divine any conceivable explanation. If they didnt want to send the president , understandable. Tough to pull together. I understand the secret service wasnt even asked to consider the possibility of whether or not they could do a trip. Someone decided almost immediately the president would not go. Fair enough . Then the question was why not the Vice President , mrs. Obama, a bipartisan delegation from congress. Even bill clinton, who does extremely well at these events. Its a kind of tonedeafness in response to a rare moment in the life of a nation. I mean more people in the streets of france than any time since the Second World War . Right. In response to a terror attack attack . John kerry might have been the appropriate person to go initially. Very few things are fatal in politics and this is clearly not one of them. But a missed opportunity. And its simply going to reinforce the fact that this president doesnt seem to enjoy being a character in chief. And thats frankly what most of our great president s really were. They understood that the world was a stage. And they essentially had to play a role. Unfortunately that didnt happen this time. Mr. Miller i have a question for you. Understandably the u. S. This was a significant gaffe by the u. S. Is there any benefit, though to not having someone from the u. S. Steal the spotlight and instead you see a group of world leaders, mr. Netanyahu and mr. Abass all linked together . Is there any drive for that given that the spotlight was not on the u. S. It so often takes the spotlight. Its a rationalization that could be used to say that the International Community own this is. Its not an effort by the United States to essentially create a moment or orchestrate. I take all that. But i also know if you look at that photo you had abass at one end of the line and netanyahu at the other. Yes. Its very hard to imagine given challenges that we face from jihadi radicalism. We have to leave it there. But really appreciate your perspective. Always a pleasure. Up next we are going to speak to the owner of a Furniture Store in texas whos potentially giving away the store if oil rallies back to 85 bucks when we come back. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Consumers wouldnt likely cheer an end to cheap oil prices. But if youre in the market for some furniture, here is how one owner is enticing customers and anyone in the u. S. Can take advantage. The price of oil is 85 a barrel or higher at close of trading december 1st, 2015 your furniture is free free free. Thats right. If crude finishes the year above 85 bucks, your furniture is free. Welcome to the show. Glad to be here. Just call me mack is fine. All right, mack. Youve done a couple of promotions like these before. And youve lost a lot of money. How much is on the line for you guys as a business do you think . Well probably at the end of the day it will be between 10 and 20 Million Dollar on this promotion. Last year we did the promotion and that cost us 12. 5 million, but we made a lot of customers happy. Hopefully the same thing will happen in this oil promotion. How did you decide on 5 85s a barrel . I woke up and said 585. So the number was 85. This is like a corrector to the extent that oil prices are a corrective measure. This is a way of helping out. Mack how many people have taken you up on this . So far, kelleyykelly, about a hundred. Wow. We had a tremendous last three days of business because of this promotion. Well hope to get hundreds more. The whole idea is to make customers happy. Its a great way to become topical. People talk about this all over town. Thats it for us on closing bell bell. This is fast money. Lots of big news in the bio tech space today. We are taking you to the jp morgan Health Care Conference with the ceo of johnson and johnson. Its not just crude thats shaking